How 2 UK agencies are preparing to enter the lucrative US market
The US is a vast, attractive market for British agencies, but establishing a foothold isn’t easy. Two agencies on the cusp of their US debuts share their plans for empire-building.
Design agency Thirst is planning a US push / Thirst
With bigger clients, bigger audiences and – to some degree – a common language, the US has long been a preferred expansion target for British agency businesses. British agencies must be grounded in their goals and tread carefully when expanding.
Glaswegian branding and design company Thirst is planning to extend its business across the Atlantic this year as the next step in its owners' masterplan. The agency specializes in serving the beverage market, especially beers; its clients include Brooklyn Brewery, Brewgooder and Innis & Gunn.
The US is the ”pinnacle” of the beer world, claims co-founder Chris Black. ”We’ve always had an outward eye, wanted to progress ourselves outside Scotland and the UK ... it’s where the best brands are.”
Thirst’s co-founders Black and Matt Burns have benefitted from the ”tight-knit” agency community of Scotland’s biggest city; the agency increased its revenues 53% between 2020 and 2021. But expanding to the US is a long-term ambition of the pair, and is a key part of plans to hit the £5m turnover mark within the next three years.
Meanwhile, Mancunian sports and gaming agency Ear to The Ground is in the midst of a similar move. Founder Richard Adelsberg says it’s ”all systems go” on the agency’s scheme to become a ”fully Anglo-American business” by the end of next year.
He wants to be seen ”not just as a UK business trying it out in the US,” but ”to have established a good foothold and have a great position in the US market.”
Time to move
There’s opportunity aplenty across the pond, but there are difficulties facing small agencies hoping to expand into the US. Thirst is working with CPG investor Adam Spriggs to ease the transition. He’ll offer contacts, experience in the market and capital in exchange for a stake in the business.
Black recalls how the arrangement began: ”We started working with Adam [Spriggs] on a brand, Loverboy, and then on a second brand, Buzzkill [a canned wine brand]. We went over to meet Adam to spend some time with him, and [found] our ethos on how to build an agency matched, and then also seeing how his skills and network and experience complemented me and Matt’s ... it started to become a really exciting option.”
Spriggs tells The Drum: “We speak the same language. Independent of differences between geography, time zones, country, culture and product categories, we’re all focused on trying to understand how and why shoppers buy, and how to win attention in a world overwhelmed with clutter and stimuli.
“Thirst’s deep and expansive knowledge of the food and beverage industry travels well. It creates a baseline for applying a curiosity that’s customized and dialed into each unique client and project circumstance.”
In contrast, Ear to the Ground’s American move is motivated by demand from global clients it previously worked with within the UK. ”We work with the likes of PlayStation and New Balance, but mainly from a UK perspective. We’ve managed to convert those European-based relationships into working directly with HQ in the US. It’s been a significant coup for us,” Adelsberg says.
His agency has chosen to work with a third-party ’employer of record’ company that will formally employ its new staff while a new legal entity is set up in the States.
”When you’re in those early stages, it’s more sensible to work with a third party. It will enable us to start pretty quickly in the US. But as we get to probably five to 10 employees in the US, it starts to become more efficient to actually set up your entity.”
While Thirst is still planning the particulars of its move, Ear to the Ground has already made its first senior hires in the States. But Adelsberg admits that higher labor costs are intimidating for a British company.
”You’ve got to be very comfortable with people getting paid a lot more than you,” he says. ”In terms of the size of the wages, and the experience people have got versus their salary and stuff ... it’s something you’ve just got to get quite quickly over.”
The higher fees and bigger accounts available in the US will help soften that blow, too. ”One of the key metrics that we run our business by is to make sure we’ve got our gross profit per head to a level we’re happy with as we continue to grow. Flipping that from a UK-based metric to a US one is going to be key.”
Choosing a location is another hard decision to make. While Adelsberg and his colleagues are hiring across the US, they’re also considering moving permanently out to Los Angeles to form the company’s American base.
”I’ve done quite a lot of research into businesses that have succeeded in US growth and, generally speaking, it requires a business owner or a director to move out for it to really work,” he says.
Black and Burns are spoiled for choice – its current and potential clients are distributed across the east and west coasts, and there’s a sizable brewing scene in Colorado that might prove fertile ground. On the other hand, New York and the eastern seaboard have the shortest time difference with Glasgow.
”Initially we’re looking at the east coast, maybe as far as Chicago,” says Black. ”We want that ease of travel and ease of operations to make it as workable as possible.”
The US market represents a sizable opportunity for both agencies – 40% of Thirst’s revenue already currently comes from international markets. It’s also host to many rival agencies in both drinks branding and esports. What can the British transplants bring to the game?
For Adelsberg, his agency’s research boasts a network of 11,000 fans around the world (including some 3,000-4,000 in North America). ”They give us cultural insights, but also we collaborate with them on strategy and creative.” The power of that network, he argues, will help Ear to the Ground dig in against established rivals.
Spriggs says the market is big enough for Thirst and its potential rivals. The agency has a chance to serve a growing sector, he notes. “There are unlimited opportunities to build our presence in the US. We want our work with the most promising high-growth brands in the industry to be our calling card. Their visibility and success will become our gravitational pull. We see ourselves as stakeholders in the CPG industry.”
Black says the agency plans on using the quality of its work, and the team’s experience, as a major selling point. ”We’re not going into this blind having never worked in the American market – we already have established clients and an established portfolio.”
”There are obviously lessons that need to be learned,” he says. ”We also really believe in the quality of our work and the consistency of our work, and how we can apply that to the American market.”