Discover client recommended agencies

How do you solve a problem like... entering a new agency market?

How should agencies approach expanding in new regional or national markets?

Each week, we ask agency experts for their advice on real problems facing today’s marketing practitioners. This week, as part of our Deep Dive on globalization and the marketing industry, we ask how agencies should navigate their entry into new regional markets and territories.

Every business aspires to growth, but expanding in a new market or territory is difficult. Recently, we’ve seen big names from the agency scene, such as Accenture Interactive and S4 Capital, investing in South American markets; similarly, WPP’s new campus in Milan signals its ambitions to grow in Italy.

For an agency approaching a new national or regional market, what should they be focusing on? What are the biggest obstacles facing an agency attempting to gain a foothold in a new territory?

How do you solve a problem like... entering a new agency market?

Lars Lehne, group chief executive officer, Incubeta

Going into new territories is a delicate process – the risks are high and costs significant. It’s important it’s fully backed and supported by management, clients and global partners. Both can point to the right people and organizations in the market, and even help facilitate early conversations.

It’s critical to have trustworthy people on the ground who understand the local challenges. Succeeding depends on the necessity for the business, which determines the willingness to spend and take risks. However, entering new territories makes a business more colorful and diverse, and with that we gain strength and value for our clients and partners.

Scott Harkey, president and chief executive officer, OH Partners

The field of dreams approach (‘build it and they will come’) does not work, which is why simply placing an office in a new region doesn’t work – particularly in the world of marketing and advertising, where people tend to be skeptical. Because of this I’ve found that it’s more economical to acquire agencies. The goal of new openings is all based around talent and clients, as people are what drive success. Agencies have specific areas of expertise, as their employees do. You can build upon those existing relationships and give yourself a runway to work off of.

Mark Armstrong, executive creative director APAC, Bulletproof

The biggest mistake when growing into a new market is thinking you know it all, or that what you have done in other markets will work again. Stay naïve, identify what makes you different and make that your focus.

It’s important to be clear on your values. Don’t compromise on them but understand that the way they manifest will be unique to each market. The success of our Singapore and Sydney studios is down to two things that embody our values: people and culture. This sounds obvious but is extremely challenging to get right.

As we start building our presence in Shanghai, finding the right talent – people who champion new ways of thinking and see boundaries and conventions as challenges to push against – is the number one priority. Our people are our most precious asset as a business.

Adrian Belina, founder and chief creative officer, Jam3

Land and expand. That is the best and simplest way to approach your new territory. Our entrance to a new market is rooted in project work and building up momentum, focusing on organic growth/hires. We always start with our one-two combo, a senior creative and executive producer, where one is always local to the new territory and brings their connections, and the other is a senior Jam3 leader, ensuring Jam3’s culture is translated.

When seeking new clients and future hires, we are huge believers in the naturally occurring benefits with having ’boots on the ground.’ Being available on a consistent basis with a singular focus on meeting people in their own backyard allows for additional conversations to happen in a softer and less forced way, which ultimately reduces pressure and feels less ‘salesy.’

Chris Mellish, chief executive officer, TMW Unlimited

There are no hard and fast rules to entering new markets. Challenges will exist in many shapes and sizes, and are accentuated more than ever before. But if there is one constant that can help give a framework for launching in a new market, it’s that we’re only human. If you can understand the motivations behind the individual, you can help evoke emotion and inspire action.

Keith O’Loughlin, chief executive officer, Smyle

Opening a new ‘shop’ is an exciting time in the business cycle – embracing diverse creativity, cultures and experience enriches the core enterprise at pace. To acquire or build at home or overseas, the foundation business has to be rock-solid in terms of talent, client revenue and relationships to give the ‘bandwidth’ for the new. With solid foundations, it’s advisable to follow work through existing client relationships, seek out motivated local talent and build around them; use your leadership expertise to fast-track the growth of the new business.

Andy Cocker, chief operating officer, Kepler UK & APAC

Entering a new market requires a thorough understanding of local nuances and business culture. Just because a formula works in New York or London doesn’t mean it will work effectively in Singapore.

You may be the agency de jour in one market, but unheard of in another. Therefore developing a local brand stature with regional case studies is essential in building a credible reputation. Look to acquire a great local business with the strategic and technical expertise needed in your new market. If growing organically, focus on getting the right first hire(s) in place, and have the backing of your existing clients in other markets to expand alongside you.

Jason Cobbold, chief executive officer, BMB

Geographical expansion is the dream for agency entrepreneurs. But for every successful move, there are failures due to an assumption that what makes you successful in one market will automatically work in another. It’s the step and repeat model companies love to boast about.

The business of agencies is about culture. And culture is endlessly varied and rich. Learn from what works well elsewhere, and hold on to your values, personality and eccentricity, but be prepared to adapt your proposition to local culture. Hire brilliant local talent. Most of all, be hungrier than the local startup you will be competing against.

Hunter Hindman, chief creative officer, Argonaut

In our experience, the most important thing to remember when approaching a new market is to balance the need to drum up excitement – with your people and prospective clients – with the reality of the situation. I’ve always believed that, as you enter new territory, it’s better to hold off on bold public announcements until you’ve built or achieved something that truly warrants it. Our industry isn’t famous for its quiet humility, but it’s always more gratifying to celebrate something tangible and noteworthy that reflects you at your best than to fluff up something that may or may not.

Andy Nathan, founder and chief executive officer, Fortnight Collective

In addition to Boulder, Colorado, we have a London office. We also just created a footprint in NY. For FC London, we want to give them the freedom to do what’s best for their market. They embraced our proprietary process but also have some flex on how to apply it to the European/UK market. Years ago, I worked at O&M NY on IBM, then I was transferred to O&M London (also working on IBM). I went from a global role to European, followed by a UK market role. When I was at O&M London we used to say to the global team that we are not the 51st state – our point being that you need to recognize that there are market and cultural differences. It’s not always a one-size-fits-all solution.

Want to join the conversation? Email sam.bradley@thedrum.com to join next week’s debate.

By continuing to use The Drum, I accept the use of cookies as per The Drum's privacy policy