Digital Agency Census: northern English firms explain how to weather economic trouble
With several agencies in the north of England ranking high in this year’s Digital Agency Census, we took the temperature of agency leaders in the region about their business prospects.
Northern English cities such as Manchester and Leeds have long hosted thriving agency scenes. But Covid wrought economic chaos on the north, with the regional economy hit harder than the rest of the UK, according to the University of Manchester, while the UK government’s promises to increase capital investment and transport infrastructure in the region withered on the vine.
Leeds agency Journey Further ranked highly in this year’s Digital Agency Census
As they face harsh trading conditions, how confident are northern agency leaders about their business prospects?
Content marketing and digital design outfit Think Design, based in Bury, Greater Manchester, has experienced a rollercoaster ride over the last two years, according to co-founder and creative director Paul Grogan.
“In terms of lost work, over the following six to nine months, was in the region of £60,000-70,000. At that point, we were only taking in just £300,000, so as you can imagine that was a bit of an ’oh shit’ moment. April’s billing was our worst ever.
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“But then we went really busy. Since the end of April 2020 onwards, we’ve started to be flat out. And we have been since.“
Ranked second in the UK in the Digital Agency Census client poll, Think has, since the beginning of the pandemic, doubled its staff headcount and revenue while expanding its range of services and diversifying its client roster.
“Now we’ve got a department that services eight to 10 clients on content marketing strategies, enabling businesses recovering from Covid to bring themselves to market,“ says Grogan.
Ranked third in the UK by its agency peers, Sheffield-based Rise at Seven has made a virtue of its distance from the capital, says founder Stephen Kenwright. He says: “We’ve grown very quickly and I don’t think that would have been possible if we’d have been a London agency.“
The Yorkshire city boasts two universities, but relatively few agencies – a factor that has helped Rise recruit new talent even as the hiring market rose in temperature last year. “We’ve been able to pick up quite a lot of graduates and quite a lot of people who would have otherwise commuted out of Sheffield to Leeds or Manchester or Nottingham. We’ve not had a lot of competition for staff.“
That’s not to say it’s all been rosy. Rise at Seven’s customers have been hit by export restrictions relating to Brexit, while one client, homewares brand Cath Kidston, went into administration in the first month of the pandemic. But like Think, Rise at Seven has benefited from the upturn in marketing activity, and this year it’s set to bring in £7m in revenue. The agency was only founded three years ago.
Meanwhile, in B2B land, Stein IAS, ranked ninth for award wins in the Digital Agency Census among giant industry names, keeps its British base in the Cheshire town of Bollington (it’s part of the international MSQ network).
According to Craig Duxbury, global chief client officer, the agency brushed off Covid woes to enjoy its best year in business. It’s seen “more confidence“ from both new and existing clients, he says. “Specializing in something, rather than fishing in the same ponds as a lot of others, gives us a differentiated offering.“
“The digitization of brands in the B2B space has accelerated the need for [agencies].“ Lockdown meant B2B clients had to “innovate and accelerate“ their digital sales insfrastructure – a trend that “played right into our hands.“
Agencies in the north always had access to the national and international economy (many blue-chip companies have offices in either Manchester or Leeds). But Grogan says Think has managed to access larger, nationwide advertisers more successfully in the last three years, after starting out as an agency catering to startups in Bury and the Greater Manchester area.
“A lot of clients have been affected, but not us – we’ve just picked up more work,“ he explains. “We’ve become much more UK-wide and haven’t been affected by local economic nuances and fluctuations. We are quite well insulated.“
It’s a similar story for Leeds-based Journey Further. Almost 70% of its clients are based outside the north, says chief executive Robin Skidmore. “Although wider economical factors have impacted the north, it’s impacted the whole world, so I don’t see northern businesses specifically taking a hit,“ Skidmore says.
“The pandemic has changed ways of working to our advantage – we’re actually able to better access client and talent pools across the country as remote working has been normalized. We’ve had flexible working since day one, but now we can build relationships virtually as we adjust to the new norm. As a northern business, we’ve doubled our headcount and revenue in the last 18 months and we’re set to open our US office soon, and I’m proud that a northern-based business is growing faster than most businesses in the UK.“
At Stein IAS, Duxbury notes that staff at its northern base service clients across the world. But its clientele in the specialist engineering and manufacturing sectors, still a major employer in the north west, has also cushioned it from local fluctuations.
“We’ve got good clients in manufacturing [and] public sectors, we will still have a rich in heritage in aerospace engineering. We’ve got some long-established clients, we’ve just won two new global ones.“
Grogan is blunt about prospects of outside help for the region: “The Northern Powerhouse was a myth, wasn’t it? Let’s be honest. It was hyperbole. And Brexit and Covid were brutal. We’ve not suffered,“ he says, but “a lot of people I speak to in the sector know agencies that are very quiet. Some have gone to the wall completely.“
Instead, he sees agencies in the region as masters of their own fates. “It is a very, very difficult trading environment. But the biggest thing that has impacted us is cost. We’re trying to increase our prices because of the level of service and the quality of work we’re delivering, while our overheads are going up. We’re still selling a lower day rate than most city-center agencies – but those rates are still lower than they were 10 years ago. We’re not going to cheapen what we do.“
For Kenwright, the period has proved it’s possible to compete with agencies in London without a capital postcode. “An agency’s fortunes are tied more to where staff are than where clients are,“ he concludes. “The north is where people are.“