"All marketing should perform," Kenyatte Nelson, chief brand officer of Manchester-based online fashion retailer N Brown, says. "This idea around ‘performance marketing versus brand’ is bullshit. It’s nonsense. If you’re investing money in marketing, it should work. The only question is: ‘When?’"
Nelson was speaking at ITV’s recent, annual showcase for advertisers and agencies in Manchester as he explained how his old employer Missguided, another fashion ecommerce player from the north-west, saw both short-term and long-term benefits from its commercial partnership on ITV2’s Love Island last year.
N Brown, Missguided, Boohoo, AO.com, Moneysupermarket, On The Beach and I Saw It First are among the many "new economy" brands that are headquartered in and around Greater Manchester – along with some global giants such as Booking.com, which employs 1,500 people in the city, and Amazon, which is opening an office for 600 staff later this year.
These homegrown disruptor companies are often experts in digital performance marketing but have hit a growth "ceiling" after optimising their campaigns through paid search and social channels. Now they are investing in mass media, chiefly TV and outdoor, to build fame, consideration and stature and to drive expansion.
Paul Cooper, chief operating officer of MediaCom North, whose clients have included Missguided and AO.com, says: "‘New economy’ brands have been a key part of our growth as they have expanded."
The rise of the digital economy is not just a local phenomenon. ITV told shareholders that online brands increased their adspend with the broadcaster by 10% nationally last year, bucking the decline in expenditure by "legacy" advertisers.
Greater Manchester, in particular, has emerged as an important hub for media, digital and ecommerce companies in the past six or seven years as the region has established itself as a more affordable centre of creative excellence to rival London.
Investment by the BBC and ITV in MediaCityUK in Salford, where Coronation Street is filmed, is attracting other media businesses.
TalkTalk completed the move of its corporate headquarters from London to Salford in July and WPP has announced plans to open a campus on the site of the former Granada Studios by 2022.
Cranes dominate the skyline and Jon Kershaw, managing director of PHD Manchester, says: "Everywhere you look, the fabric of the city is changing and the media industry is reflective of that."
Kershaw, who grew up in Grimsby, says Manchester has always had a "Liam Gallagher swagger" – a reference to the Oasis singer – but he detects a renewed confidence and more worldly outlook in recent years.
The number of people working in the creative industries in the north-west of England jumped 26.5% between 2011 and 2018 to 158,000, including 15,000 in advertising and marketing, according to the Department for Digital, Culture, Media and Sport.
The jobs growth was three times faster than the wider economy in the north-west. What’s more, the region has closed the gap on London in terms of the rate of new job creation in the creative sector (see below).
"New economy" businesses are powering much of this growth and need to invest in their brand because, as Nelson warns, they are competing in "a sea of sameness" and need to avoid a "race to the bottom".
That was the rationale for Missguided’s Love Island partnership because "human beings make sense of the world through stories" and "TV’s ability to tell really compelling, really engaging stories is what makes it unique as a channel", Nelson says.
Crucially, the Manchester fashion brand was able to fuse media and commerce as viewers could buy outfits from that night’s show via the official Love Island app – an important way to drive both short-term customer acquisition as well as long-term brand and sales metrics.
Ecommerce businesses, particularly fast fashion, are thriving because it’s in the city’s DNA, according to Jessica Scott, co-founder of Love Sugar Science, a media agency that launched in Manchester in March with backing from Goodstuff Communications in London.
"‘The north’ has always done retail well and the agency market has grown up around it to support those sorts of [ecommerce] businesses – with particular capability in digital that can deliver a rapid return," Scott says.
Part of the rationale for setting up Love Sugar Science and taking a broader, strategic approach to media was a belief that some brands have become "hooked on performance marketing" and neglected brand-building, she says. Significantly, one of Love Sugar Science’s first clients has been I Saw It First, another local ecommerce player, which took over from Missguided as fashion sponsor of this year’s series of Love Island.
Two of the big global agency groups, WPP and Dentsu Aegis Network, dominate the Manchester media-buying market and employ more than 500 staff each. Of the other four global buying giants, Omnicom, Interpublic and Havas have only a limited media presence in Manchester and Publicis Groupe has none.
There is also a shortage of creative agencies. Interpublic’s McCann is the only international creative network that operates at scale in the region – chiefly to serve its top client, Aldi – and employs about 600 people.
The lack of sizeable traditional, creative agencies has meant production companies are filling the gap, especially as brands are demanding more fast-turnaround, digital content.
Scott says: "Producers like The Gate Films, Standby Productions, The Chase and Chief Productions have great heritage in being able to create films with a little planning direction to turn out a quality product at the sort of pace that would make more traditional agencies wince [because they would struggle to keep up]."
She also cites Social Chain as a leading social marketing agency that is fusing media and creative capabilities aand "putting a completely new spin on how fast you can take ideas to market as multi-faceted content experiences".
Some of the established agency networks are waking up to the opportunity.
Omnicom’s PHD Manchester and TBWA\MCR moved into the same building last year. The agencies do not share clients yet but co-location should attract shared business.
WPP’s plan to bring together its five Manchester agencies – MediaCom, Wavemaker, Kinetic, Cheetham Bell and Code Computerlove – under one roof is another move that is being driven partly by the desire for greater integration.
The new WPP base will have room for 800 people – 50% more than WPP’s current headcount of about 520 in Manchester and a sign of ambition.
There will also be space for start-ups. Karen Blackett, UK country manager of WPP, wants it to be a "skunkworks" that attracts entrepreneurs – some of whom might become future clients.
Blackett says there are many reasons to invest in Manchester: the ad industry needs to get out of the London bubble to improve diversity, agencies should be closer to clients and it’s easier to buy a home than in the south-east.
"For me, this is part of making sure that as an agency you understand the fruit salad that is modern Britain and that can’t have a London-centric lens on it," she says.
Jason Spencer, business development director of ITV, who leads all of its regional sales offices outside London, says competition for senior jobs means salaries in Manchester are now close to those in the capital.
Spencer moved to Manchester in 2006 and encourages advertising folk to consider a career outside London: "There are probably faster growth opportunities for your career, you can get on the housing ladder for less and have a better quality of life."
Blackett says: "If I was in my twenties, I would definitely do a stint in Manchester. It’s just as vibrant, it’s got just as much cultural influence and it’s a fun city. The work is just as good; the creativity is there."
Physical proximity to clients is becoming more important as a growing number of brands are managing some of their digital marketing in-house – particularly online brands that have never known anything different.
Founder-led businesses also like to keep close control of ad expenditure and are often still relative novices when it comes to developing a "well-rounded" media strategy, according to one agency executive, who has first-hand experience of managing such clients.
Scott says Manchester agencies have no reason to target only locally based brands. Love Sugar Science recently won Echo Pharmacy, a London start-up that offers repeat online prescriptions for patients. "We’re not just going after Manchester clients," she says. "We hope a lot of our clients will come from all round the country."
John Triner, managing partner of client services at TBWA\MCR, is more forthright: "Don’t judge us as the north-west. Judge us on a level playing field. If our football teams compete on a level playing field [with other clubs around the country], why shouldn’t our agencies?"
Triner contrasts the UK with America where he says an agency from Austin, Texas will be "treated equally" with one from New York because there is a belief that creative talent is spread across the country and not concentrated in one city.
Plenty of London agencies "want to drag our talent south", which underscores Manchester’s creative credentials, Triner adds.
"We would like to be feared and respected by our London colleagues the same way as we fear and respect them the other way round," he says.
Manchester’s advertising sector is growing in stature. PHD Manchester has taken on international work including VF Corporation, the owner of Timberland and North Face, after the network won the EMEA account last August.
"We don’t think of ourselves as a Manchester agency," Kershaw says. "We’re a national and international media agency that happens to be based in Manchester."
That’s why PHD North rebranded as PHD Manchester. "If you call it ‘North’, your existence is defined by your relationship to London," he says.
The & Partnership is also opening a Manchester operation as it is following its client TalkTalk northwards and the London-based network hopes to win other work in the city.
The sense that advertising money is unevenly distributed across the UK comes up repeatedly during conversation in Manchester because London agencies control close to 85% of media agency spend, even though 80% of the population is not in London. Manchester agencies manage about half of the rest of the media money that currently sits outside the capital.
The challenge is to win a greater share of the UK advertising pie, which is forecast to hit £24bn this year, according to the Advertising Association. On that basis, if Manchester increased its share from, say, 8% to 12%, it could mean an extra £1bn in annual revenue – "a reasonable ambition", according to one industry source.
Kershaw believes Manchester is up for the fight. "Mancs genuinely believe they can change the world and they don’t need London," he says.
Photography: Julian Dodd and courtesy of TalkTalk, MediaCityUK, Dock10, MediaCom
Creative jobs boom
The north-west of England has closed the gap on London and edged ahead when it comes to the rate of job creation in the creative industries.
Department for Digital, Culture, Media and Sport figures show employment in the creative sector across the region, which includes Greater Manchester, increased 7% to 158,000 last year, compared with a 6% rise to 695,000 in London.
Advertising and marketing (up 14%), design and fashion (up 18%) and TV and film (up 20%) were among the strongest sectors in the north-west.
It was the second year in a row that the rate of jobs growth in the region’s creative sector was faster than in London – after a period between 2011 and 2016 when the north-west barely added any such jobs.
The capital remains a much larger hub. The creative industries’ workforce in London expanded by 39.8% or 198,000 jobs between 2011 and 2018 compared with only 26.5% or 33,000 jobs in the north-west.
However, Manchester is gaining momentum. Deloitte’s annual Manchester crane study, which tracks real estate in the city, reported earlier this year that the creative, media and tech sector has overtaken financial and legal services as the largest new occupier of office space.
The number of property schemes, including residential, under development jumped 34% in 2018 compared with a year earlier.
"There are currently more cranes across the skyline than in any US city," Andy Burnham, mayor of Greater Manchester, told Management Today, a sister title of Campaign, in June.
The city centre, Salford and St John’s are the areas of greatest expansion, with growing demand for "quirky fit-outs" and "breakout spaces to improve collaborative working", according to Deloitte.
Burnham has also launched the region’s first strategy for culture and creativity – a five-year plan to improve "the conditions" for "creativity to flourish" by 2024.
He has pressed national government for greater investment in transport and warned that its "Northern powerhouse" initiative is at risk of fizzling out. New prime minister Boris Johnson has promised a new rail link between Manchester and Leeds – the city that Channel 4 has picked for its new national headquarters.
Despite such concerns, Manchester was recently named the best British city to do business outside London, after topping a Management Today ranking of 21 towns and cities.