Entrepreneurship is a big feature of the media landscape. But any launch into the world of the communications consultancy faces a big obstacle - how to achieve the scale and profitability of businesses that are more execution-driven.
One solution for some of the UK players in the independent communications sector is growth through international expansion. Last week, two companies, Ingram and Naked Communications, took on staff to drive their growth plans.
The symmetry was almost perfect: Ingram hired Simon Toaldo, the managing director of Euro RSCG London, as its first managing director, while Naked appointed Nigel Long, a non-executive adviser, as its first group chief executive.
For years the two were part of the management triumvirate behind Partners BDDH, along with its then chairman Leslie Butterfield - with whom Toaldo is now reunited at Ingram.
It seems these former creative chiefs cannot resist a new challenge, and that the place to find this is in consultancy. But, more tellingly, the hiring of both Toaldo and Long is driven by ambitious international expansion plans hatched by their companies' founders.
In Ingram's case, the company wants strong leadership for its London operation, in part to drive international client opportunities. As for Naked, its patchwork of 15 businesses in six countries - and growing - needs serious management. Its four partners have been stretched to the limit and need support.
So these are two cottage industries, albeit of different sizes, which aim to achieve scale through international growth. There is not a long history of similar businesses, as opposed to traditional ad and media agencies, making it abroad.
1. In 2001 Michaelides & Bednash launched a New York presence, hoping to take its brand of creative communications thinking to the US. However, soon after it opened, the events of 11 September changed everything. In a prevailing mood of caution, clients were less likely to try this new alternative. M&B still maintains a US presence.
2. The big boys, in the shape of WPP, tried to cut a swathe through the communications planning sector with the 2004 launch of Nylon. The vision was to provide high-level planning solutions to clients on both sides of the Atlantic (in New York and London). However, the "Ny" part of the plans never got off the ground and the partners of Nylon's "lon" operation have all since departed.
3. Naked Communications has attempted to expand through a series of international launches. It is present in six markets: London, Amsterdam, Sydney, Oslo, Paris and New York. It employs 150 people and is planning agency launches in Tokyo, Sao Paolo and Singapore. Long says: "We were brilliant at the creative amplification of creative agencies' work - such as Honda and 118 118. Now the product is evolving to become a consultancy on global clients such as Nokia."
Naked is also working in multiple markets for Coca-Cola and Unilever. Its international expansion began in 2003 with Amsterdam. It tends to favour a joint-venture model, starting new businesses with "stars" from local markets, as its launch of operations in New York, in January, and Paris, in June, demonstrate.
Naked's founding partners, and senior figures such as Long, play a key role in launches. Jon Wilkins is working hard on Naked's Asia launch and John Harlow on its New York office. Long says: "There's a willingness here for senior people to put time in - the only downside is I barely have to deal with Australia because it's so self-sufficient."
4. International work has been integral to Ingram since its launch in 2003. Its founder, Chris Ingram, believed there was room for a communications-driven brand consultancy-cum-management consultancy which is able to offer advice on a global, or at least international, level.
As well as its base in London, Ingram has offices in New York and Hong Kong. Ingram took its first steps into Asia in April with the acquisition of The Brand Company, which plans to open two more offices in China. This was after it bought the New York marketing consultancy Consumer Dynamics in 2005. Ingram's presence in New York and Asia increasingly allows it to work across more than one market for the likes of 20th Century Fox and British Airways.
WHAT IT MEANS FOR ...
- In the past, differences of approach in international markets have worked against communications agencies' ability to offer global insight. However, as Long says: "Global clients are becoming more agnostic in their media thinking."
- Companies such as Ingram and Naked are increasingly working for advertisers in multiple markets, albeit with some local differences.
- Companies such as Ingram and Naked have tailored their operations to the needs of local markets. Some of Naked's international joint-ventures, for instance, are more driven by execution than its London base.
- In a similar vein, Ingram's New York office has more of a focus on product development and brand consultancy, while brand and communications strategy tends to be driven out of London.
- Chris Ingram, the founder of Ingram, says: "The whole idea is that we are working at the top table and moving from being a supplier to a partner. This has been achieved. But we are still three relatively small businesses in three different markets. The real question now is how we move to being a bigger business."
- For Ingram, this means an expansion of its range of service into new areas, although this will not include implementation of advertising.