How Brexit Is Creating Opportunities for American Brands in the EU

London is no longer the desired hub it once was

Because of Brexit, American brands might want to rethink their overseas strategies. Getty Images
Headshot of Tilo Bonow

For U.S. firms planning European expansion, London has traditionally been the first touchpoint due to the language and cultural similarities for companies who could afford to start there. However, Brexit brings a lot of insecurity and potential disruption to that strategy. It is not clear which way the U.K. will go in terms of regulations when it comes to labor laws for non-U.K. citizens who and work there. Sooner than later, Germany and other markets such as France that remain in the European Union will become more relevant. This will be especially true for fintech companies that are dependent on EU regulations.

The German-language countries of Germany, Austria and Switzerland are, combined, not only the biggest market in Europe but also make up the strongest economy. Together, they will lead the EU.

In terms of number of startups funded, Berlin outperforms all other European cities and is also home to many unicorn companies (those companies that are privately funded and valued at more than $1 billion). Therefore, if a U.S. company must choose between expansion in the U.K. or the EU, they should go with the EU marketplace.

However, there’s an interim period that may have business development and marketing departments at odds. London was always the most expensive hub for tech companies within Europe. So, it was sometimes a longer-term plan for some that a shared language. Now, on the eve of Brexit and the plummeting pound, great deals are popping up that offer U.S. firms the opportunity to break into the U.K. market.

If a U.S. company must choose between expansion in the U.K. or the EU, they should go with the EU marketplace.

How can marketing professionals prepare in advance to best serve their companies? What criteria should be used to search for vendor partners and from whom do they accept proposals, usually a lengthy process, so that they are not left like a squirrel in the middle of the road? Here are some rules of thumb.

  1. Choose a best-of-the-best strategy, working with the most experienced and specialized partner in each country that is best for the brand via a lead European agency rather than a global agency. Many U.S. firms, especially in tech, are retreating from the old model of hiring global networks for a simple reason: They may be experienced in one or two markets, but typically never in all of them, and can leave clients feeling overcharged and underserviced.
  2. Europe has a diverse landscape of highly specialized and focused independent public relations firms that follow the local cultural routes and habits in storytelling, have relationships with regioinal journalists and influencers and are networked with regional trade organizations and conferences.
  3. Every country is different, not only when it comes to language, but even within countries that speak the same language. It is similar to the U.S. versus Canada. For example, Germany, is a very decentralized country, which means that holding an elaborate press conference in only one location is not the most effective option. There are many locations throughout the country where influential media is located. Therefore, smaller, more targeted press conferences in those locations are important. In comparison virutally all events are held in Vienna, and one-on-one meetings with individual journalists are common. In Austria, personal interaction is a significant component to getting business done.
  4. Especially in a larger economy like the U.K. or Germany, there are several powerful independent agencies that can work as a lead agency and function as a European marketing headquarters. The beauty here is that you get the best of both: a professional international network and local expertise.
  5. Even when a company‘s expansion launch goes country by country as opposed to simultaneous launches, making a smart choice of who you select to organize the European marketing rollout is crucial. The best practice for U.S. startups is to designate one of the team members to serve as the central point of communications to work hand-in-hand with European agencies and partners. This point person’s strength should be navigating the exchange of ideas across all borders as well as coordinating and monitoring all members of the teams to ensure branding and messaging consistency. Selecting the right European agency partner is as critical as in the U.S. Therefore, this person can’t be shy about asking the same in-take questions that must be asked of any potential partner.
  6. The EU increasingly standardizes legal regulations, fine tuning what can be decentralized and what should be centralized to work together for the greatest possible efficiency. This allows a firm to represent almost the whole of Europe from one city with prevailing legal certainty.

In summary, American companies thinking of expanding into Europe would do well to choose a European marketing partner located from one EU headquarters. The partner should then have strong regional and local connections and partners in other target European markets that are in the U.S. company’s expansion plans. This allows maximum flexibility and activation of a single sales team. It has the advantage of building on experience from previous projects and not repeating mistakes with each new market expansion.

Tilo Bonow is founder and CEO of Berlin-based Piabo.