London's Deepend migrates to the U.S.

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Fred Brown and his colleagues at Deepend have high aspirations for the digital design shop that officially opens offices in New York and San Francisco the week of June 5.

The London-based operation is ready to establish itself as "the leading new-media creative agency in the U.S.," said Mr. Brown, managing director.

That's a tall order for Deepend (www.deepend-usa.com), which opens its doors in the U.S. with 17 employees. The goal, however, is within reach, contended Mr. Brown, 29, given Deepend's award-winning creativity, independence and know-ledge of a range of marketing platforms, including interactive TV.

Deepend opens U.S. operations June 7 with a handful of clients, including the Kenneth Cole shoe line and Kenneth Cole Reaction, a line of men's clothing; Imagine Media, publisher of Business 2.0 and PSM--100% Independent PlayStation Magazine; Answerspace, an e-commerce technology developer specializing in the financial industry; and Infineer, a broadband technology provider.

Mr. Brown also said the creative shop has piqued the curiosity of several U.S.-based advertising agencies, notably Wieden & Kennedy, Portland, Ore., which he said is interested in working with Deepend on clients' projects. In the U.K., 40% of Deepend's work is with traditional agencies, he added.

AIRTIGHT, BACKEND, GLUE

Deepend, founded in 1994 is owned by Deepgroup, a London-based holding company that has overseen the launch of three partner agencies since Deepend: Airtight, a design consultancy; Backend, a technology infrastructure developer; and Glue, an online advertising agency. Deepgroup plans to launch Airtight, Backend and Glue offices in the U.S. later this year.

"Deepend is the flag-waving, sexy bit that goes in (to the U.S.) first and the rest will follow," Mr. Brown explained.

A digital design agency, Deepend builds Web sites and e-commerce capabilities and creates short films, moving images, games and other online identity and marketing work for companies. The shop is also developing applications to use for wireless application protocol, other wireless devices and interactive TV. European clients include Andersen Consulting, British Telecom and Microsoft Corp.

Deepend does not, however, design banners and other forms of online advertising; Glue handles that. Deepend does work with Glue, Airtight and Backend when a client's project requires it.

The companies are separate because "having really focused specialists in each area" is Deepgroup's strategy, Mr. Brown said.

"[Deepend] can deliver a whole, integrated approach, but also can do just design if that's what [clients] want."

Deepend also can work with creative or interactive agencies outside Deepgroup, but has not so far.

U.S. ENTRY VIA URL PURCHASE

In addition to London, New York and San Francisco, Deepend also has Rome and Sydney offices, and plans for an office in India.

Deepend made no acquisitions to open shop in the U.S., but the San Francisco office was born thanks to Flymedia, a new-media company that had registered the deepend.com URL for an online magazine Flymedia started to develop but wanted to abandon. The U.S company asked Deepend if it wanted to buy the URL. Deepend did just that and hired the former employees of the new-media company to staff its San Francisco office.

Ironically, the Flymedia group in San Francisco got the idea for the URL from a book called "The Deep End." The author, Frederick Brown, is unrelated to Deepend's Fred Brown.

Deepend has won awards for its work, including a Gold Clio for London's Design Museum and an award from the London International Advertising Awards for the Web site for Volkswagen's new Beetle.

U.S. REVENUE TO HIT $4 MIL

Deepgroup's largest company, Deepend has 120 employees out of Deepgroup's 170. Deepend expects U.S. revenue this year of $4 million and plans to have 25 employees in the New York office and about 15 in San Francisco by yearend.

Deepgroup has no immediate plans to go public. "We're independent and looking to stay that way because it gives us creative freedom," Mr. Brown said.

Deepend's U.S. migration follows that of London-based Outrider, which opened offices in Chicago; Farmington, Conn.; New York and Bend, Ore. Outrider is wholly owned by Tempus Group, a U.K.-marketing services holding company that owns European media-buying service CIA.

Overseas agencies still face an uphill battle opening offices in the States. The U.S. "is a tough market and highly competitive," said Marissa Gluck, Jupiter Communications analyst.

Agencies backed by U.S.-holding companies have slightly better chances than independent shops, she said. "Going it solo is extremely difficult because there are already some established players [in the U.S.] that have impressive client lists and talent," such as Razorfish and Agency.com, both based in New York.

Copyright June 2000, Crain Communications Inc.

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