Nov. '11 Technology PR Magazine
A perfect storm of contributing economic, social and political factors has cleared the way for what some experts believe could be an industry diaspora in the Dutch capital.
First there are the obvious factors. The country is sitting on a bounty of preexisting wealth. Ranked by GDP, the Netherlands has the 16th largest economy in the world. But its affluence is nimble. A large chunk of its national income is derived from its banking and insurance industries, but it’s also Europe’s second largest producer of natural gas (and ninth in the world). Rotterdam holds Europe’s biggest seaport. Long standing trade deals with Korea, China, Japan and Brazil have laid a healthy tradition of foreign investment. Then there’s tourism. Amsterdam is repeatedly Europe’s most popular destination, receiving an average of nearly five million visitors a year. Not bad for a town whose urban cluster houses only about 700,000.
Chances are you’re probably familiar with a number of famous Dutch brands: Unilever, Heineken, Philips or coffee giant Douwe Egberts. American companies like Nike have set up flagship offices there. Tommy Hilfiger famously moved their international headquarters from the U.S. to Amsterdam. The Netherlands is now currently home to nearly 1,800 U.S. companies, and the numbers keep growing every year.
Multinational ad conglomerates seeking to take advantage of this market began setting up shop in the capital a long time ago. Omnicom giants Fleishman-Hillard and Ketchum both have offices in Amsterdam (Ketchum has a second office in The Hague, along with Interpublic unit GolinHarris). WPP flagship Hill & Knowlton has run an Amsterdam office since the 1970s.
“It started with the big guys,” said Daniel van Vulpen, Area Director of the Netherlands Foreign Investment Agency, a government business forum that is part of the Dutch ministry of public affairs. “Now there’s a nice mix of international and Dutch talent. There’s collaboration between industries to make this growth happen. There’s not that sense of competition you see in other places. In general there’s an understanding that we need to bring in people who are specialized.”
The Netherlands’ plentiful resources, monetary endowment and groundswell of powerful domestic brands would be enough to safely bet the country is in good shape for growth in its creative services sector. But there’s something else. A slew of recent economic initiatives spearheaded by the Dutch government has begun attracting international attention, and now a swarm of international companies — both multinationals and independent shops — are moving to the Dutch capital at a clip faster than most European cities.
For several years the country has undertaken one of Europe’s most voracious foreign investment campaigns to integrate outside talent into Amsterdam’s preexisting pool of creatives. Current corporate income tax rates in the Netherlands — 25% — are attractively low for a European nation. The Dutch tax system now provides a new rate — 20% — for the first € 200,000 in taxable company profits made by an international company.
Then there’s the country’s famous 30% ruling. If you’re an employee brought from abroad to work in the Netherlands, the Dutch government will now reimburse your company 30% of your salary, as long as your trade has been designated by the government a scarcity in the Dutch market. An example of one such scarcity? Creative services.
Perhaps not coincidentally, an influx of foreign advertising, PR and marketing shops are now taking residence in the Dutch capital. A growing number of independent firms already popular in their native countries — like Sixty Layers of Cake (South Africa) and powerhouses Taxi and Sid Lee (both from Montreal) — are now cropping up along Amsterdam’s canals and thoroughfares.
London-based market research agency BrainJuicer is one such shop. The company opened its new office in Amsterdam less than five months ago. Managing Director Carola Verschoor said many of BrainJuicer’s clients are international, and for several years they’d been receiving a growing roster of Dutch clients who wanted local representation. Though their boxes aren’t yet fully unpacked, already the company’s new Amsterdam digs are swarming with a range of Dutch business. Current clients now include Dutch telecom, pharmaceutical, energy and petroleum companies. Japanese running shoe maker ASICS and Dutch dairy giant Friesland Campina are also clients.
“We were growing and wanted to be closer to our Dutch clients. We also wanted to be closer to the creative community in Amsterdam. It just made sense to open an office here,” she said. “Market research has the power to inform and inspire, and we believe we can effectuate that change in Amsterdam. We want to be the change agents, and that means we have to have local experts on the ground. We intend to keep it that way.”
While Verschoor cited Amsterdam’s creative tapestry and a proximity to their clients as a reason for BrainJuicer’s new satellite, she admitted the alluring tax cuts might have something to do with the recent glut of professional migration into the city.
“What Holland has seen in innovation is key to the country’s future. [The Dutch] are creative in an applied sense, but they need a creative push to get them where they want to be and they’re looking to the idea of import to maintain that creative edge,” Verschoor said. “In general people see this as a positive thing, as bringing a more cutting edge to the economy. The Dutch are very open in terms of how they look at their own borders. They believe a mix of culture and diversity leads to great things. They believe they need the best of all worlds.”
One could argue that Amsterdam is a town made for the ad and marketing industry, a place where creativity is woven into the cultural fabric. For one, it’s an extremely diverse city, a living test market. Amsterdam is currently home to more than 170 different nationalities — about half of its citizens are from other countries. It’s also an educated city. Its universities are almost as famous as its museums, and Amsterdam has an unusually high penetration of print content consumption — magazines, newspapers — for a city its size. It’s also a city internationally famous for its tolerance and progressive legislation. It’s a culture that encourages, even cultivates, creativity.
Then there’s the technological penetration. According to Herman Kienhuis, Manager of Business Development for Sanoma Media — a top Dutch consumer magazine publisher — the Netherlands takes residence in the top group of smart phone adaptors, selling more iPads per capita than anyplace in the world (one in 16 people in the Netherlands own an iPad). It’s an unusually tech savvy culture, one that adapts readily to change.
Already Amsterdam is teaming with local industry talent. Dutch marketing giants like DDB, FHV and 180 Amsterdam have been big players in the local ad industry for decades. Each operates globally but with a sensibility that is patently Dutch, offering an international marketing and branding perspective that was born and raised in the local market.
“Amsterdam is changing, but it needs to move faster and stop splitting itself down local and international lines,” said Chris Baylis, Executive Creative Director of Tribal DDB, a subsidiary of DDB Amsterdam. Baylis said this “split” can be illustrated in the fact that his agency is the only office in Amsterdam that employs a majority of Dutch natives while tackling a majority of international business. Most Amsterdam agencies, by contrast, either employ locals who work on local campaigns or international agencies that employ solely expats.
“After all, the majority of awards have been won in the last few years by internationally focused agencies for global clients, not local agencies working for local clients. What Tribal have managed to do is use a mix of local and international talent to go after international opportunities. Other countries are often more local and, in an increasingly globalized world where clients are looking for efficiencies and control, local budgets are shrinking and the work becomes small, tactical and irrelevant. This is happening more and more in London. New York still has the advantage that local means 250 million people who all speak the same language,” he said. “Amsterdam needs to protect its bilingual and international advantage and continue doing great global work.”
Amsterdam is literally landlocked by its tracts of feeder canals built in the 1600s. As a result, many of its newest business districts now lie on a sprawling periphery. One area where its creative fauna is flourishing is in the Amsterdam-Noord (Amsterdam North) neighborhood. Located on the northern shores of the IJ bay, the Amsterdam-Noord neighborhood is housed on the banks of a former shipyard, accessible by passenger ferry. It’s recently been heralded the “new creative capital” of the city. Already, companies like MTV, Red Bull and VH1 have offices there.
Fronteer Strategy, a brand consulting and development firm, is another creative group that now calls Amsterdam-Noord home. Firm Partner Martijn Pater referred to the neighborhood a “playground for artists,” a place that has been gaining traction since the country began its rebound from the global economic slowdown several years ago. Indeed, inside a former airplane hangar across the lot from the MTV studios, a colony of set designers, architectural consultants and furniture makers work in makeshift 200-square-foot cubicles constructed side-by-side across the length of the hangar. Amsterdam’s new creative underground bears a striking resemblance to a very large, very vibrant clubhouse.
Fronteer Strategy was formed in 2008. Their clients include big names like Heineken and Dutch airline KLM. Pater is a proponent of the marketing strategy known as “Co-Creation,” an open source marketing equivalent of crowdsourcing that unites a select cadre of interdisciplinary members across the branding spectrum — developers, stake-holders, even consumers — to share and create relevant brand solutions under one umbrella.
“We have a very international outlook, also because our own home market is so small,” Pater said. “We have a history of thinking bigger than our local culture or market. This makes us [happen] upon to new ideas. Also, we tend to have a relatively high level of creatives living in the city. It is a playground with a high quality of life appealing to people tird of the London or New York grind.”
Back in Amsterdam proper there’s the Miami Ad School’s Amsterdam campus, located off the Herengracht canal just a short walk from the famous Westerkerk church and the Anne Frank House.
Students from all over the world flock to Amsterdam for an intensive 10-week course on advertising. The school’s Director is Peggy Stein, a 30-year ad industry veteran and Co-Founder of the shop One Big Agency, whose offices are located in the same building as the school.
The city’s successful “I amsterdam” campaign has been cited as instrumental in getting outsiders to take notice of the Dutch market. A multifaceted marketing salvo in the vein of “I ♥ NY,” I amsterdam educates visitors to the many travel, business and cultural activities in the Dutch capital.
Apparently the campaign is working. Foreign direct investment into the Netherlands for 2010 included 155 foreign projects, accounting for planned investments of $1.3 billion and representing 3,793 jobs. North America was responsible for about 32% of this growth. The industries taking the greatest share of these projects? Marketing and sales.
In October, Amsterdam ranked number-four in Cushman & Wakefield’s annual “European Cities Monitor” poll, which ranks international corporate perception of cities across Europe. Amsterdam’s gains are significant; they’re up two points from their previous position of sixth in 2010.
“Amsterdam is renowned for its diversity and creativity,” said Amsterdam Deputy Mayor Carolien Gehrels. Gehrels spoke with O’Dwyer’s from the roof of The Mint Hotel, a luxury hotel that held its ribbon cutting ceremony that evening. A stone’s throw from Amsterdam’s Central Station, the new hotel has created 230 new jobs in the city.
“Our international reputation is growing, and we’re very proud to be in that league,” she said. “Our strategy is to bring Amsterdam to the world. I hope we can be a very important place, a gateway between Europe and the United States.”