by MarkLives (@marklives) What may the broader agency and marketing community learn from the rise of non-traditional firms now operating in the advertising agency space? What processes and practices are giving these firms an edge, and to what would the rise of these players be attributed, in spite of the best integration efforts by the traditional agency networks? We asked a panel of key industry executives for their take. Next up is Heidi Custers of Deloitte Consulting.

Large consulting and technology firms such as IBM, Deloitte and Accenture have moved definitively into the digital-marketing-and-communications space ad agencies once hoped to dominate themselves. In the UK, IBM iX, Accenture Interactive, BAE Systems and Deloitte Digital UK already rank in the top five interactive agencies based on revenue; Accenture Interactive, part of Accenture Digital, was named the world’s largest digital agency network by AdAge last year.

Heidi Custers

Heidi CustersHeidi Custers, or Snowgoose (@SnowgooseSA), as she prefers to be called, is the digital transformation strategy manager at Deloitte Consulting. She’s walked most of the digital paths in South Africa, from web designer and client-side online marketing at Standard Bank in 2008 through to half a decade in the agency space as a business director at Quirk Agency, and, recently, four years incubating a tech startup aimed at improving professional services operations. Her passion for customer strategy, varied experience and thirst for knowledge has led her to consult to C-suite executives in some of Africa’s biggest businesses on digital maturity, disruption and digital transformation strategy.

To fully understand why the technology and management consulting giants are beginning to beat agencies, I believe you have to understand the context of the clients.

Moving marketing execution in-house

Big brands have been moving more and more of their marketing execution in-house over the past five years, especially in the digital space. It makes sense for clients to produce campaigns themselves in a tough economic climate, and get more “bang for their buck” with agencies by only using them for strategy and conceptual work.

At the same time, traditional businesses are getting disrupted by their leaner, digitally enabled counterparts. This means the definition of “digital”, as well as who on the c-suite is responsible for it, is changing. As customer experience strategy becomes a critical business capability, the role of the chief marketing officer (CMO) is expanding beyond branding — to business. As digital becomes pervasive in business, corporates are creating board level positions for digital specialists (chief digital officers [CDOs]).

It stands to reason then, that C-suite executives are now looking for strategic partners with relevant experience to help them navigate this new landscape.

Taking advantage of this shift

In my opinion, the bigger technology and management consulting firms are taking advantage of this shift in a pincer attack on the agencies. Tech consultancies are typically working with CIOs and CDOs to redefine how digital is used to enable business growth, while traditional management-consulting firms are capitalising on their influential C-suite relationships to deliver customer-led strategy to CEOs and CMOs. In both these cases, the consulting firms are tying our work back to the bottom line of the clients’ companies, instead of using awareness or interest success metrics that are still used by some agencies to measure success.

So, if clients are trying to do their own campaign execution, and are turning to consulting firms for marketing and digital strategy, where does this leave agencies? The big network agencies may either ditch the integrated “one-neck-to-throttle” approach and dive headfirst into becoming specialists at disciplines the clients don’t want to/can’t hire in-house, or go on the offensive and try and beat firms at their own game: capabilities, and consulting.

I personally feel that the specialist approach will work better, as it may be an uphill battle for marketing agencies, with their relatively lower margins and rate pressure, to make the necessary investments required to edge the large, influential consulting firms out of the clients’ boardrooms. Also, as consultants, our singular strength is the ability to add value by connecting all facets of a business, which means we’re less adept at deep-diving into an ultra-specialist role.

An interesting battle to observe

At the end of the day, all of this is just my opinion, however. I can’t predict who will win the war between agencies and consultants. One thing is for sure, though: it will be a heck of an interesting battle to observe.

See also


MarkLives logoLaunched in 2016, “The Big Q” is a regular column on MarkLives in which we ask key industry execs for their thoughts on relevant issues facing the ad industry. If you’d like to be part of our pool of potential panellists, please contact editor Herman Manson via email (2mark at marklives dot com) or Twitter (@marklives). Suggestions for questions are also welcomed.

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