Big Q Consultancies: Ad agency, consultancy biz models converging
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 Andy Sutcliffe of 34°.
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.
Andy Sutcliffe (@andythirtyfour) is the CEO and co-founder of 34°, which has been voted Specialist Agency of the Year by AdFocus and AdReview four times since it opened its doors in 2007. After a spectacularly unsuccessful stint on the client side, he was fortunate to talk his way into and work at some of London’s finest advertising agencies. Then, being a relentless optimist, he decided to launch his own agency, Ignition, in the late 1990s, backed by clients including Amazon, Sony, Warner Bros, Wimpy and Total. Both Ignition and its digital offering, Ignite, were sold to Omnicom in 2006. As well as unhealthy addiction to coffee, he is obsessed with navigating 34° through the new world of business in Africa.
IBM, Accenture, Deloitte, Mckinsey, PwC and KPMG are certainly highly acquisitive of agencies, with Accenture buying up 40 agencies in the last 18 months alone —certainly fanning competitive flames. “We don’t believe brands are built from advertising anymore,” stated Accenture Interactive’s senior MD, Brian Whipple. “They are built from an amalgamation of user experiences, so that is what we are focused on. A new level of connectivity between marketing and creative, business and digital technology is required and clients are looking to us to merge these worlds.”
Management consultants are looking to build a new breed of agency, “experience architects”, to help brands connect disconnected experiences and share accountability with clients for their business outcomes. They are certainly backing up their noise through acquisitions, and not just of digital agencies around the world. And who’s to say they will not be doing the same in South Africa by the year end?
CMOs understand that a data-led strategy, not just a creative one, is driving top-line growth. This explains why business models of consulting and creative agencies are converging. The key, of course, is the need to own high-level business strategy and this is an area in which ad agencies have been found wanting.
This also explains why some of the global network agencies are not just sitting there waiting for consultants to eat their lunch but are launching their own agency-consultancy offerings and so mirroring what clients are looking for. And so the race is on to discover how a creative industry learns to integrate data and analytics faster than consultancies can keep acquiring creative agencies to reposition their offering and become creative content producers.
The concern is that consultants have deeper pockets and have been more successful in acquiring creative talent and companies than vice versa. As a senior partner at Accenture once explained, “we will take out the agencies as we have more bright, creative people; we just haven’t been channeling them that way. Yet.”
Creativity vs analytics
This is the key battleground. Big consultancies underestimate the value of creativity and the culture required to make it happen, while the agencies underexploit the value of business analytics. Agencies need to bring in a data-driven approach and marry it to world-class creative.
But we’ve got to grow up and understand that creativity is essential yet only part of the solution business needs today, not the overall solution. Agencies have got to keep innovating and be future-focused to keep one step ahead of technology and customer change. We as agencies, even with our bullish narrative around integration and consumer-first solutions, are still too inward looking, hamstrung by our own commercial needs and older still structures. We also fear the science of data and analytics while believing that big ideas and product sales or brand equity remain our exclusive territory.
The real nature of creativity in our industry is changing. That old school creativity has morphed in our software age into a more-forensic need for data. If agencies are to grow share, we have to close the gap in our adoption of digital systems that liberate our bold creativity.
Solutions that work
At the end of the day, though, let’s not forget about the key partner in this dynamic: our clients. They really don’t care about the agency vs consultancy agenda.
They just want solutions. That work.
And they want to work with passionate partners who understand their business in totality. Not just the strategy. Or the creative. Or the technology. And it’s up to us agencies to deliver that. Or else…
- Big Q Consultancies: Difficult to shake campaign-dominant logic — Joshin Raghubar
- Big Q Consultancies: Problems used to be more one-dimensional — Wayne Hull
- Big Q Consultancies: You have to understand the context of clients — Heidi Custers
- Big Q: Agencies, consultancies have much to learn from each other — Prakash Patel
- Big Q: Can ad agencies take on the consultancies? — Jerry Mpufane
Launched 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.