Advance of the Management Consultancies

For many years agencies, both creative and media, have debated the impact that the management consultancies might have on their business.  Their conclusion?  Nothing to see here; there’s no problem, in fact just the opposite as we build on our communication skills to move smoothly upstream onto the ground occupied by the consultancies.

How wrong they were.  Five management missteps and their consequences have opened the door.

First, management consultancies started many years ago to mop up the cream of the new talent emerging from universities.  It seems an age since the old full-service agencies had their pick of the graduate crop.  Today, management consultancies pay more and could be said to offer a more developed, flexible future.

Yes, advertising and media may be more fun, and have never been more challenging, but even those charged with recruitment don’t sound all that convinced that “fun” is much of a hook.

Second, despite having an age to do so, the agencies have failed to move upstream into their clients’ boardrooms.  Agencies of all hues are still hardly known to CEOs; after all, most of them still refer to the media agencies as media buyers.

Speak to any CEO about McKinsey or Accenture and you’re guaranteed an informed reaction.

Third, the media agency sector, or at least that huge part of it represented by the publicly owned marketing services groups, long ago decided that their planners, strategists and futurists were in effect nothing more than the dancing girls put there to lure punters into the casino, where the real business was done in a seedy backroom by the wheeler-dealers.

Fourth, one ex-agency executive was given all the evidence he needed to blow the whistle.

Fifth, hearing the whistle, advertisers’ trust in the network media agencies has collapsed.  More and more advertisers have decided to act, either by reviewing their agency contracts, holding pitches based around a rather vague (in many instances) notion of “transparency” or taking more and more of their media spending in-house.

The management consultancies could surely have never imagined being handed a gold-plated, access-all-areas pass into the marketing service business.

But here they are.  Accenture, who have acquired Karmarama in the U.K., has said they have no interest in the media buying business.  I bet they haven’t. Media buying has been the focal point for the media agencies’ critics; is well on the way to being largely automated out of existence, and when other factors are combined with advertiser focus and pressure will become a low margin, low interest activity.

Media planning on the other hand is classic consultancy territory.  Data-driven consulting with a dash of creativity must sound familiar.  Mix in the fact that agencies have indicated (by not charging) that they themselves don’t really value the discipline, and what you have is an open invitation to new entrants.

When these new entrants have smart people, boardroom credibility, data expertise and deep pockets to deliver both the best of the agencies’ staff and the necessary technology -- well, watch out!

A future Cog Blog will explore the media agencies’ options.  Expect it to be shorter than this one.

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