How Consulting Firms Build Advantages Over Traditional Advertising Agencies

Until recently consultancies operated almost exclusively in the customer interaction side of marketing which was reflected in their acquisitions of agencies focused on web and mobile development and user experience design amp160That has changed amp160In 2016 IBM iX acquired ResourceAmmirati Deloitte Digital acquired Heat and PwC Digital Services bought Fluid amp160Each of these agencies is considered a leader in agile creative design Accenture Interactive has been even more aggressive buying Karmarama in 2016 and Brand Learning and Wire Stone in 2017 to expand its creative platform amp160This pace of acquisition activity is expected to continue and potentially escalate some industry insiders anticipate the acquisition of one of the Big Six by a consultancy in the near futureWhile consulting firms and advertising agencies offer increasingly similar services important differences remain amp160Despite the acquisition push by consultancies agencies maintain a distinct advantage in creative reputation and a history of success in messagebased advertising amp160As oncecommon quotagency of recordquot deals dwindle traditional agencies must move to become more agile breaking down departmental divisions and developing content on faster timelines amp160Consultancies by contrast come equipped with stronger business and data analytics and a broader base of client solutions resources amp160They bring a focus on holistic business goals and customer experiencesamp160aimed at building brand loyalty through constructive interactions rather than TV spots and other traditional messaging amp160Consulting firms also have a distinct advantage in originating business while agencies generally pitch costly campaigns to CMOs to win business consultancies use CEO and board relationships to gain topdown access and pitch broader sometimes organizationwide projects as costsaving measures for a fee of course amp160While these projects may include traditional advertisements they will typically focus on customer experience products such as digital content management systems for stores eg adaptive advertising signage ordering kiosks improved mobile and web interfaces and loyalty programsConsultancies are beginning to encroach on another domain of traditional advertising and marketing agencies media buying amp160Agencies frequently package creative and media buying assignments which has led to concerns about conflicts of interest and transparency amp160These concerns which are especially pronounced as they relate to online ad placement have driven many advertisers to take stronger control of mediabuying practices Consultancies with their broader business advisory capabilities are well positioned to help amp160Some like Deloitte Digital provide objective media buying services as an alternative to potentially conflicted media buying services from advertising agencies amp160Others like PwC Digital Services offer auditing services or quotmedia assurancequot to ensure that ad content appears on the right websites at the right times accompanying the right content Accenture Interactive is helping companies build inhouse media buying allowing advertisers to bypass traditional media buyers altogether and guarantee transparency in costs placementamp160and effectivenessThese broad industry trends are starting to manifest in industry earnings amp160WPP the world39s largest advertising company recently reported a surprising decline in ad buying from the consumer goods sector amp160On August 23 after three consecutive years of 3 or better sales growth WPP reported a 05 firsthalf sales contraction amp160Its stock price has fallen 14 in the weeks since amp160Given WPP39s reputation as a consumer goods industry bellwether this drop is troubling for other traditional agencies amp160Consumer goods manufacturers traditionally some of the largest advertisers are facing a host of pressures from a Millennial preference for healthier locally sourced products to the intervention of activist investors amp160They have responded by cutting costs particularly on advertising amp160Many of these manufacturers are shifting focus to trendy lowcost social media campaigns and online influencers frequently at the behest of strategy consultantsThe pressures facing the traditional agency model are evident and it remains to be seen how or if the agencies will cope amp160Maybe they will become more agile rapidly deploying their considerable creative resources to address their clients39 needs amp160Maybe they will follow the consultancy model diversifying their business lines to create value in more situations amp160Maybe as the agencies have long claimed the power of creative will win out over the brawn of their business strategyfocused competitors amp160It is more likely however that the consultancies will prove capable of creating and delivering advertising content more accurately and effectively than the agencies ever couldClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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How Consulting Firms Build Advantages Over Traditional Advertising Agencies

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Mark Boidman

Carter Rauch

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How Consulting Firms Build Advantages Over Traditional Advertising Agencies

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Mark Boidman

Carter Rauch

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