Commentary

Did You Hear The One About A Consulting Shop Winning A Media Agency AOR?

A few weeks back, I wrote a column about the evolution of the agency business that resonated with many of you. Still, a key concept I proposed in the column seems to have been too subtle and sped past many of the folks who read it, so I decided to clarify that concept this week. 

Simply put, a big change is in the air as a result of all the media business currently in review. I predict one of the large consulting companies will win a media review, stealing the business away from the media agency holding companies and signaling a sea change in the landscape.

There are literally billions of dollars at play right now, with really only two possible outcomes.  In possibility number 1, each major brand selects a new media agency of record, and each agency of record selected will likely just have lost some other media AOR relationship.  Possibility 1 is like a massive dollar game of musical chairs where no chairs are removed and everyone gets a seat when the music stops.  

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Possibility number 2 is when real change takes place: One of the large, traditional consulting companies like Accenture, Deloitte, PwC or one of the others will win a large media AOR relationship.  

Some of the people I’ve chatted with over the last few weeks think this is crazy, but I don’t.  These shops are adept at working with and implementing technology to improve business processes at an enterprise level.  Doesn’t that sound familiar?  Most of the media business is quickly becoming integrated with technology to vastly improve the efficiency of advertising at an enterprise level.  Programmatic was the first step, but data-driven methodologies are being integrated throughout, with the obvious next step being the integration into television advertising.  This means the lion’s share of companies’ marketing budgets will be run and managed through technology.  Who better to manage these systems than the consulting shops that traditionally did so throughout the rest of the organization?

Let’s face it: Media buying is not rocket science.  Media buying is analytical mixed with human instinct, and in recent years it has become more and more analytical.  Media buyers who manage technology are highly valued these days, and the consulting shops can hire and maintain these teams just as easily as any agency can.  

Some of the consulting groups have quietly amassed media knowledge through hiring and/or acquisition under the guise of “digital strategy.”  They can pitch process and function, and they can even pitch based on performance.  Any intelligent brand, and especially one whose media review includes procurement in the process, would be intrigued enough to listen to a consulting group pitch. If the outcome is better performance at a more efficient cost, why wouldn’t they give it a shot? An innovative media lead at a Fortune 500 brand would look at this tactic as a way to shake things up, instead of simply selecting some holding company media agency that just lost a different piece of business -- which would effectively guarantee more of the same.  

With this kind of a new player in the mix, the game of music chairs would get real, fast.  When the music stops, someone would actually lose a chair, signaling true evolution in the media business.

I don’t know if any of this is going to come true, so I hesitate to call it a prediction, but if I were a betting man, this is where I would place my money.  The odds are that something has to change -- after all, the only constant in the world is change -- and right now smells like the right time for someone to come along and shake things up.

What do you think?

8 comments about "Did You Hear The One About A Consulting Shop Winning A Media Agency AOR?".
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  1. Steve Baldwin from Didit, July 1, 2015 at 11:46 a.m.

    "Media buying is not rocket science" should be retweeted far and wide. Bravo!


     

  2. Eric Duong from Optio Interactive, July 1, 2015 at 12:04 p.m.

    Totally agree. Aren't agencies hiring talent from consulting firms to oversee their technology integration efforts for clients? Regardless, it could easily go other way with consulting firms building their own tech driven media teams.

  3. Parkash Ahuja from RBG Marketing, Inc., July 1, 2015 at 12:26 p.m.

    I am in total agreement with Cory. The playing field is changing fast. Unless the Agencies of record add a value, they may not be the winners in future. Musical Chairs race is getting tighter because of the new players vying for the available spots.

    Coming from a Management Consulting and Operational background, here are my thoughts in terms of transforming ourselves:


    1. Pool Knowledge across Functions of the Client Companies

    2. Pool Knowledge across Levels within the Client Companies

    3. Deep Focus on the Analyticals and ROI

    4. Technologists with a proper understanding of client's existing technology platforms

    5. Data Experts with advanced data modeling expertise

    6. Proven results, reporting, and continuous improvement processes in place


    I will be very interested in further talking on this subject, near and dear to my heart. Please feel free to contact me if you like.

  4. Seth Ulinski from TBR, July 1, 2015 at 2:21 p.m.

    If media strategy favors agencies and technology strategy favors the IT consultancies -- one could make the arguement that today's data-driven digital advertising, sits in between the two. The fact that adtech (agency world) and martech (IT consultancy world) are converging adds further merit to this playing out. 

  5. Mark Scott from Sage Projections, July 1, 2015 at 5 p.m.

    This is an interesting idea. It may come to pass. The questions I have is  Why? If as you say media buying is not "rocket science" why does any company want to involve a high priced consulancy?  They are usually much more expensive and are largely staffed with young people in their 20's who might know some data analytics but nothing about how the different mediums really work. In the real market place it is not just enough  to look at the numbers. If that was the case, why have people at all involved in media? The other question I have is why so much focus and spending on the media side and so little on content? The best most efficient media plan in the world can not overcome a weak message idea. Maybe clients should spend more time selecting  firms  that can help their message content  than how the message is delivered.

  6. Kevin Horne from Lairig Marketing, July 1, 2015 at 5:38 p.m.

    Deloitte et al. will win a "AOR media relationship" ???  Really?  I think you are firing with a cannon when you should be using a more precise weapon, such as a bow and arrow. In the end, you reduce this to buying technology. Deloitte may well win one of those, but there isn't a soul, or sole, in Deloitte that understands media, never mind its broader context in marketing (even though a lot of media pros pretend that broader marketing doesn't matter anymore now that we have "tech"...*shakes head sadly*)

  7. Greg Armshaw from Graymatics, July 2, 2015 at 3:49 a.m.

    Delicious stimulus for debate, thanks Cory.

    A consultancy choice for a big inhouse deployment in mature markets might not be a bad option however the technology stack within the industry is a little too complex at the moment and we are bound to see consolidation.  Additionally we are likely to see some privacy legislation come in that will add to the disruption.  There is likely to be a continual refresh of targetting and delivery technologies for some time, so a management consultancy method of software review and deployment would be a failure if entertained before 2020.

    Better to let an agency soak up the costs of their "proprietary" platforms for a little while longer. Also agencies are the only ones who can mop up the overhang in markets where the technology platforms aren't working so well yet.

  8. Henry Blaufox from Dragon360, July 2, 2015 at 8:21 a.m.

    The major consulting agencies' corporate organizational relationships have been with IS (CIO, CTO), finance (CFO, accounting, HR) and the very top - CEO, COO. Engagement with the marketing and advertising operations executives is probably not ingrained yet, except perhaps at Deloitte, since that firm has had a renowned retail and marketing management practice for many years. So unless decision makers from these other departments are part of the review process, it will be hard for the consultancies to make convincing presentations for such a radical change all at once. Too much money is at stake, so the risk-reward is out of balance. Perhaps a safer way to try this would be with pilot demonstration engagements.

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