Commentary

Blurred Lines

I was recently asked what I thought about the blurring of the lines between what used to be traditional advertising consultancies and agencies (digital, media and creative).

We have certainly heard from some of our clients directly that they are questioning the wisdom of sharing their confidential client data, be it media, agency pricing or other proprietary content, with consultancies who are now themselves at the same time (digital) media management companies, data companies or creative agencies (or all of the above). While in the past the auditor or agency adviser was valued for its independence, for some these lines have become blurred, with their impartiality now in question.

Who are we talking about? First and foremost, companies like Accenture and Deloitte, but equally so. the likes of Adobe, SAP or IBM — and even Facebook and Google.

So have marketers or their agencies a real cause for concern?

To start with the latter, the agencies’ argument is that they do not want to share their media-buying results (traditional or digital) or their pricing and incentive models with an agency auditor that could use those results to determine their own price points and competitive strategies that could very well undermine the traditional agency.

The same is true for a consultant’s creative review services. If consultants gain a detailed and intimate knowledge of the time, the cost, number of FTEs, the production cost, etc. that the creative agency is charging for its work, it would be fairly easy for consultants to develop a competitive proposal if they also have a creative offering themselves.

Accenture and Deloitte present easy-to-spot conflicts of interest in these scenarios. But don’t underestimate tech companies, either. IBM has a business called IBM Global Business Services with a thriving consulting arm. SAP offers Digital Business Services, offering digital transformation strategies and planning. Adobe, Salesforce, Google and many others with direct relationships with clients will offer their help with the development and implementation of brand innovation, market discovery, digital media services, data and cloud applications, and many more.

It’s obvious that some of these encroach very clearly on the domain of the advertising agencies. Or, that advertising agencies have encroached on the domain of the consultants.

The other question marketers are asking is if service providers that are absorbed into a consulting group can maintain their competitive edge. We are of course in a people-driven business, so it’s a question of whether the key individuals on the agency or service that is purchased can retain their key people, and if the cultures of the two entities can successfully merge and align.

Being able to drive revenue and cost savings through mergers and acquisitions is a valid strategy for growth in any business, even a consulting one.
It’s fair to say that in terms of agency services, marketers are in a buyers’ market, and the increased competition is, from their POV, probably not a bad thing. But it’s fair to note that as much as agencies have agendas that are set by their own business interests, this is now more and more true for many consultancies as well.

As the saying goes: “For a man with a hammer, every problem is a nail." Make sure that you hit the nail on the head when working with consulting firms, and that a man with a hammer is what you actually need.

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