Tuesday, October 3rd, 2017 | 7 min read
The title of this article isn’t a joke; it’s a serious question. Agency groups and large consultancies are increasingly fighting for the same client dollars or acquiring each other. For clients, this could be great: a one stop end-to-end solution.
Or, it could be a disaster.
I originally saw the agency-consultancy fight as a war: the infantrymen of the super agencies versus the great strategists of the consultancies. The consultancies dominate the high ground (strategic work) with their crack teams of experts, and are poised to strike deep into the territory of the agencies (campaign work). The agencies still hold almost all their territory, but their resources are stretched and their armies are weary from the battle.
But is it really a war? And, where is this all going?
The Middle Ground
A war would suggest it’s a straight fight between two sides with opposing beliefs where one will eventually win out. In reality, I think it’s more of a race to the middle ground somewhere between the two approaches. There’s no need for an actual war as each side engages with the client in different ways.
Agencies usually get a foothold into a client’s business at the bottom: “Yes, we’ll buy your media for you (if we can make a margin on it).” They often cover the cost of an expensive workforce with the margin they make on media, but sometimes they go too far, which means trust is an issue for many clients.
Consultancies usually go in at the top: “Is your management team baffled by the changing marketplace? Don’t worry, we’ve got the people who know that stuff inside out.” Then, once the strategic problem has been solved, the consultancy wins the trust of the people at the top and is positioned to snatch the delivery work away from the incumbent agency. Consultancies don’t usually have the people to deliver campaigns, so they buy an agency or two.
Early last year, Deloitte bought digital agency Heat to create “the world’s first digital creative consultancy,” while other leading consultancies have made dozens of similar acquisitions. Accenture bought customer-experience focused agency Karmarama so that it could “design customer experiences, build them, run them, and have an agency to lead on creative.” Anatoly Roytman, Accenture’s MD for EMEA, recently said of their strategy: “We want to partner our clients and become the custodian of the brand experience.”
The super agencies haven’t taken this lying down. Over the years they have been acquiring consultancies, specialist media agencies and technical platforms, and now they are integrating them more closely with their agency teams to expand their technical knowledge.
So, the more I look at the agency-consultancy conundrum, the more I see it as a chance to build something better – something that isn’t an agency or a consultancy in the classic sense.
A Dangerous Game
But there’s a problem. It isn’t exactly straightforward to merge an agency and a consultancy, and it’s a particularly dangerous game to sell your agency to a consultancy. Those that have been through it say it’s doomed to failure because consultancies are process-driven machines, and agencies are culture driven, creative places. Agencies that come under the wing of consultancies can find the transition very hard because the culture – the thing that made the agency a success – is often squeezed out.
If you run an agency like a consultancy, creativity is stifled. Conversely, if you run a consultancy like a creative agency, profits are likely to shrink. Agencies are creative places because they aren’t run like normal businesses. Creative minds must be unafraid of failure or being seen as time-wasters to do their best work. I’m not sure this is possible at a consultancy.
Can we have the best of both worlds? A creative consultancy that looks like a consultancy from the client point of view, with the experts, the data, and a track record for solving big operational problems, but can also deliver campaigns and produce award-winning creative work?
WPP’s Wunderman seems to fit this template after acquiring Acceleration, a leading marketing technology consultancy, to offer an end-to-end solution, strategy through to campaign delivery. Wunderman has also merged with fellow WPP agency Possible. These partnerships have been partly driven by pressure from WPP shareholders to streamline the business, and an ongoing desire to better serve shared clients – including Microsoft. This not only makes things simpler for the client, but it brings together over 2,600 tech experts under one agency roof (what technical expertise gap?).
When big agencies merge with consultancies, I don’t really fear for the agency or the quality of the creative output, because when the consultancy sits underneath the agency, culture can be protected.
The End Game
These agency mergers and acquisitions are taking place because their clients are dictating it (and the needs of their clients’ customers are also dictating it). If brands can’t deliver real-time customer-first digital experiences, then they will lose out to the Ubers, Amazons, AirBnBs, and Telsas who can. So I think we’re guaranteed to see more agencies following this template over the next few years.
Latency, the archenemy of real-time, is something we talk about a lot a Sprinklr: eliminating friction and delays in the customer experience management process. If things like strategy teams, creatives, technical experts, creative assets, customer data, and media plans all live and work in separate places, latency is rife. The Sprinklr platform is designed to be the place where everything works together.
The theory of disparate teams collaborating seamlessly to better serve the client is only workable if you have a platform that is built for this specific purpose. Sprinklr was originally built for enterprise clients to self-manage their customer experiences, but really it’s this new incarnation of a super agency that will get the most from the platform simply because they are the people with the skill, experience, creativity, and knowhow to take full advantage of it.
This new type of agency will be fully equipped with experts who can use the best tools to solve the their clients’ problems at the leading edge of data and personalisation. As we speak, these clients are busy digitizing their businesses, reducing latency, and tooling up with the platforms they need to manage it all – Adobe, MSFT, SAP, Salesforce, and Sprinklr.
They will need agencies that live and breathe this stuff; agencies that can help them tackle any business problem from top to bottom, devise strategies, build solutions, and deliver results. The biggest and best agencies that evolve over the next few years – the ones everyone wants to work for or with – will be those that can do this the best.
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