Why Big Consulting is able to compete with Big Ad Agencies for Digital Marketing work

Big consulting-ad agency-StratoServe
Big Consulting firms are competing with Big Advertising agencies according to E.J. Schultz in the current issue of AdAge. Big consulting firms like IBM, Accenture , PwC and Deloitte are growing their digital marketing practices and competing with big ad agencies like WPP, Omnicom, Interpublic, Dentsu etc. for digital marketing work. Here is a quote from the article that summarizes the trend:

“The big consultancies are underestimating the value of creativity [and] the agencies are under- exploiting the value of business analytics,” said Ivan Pollard, senior VP-strategic marketing at Coca-Cola Co. “Someone’s going to crack that soon because data plus creativity is the future.” (From The Race is On, EJ Schultz, Ad Age, May 1,2017)

The trouble is that  big consulting firms are structured to have some great “right brain” analytical skills while Ad Agencies are structured to have great “left brain” skills. And here is why this seems to be happening:

  1. Digital advertising is no longer “half wasted” due to data: The famous saying that half the advertising is wasted applied to the pre-digital era. You really did not know for sure which ad was working unless you asked the customer every time she bought your product. Even then it was hard to determine whether it was the newspaper ad or the billboard that helped convert the prospect to customer. No longer true with digital data.
  2. Digital marketing data: Attribution is far more possible today and you can track conversions online. You can track back to which ads were working and which were not. In fact multi-channel tracking of consumer response to offline advertising like store displays and TV provides far greater accountability to marketing expense.
  3. Big Consultants are about process and boots on the ground: Big consultants are about process. They are very good at putting hundreds and thousands of employees on client jobs that need to get done. The clients don’t see the skills as core to their mission and are happy to have consultants do the work. These consulting firms hire college graduates with quantitative skills and these are very helpful in the new world of data driven marketing. Moreover, hiring and work is all about putting boots on the ground at the client’s office.Since there are deep connections already with the CEO,CFO – it is just a step to find a connection with the CMO.
  4. Ad Agencies are about creativity: Ad Agencies are all about creativity and have existed because it is hard to be innovative and creative within a rigid manufacturing environment. And great manufacturing setups need to be rigid to ensure consistent quality. Therefore in-house advertising agencies don’t work well partly due to formal rigidity and the politics of organizations that do not foster creativity and innovation. Ad Agencies recruit for creative skills for the back office (Art Director, Copywriter) or customer skills (Account Director). They have tried to catch up with big data and marketing analytics and one big regional agency proudly showed us the tech area that is physically at the back-end of the office!
  5.  Structurally not designed to do the other’s job: The big consultants being strictly process and “right brain” driven are great at building relationships at the C-Suite and armies of young college grads (MBA,Engineers) build relationships at the working level of client companies. However, the free-wheeling aspect of highly creative “left brain”  ad agencies cannot be replicated at the client in-house or at the consultant organization. Similarly, trying to infuse data driven “creativity” in ad agencies is difficult because everyone in the agency hated math from childhood!

All this brings more challenge to the CMO:

  • How do you get the creativity of ad agencies ?
  • And the analytic power and insights  of consultants?

As the economy becomes more about knowledge and ideas- it might not be such a bad idea , to keep the two tasks separate with the CMO doing the coordination. About StratoServe Digital Marketing Services.

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