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The Management Consultancies Are Knocking On Adland’s Door

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Welcome To The New Normal

The emergence of management consultancies as direct competitors to Agencies is getting a lot of attention of late. A passing fad say some. A misguided attempt to grab what rightly belongs to Agencies say others.

To those who blindly prophesise the failure of these groups, I have but one word in reply – bollocks!

For not only are they here to stay, they are getting increasingly stronger, and more powerful.

Successful mining of the consumer marketing space is not just about opportunity for them, it is business critical. Faced with the rapid decline of their historical cash cow, the Audit Practice, these groups have to find new revenue streams.

And the digital economy has provided just that path, allowing them to focus on large scale digital business transformation, with the customer at the centre.

As you would expect, the management consultancies are on trend with mapping that path:

  • They understand that clients prefer an end-to-end solution. To quote PWC: “PWC has an aspiration to be in what we call a ‘Category of One’, where we help our clients all the way from strategy to execution.” Sound familiar? One-Stop Shop? Or, to use Sir Martin Sorrell’s more recent moniker, ‘horizontality’?
  • While customer centricity has never been core, they are acquiring the necessary competencies and capabilities to credential themselves in this ‘new’ space. Again, no different than the path that Agency holding companies have long employed, but with a critical difference – the consultancies are integrating them into their businesses.
  • The types of companies they are acquiring are very specific as present. They are concentrating on design companies, as they know that innovation is critical to transformation, and design is often the catalyst for driving change, be that product, CX, UX, or IX. And they are also acquiring digital companies, to give them broad channel executional expertise, and address the long-held notion that consultancies are only about strategy, not execution.

Should Adland be worried? Yes. Deloitte would not have spent over $200 million in design acquisitions over the last three years if they didn’t consider this to be core business.

And the model is proven. One only needs to look at the success of companies like RG/A and Sapient, with similar end-to-end models, to validate this.

But more worrying for Agencies is that this finally puts these consultancies in the CMO’s office, instead of just the CEO.

And as success breed success, you would expect the consultancies to acquire additional companies with broader, scalable skills, and continue to try to marginalise Agencies.

Welcome to The New Normal.

Published first in Campaign Asia-Pacific

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