Vincent Digonnet: Ad agencies and consultancies are ‘like oil and water’, they just don’t mix well
Creative agencies risk facing “confrontation” and “disappointment” after being acquired by management consultancies, the chief executive officer of digital agency MullenLowe Profero Asia Pacific has said.
Following the high-profile acquisition of Australian independent The Monkeys – Mumbrella Asia’s APAC Creative Agency of the Year – by Accenture earlier this month, Vincent Digonnet has issued a cautionary note to agencies who may be tempted by lucrative offers from international consultancy firms such as PricewaterhouseCoopers and Deloitte.
Speaking to Mumbrella Asia, Digonnet said the clash between a consultancy’s “process-driven” environment and an agency’s culture often resulted in the original creative talent departing shortly after the acquisition.
“It’s like oil and water: management consultancies are built on process. Advertising and creative agencies are built on culture. And when you merge a process-driven company and a culture-driven one, sometimes there is disappointment,” he explained.
“There is no culture in consultancies; there is incredible intelligence and analytics. So there is confrontation and the risk is that your culture is hitting a brick wall and people decide to leave.
“The agencies cannot stand being just a dot in a process, while the consultancy may not understand why it takes so long to create a video for example.
“You can have tension: and if you start losing the key people who made the culture, the whole benefit of buying a creative agency disappears. I have witnessed this: I would be interested to see how many of the original people are left in a company three years after a merger.”
Speaking at the time of The Monkey’s acquisition, Brian Whipple, head of Accenture Interactive, said the acquisition will enable the company to “integrate creative excellence with digital customer experience delivery”.
Elaborating on why consultancy’s take an interest in creative agencies, Digonnet explained: “The biggest transformations to hit businesses in the future is not transforming operations with technology, but by transforming the experiences of consumers. Marketing-linked and creative companies always start from the consumer rather than the technology. So for [consultancies] to be successful in that, you have to have human insight as the core.”
On the other hand, for the agencies in question, money is a key motivator, he added. “If you’re selling a company, you want to make as much money possible. If you are suddenly desirable to the consulting industry – which has more money than the advertising industry – then you’re going to sell better. You will be crucial to that company and not just another advertising agency in a huge holding company.”
However, despite some high-profile acquisitions in this sphere, for example when Accenture acquired London creative shop Karmarama in November, Digonnet said he did not foresee a rise in the number of such mergers due to the culture clash. Instead, he predicted, marketers will look to using consultancies as part of their overall strategy, alongside creative and media agencies.
“Let’s not forget that you can never change a company just because the market has changed. You have a lot of companies whose marketing is still grounded in the 20th century. Even though digital transformation has broken down the channel silos, it is still going to take some time for the CMOs to be able to leverage each partner. A lot of organisations do not have the talent to really harness this, so for now much of it is trial-and-error.”
“But as the new generation of marketers emerge, who have grown up with digital technology, they will be more capable of bringing together management consultancies and agencies, and using them for their own benefit.”
Agree 100%.
The agency holding groups themselves have a pretty terrible track record of integrating new agency acquisitions into their portfolios. How many of the independent brands Dentsu Aegis acquired in the last 18 months still exist? Are Vocanic and Essence loving life under WPP revenue scrutiny?
Management consultancies will find this so much harder as they have little idea about the industry they are buying into.
ReplyDear Vincent
ReplyAccenture acquired Fjord 4 years ago. At that time #Fjord was cutting edge in design thinking and creativity, an excellence built on a strong culture shared by 180 fte’s.
One of our first “mix”.
4 years later Fjord counts more than 1000 people, all over the world in 20+ studios. Neither Mark or Olof, the founders left. Certainly not ! Why? Because they have kept their culture, they have strengthened their culture and they combined their skills with other skills to become stronger.
It’s a fantastic success !
You say that there is no culture in consultancies.
I have the opposite view as you can guess having worked in Havas, in WPP and now at #Accenture.
This is amazingly different, there is ONE culture at Accenture federating 400 000 employees with new joiners everyday.
Let’s have a look back on the french market, a market you know well indeed. Do you remember … Kassius, Duke, Soleil Noir, Mediagong … all great creative digital agencies, all acquired by advertising holdings or agencies, all gone now and not only the founders, all the staff, wiped out !
Something went wrong mixing oil with oil or water with water. A question of culture ?
When we acquire companies, we acquire managers, leaders and teams. We offer everything possible to grow the business, their business and to sustain the entrepreneurship spirit !
That ‘s why people who run successful agencies or companies are happy to talk with Accenture, draw the future, imagine new frontiers.
We passionately help our clients to dive into the “new”.
The Monkeys, Karmarama, but also Kunstmaan in Belgium, SinerSchrader in Germany, ADDialeto in Brazil … share the same ambition, the same passion and yes, yes … the same process.
I can’t predict the future but I can comment our present time : our offer is extremely well received by the market.
Great response by claude chaffiotte!
If I had an agency I would rather join hands with a serious consultancy
Replylike accenture than some flake who has interior motives for acquiring me anyway. For instance, look at what wpp does to the agencies it acquires. Enough said.
Interesting response from Claude, and VERY good points. There are so many “failed” acquisitions amongst the holding groups with very poor integration of the acquired companies. Would be very interesting to see some research / investigative journalism into the subject. Logically, the consultancies would be better positioned to handle such a process with long-term success (even if they are “dry” and “process-driven”).
Personally, I believe there is room for both the agencies and the developing consultancies in the creative/marcomm industry and that the answer is a lot more nuanced than the numerous POVs that come out every other week on the subject. A very interesting period of change we are going through and a much needed wake up call for certain agencies to get serious about their business though!
ReplyOf course Mr Digonnet has no bias at all in writing this article…
ReplyDear Claude,
Failed acquisitions from Advertising based holding companies are numerous everywhere in the world, and unfortunately spoil strategy consisting in preventing competition to acquire talents as opposed to strengthening one’s own capability is partly responsible for that situation. But wrongs in ad land do not make it rights in Consultancy world.
Fjord is a brilliant brand, and a great business model, but I am not certain they would be happy to be described as an “agency” when last time I checked, they described themselves as a “Design and Innovation Consultancy”, consultancy being a key word here . Three Monkeys is a totally different kettle of fish, and allow me to have my doubts in the outcome (it reminds me Sapient acquiring Nitro), but I would be very happy to stand corrected. Verdict in 3 years.
The point is that there is a bit of a myth going around, that Management Consultants have been taking business from ad agencies, and there is a wild goose chase going on for the past thirty years that ad agencies should become Management Consultants. Both businesses have been fundamentally disrupted by the digitalization of the world, and a third player is now trying to eat both consultancies and ad agencies lunch, systems integrators.
The reality is that when the dust settles, systems integrators will remain systems integrators, Management Consultants will remain Management Consultants, and creative agencies will remain creative agencies.
The big shift is that all those players have to learn to work with each other’s when they have been ignoring each other’s for decades.
Business transformation is at the confluence of Business Operations and Human Inspiration, and businesses always start from their DNA: Business Consultancies will always start with Organization and Process, Systems Integrators with Technology Platforms and Data, and creative led organizations, with Customer innovation strategy and journey mapping.
Depending on the center of gravity of an organization, it will start its business transformation journey with a Management Consultancy, a Systems Integrators or a creative agency. Whatever the starting point, all the players will come into the process at some stage, and they will have to integrate new skills in order to collaborate and produce actual transformation.
Do they need to acquire each other’s to achieve this? I don’t think so. Are the sporadic acquisitions of advertising agencies by management consultancies in the past few years the premise of an acquisition landslide to come? I don’t think so either.
ReplyFood for thoughts…
Speaking from first-hand experience I agree with you, Vincent. I was part creative agency CumminsNitro when Sapient took over. It resulted in the slow death of a creative culture that was fuelled by an expectation that creatives will get onboard the consultancy bus. We did for a bit, we sat down the back and carried on and were then told to grow up and be responsible like everyone else in the company. There is now no-one left from the creative agency, instead, there is a new breed of strategy, UI, UX, IA, who talk about stuff like CPC, PPC, PPV, CPL and so on. If I could offer some words of advice it would be not to integrate but to treat acquisitions like holding companies and keep the cultures separate.
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