‘Creatives don’t want to work there’: Agency bosses debate the threat of consultancies
A panel of advertising and media agency bosses argued this afternoon that consultancies such as Deloitte, McKinsey and Accenture don’t have the stomach for the “dirty, gritty” business of executing marketing campaigns, and can’t attract the creative talent to resource their foray into the creative sector.
L-r: Joe Nguyen of ComScore interviews Starcom’s Ken Mandel, Ogilvy’s David Mayo, Susana Tsui of PHD, Carat’s Sean O’Brien and Josh Black of GroupM
In an at times awkward session at the All That Matters event in Singapore, Susana Tsui, APAC CEO of PHD, said that when she comes across consultancies in pitches, they “run for the hills” when it comes to execution because they “can’t manage” that side of the business.
Tsui’s former Ogilvy colleague Ken Mandel, now regional head of innovation at media agency Starcom, presented the same argument, pointing to the acquisition of digital agency AKQA by Accenture 15 years ago as an example of how the agency and consultancy worlds make an uncomfortable fit.
“In 2001, Accenture announced a $71m investment into AKQA. So this is nothing new [consultancies moving into the creative sector]. That [deal] didn’t go anywhere by the way. It is a very different world,” Mandel said.
“Culturally, if you’ve worked with Accenture, you know why they’re very strong. And when you work with agencies, there’s a reason why we do what we do.”
Mandel: “Once consultancies get out of their helicopters they may not like what they see”
“These two worlds coming together? Maybe. I think once Accenture or McKinsey get out of their 50,000 feet [high] helicopter down to our level they may not like what they see,” said the former Ogilvy, Yahoo, Salesforce and XM executive.
David Mayo, APAC CMO of ad agency Ogilvy and also CEO of Bates CHI & Partners, noted that while consultancies compete with agencies at a strategy level, they won’t be able to attract the talent to pose a threat on the creative front.
“If you’re a client and you want structured business thinking, you can go to McKinsey or one of the consultants – or you can go to an agency,” he said, referring to Ogilvy’s consultancy business OgilvyRED that launched in Asia at the beginning of the year.
“As creativity and the value of the brand has made its way into the boardroom, you need more of that style of delivery and thinking and structured thought,” he said.
“But I think it’s going to be very difficult for an Accenture or a Deloitte or any of those guys to put a creative department together. Because creative people won’t want to work with them. So if they want to outsource to us on the deliver, we’re happy to do that. But we definitely compete on the strategy level,” he said.
The more frank among the panel about the competitive threat posed by consultancies was Josh Black, the APAC head of content for GroupM.
“They’re absolutely a competitor,” he told panel moderator Joe Nguyen, the APAC boss of research firm ComScore. “And frankly in a number of respects they have deeper and better relationships at the c-suite level that perhaps we do.”
However, he later added: “At the ground level, we would all agree that it’s a dirty, gritty business on the base level. I’m not sure they’re up for that. They certainly like talking at the top level.”
Sean O’Brien, the APAC CEO of media agency Carat, said that where consultancies pose the biggest competitive threat is by buying their way into the sector.
“That’s where I’ve seen the most competition over the last couple of years. From a client perspective, I haven’t really seen any of that yet,” he said.
“But the companies they’re acquiring… But again, when you acquire a company, it’s going to be very interesting to see how they integrate those companies into their offerings,” said O’Brien.
Among the recent acquisitions of a creative firm by a consultancy in recent times was PwC’s deal with Hong Kong agency Fluid in February this year.
I have been on the receiving end of pitch presentations by consultancies, network agencies, indie creative shops and those who specialise in setting up in-house studios.
Allow me to share, support and debunk some of the above comments.
1-The biggest difference between consultancies and agencies is where the level of contact begins and ends.
Consultancies are called-in when when the C-Suite, usually the CEO recognises a need for change either to their business model or industrywide threat, never about the brand, advertising or creative work.
Consultancies are normally given more time, budget and access to the client’s business and they have a direct line and face-time with the CEO.
On the other hand,agencies work from the bottom-up. They start by seeing an opportunity or a threat through marcom or brand filters, apply a strategic rigour to support a new campaign and if needed, put forth a case for changing the business model.
The difference is obvious. Agencies do not have the same access to the internal data, consultancies have, they do it on a spec with a bias to sell more campaigns and here is the most important part, any agency proposal has to be percolated up the org chart until it reaches the eyes and ears of the CEO. i.e. The marcom point of contact still has to clear his bosses before it reaches the CMO. The compromises along the way just to get in front of the key decision maker is often staggering. Agencies are also notoriously high on vision but weak on operational and financial knowledge, two dialects that are the language of CEOs. Consultancies speak spreadsheets and that gets the CEOs attention.
2-Consultancies do not ‘run for the hills’ when it comes to the ‘dirty and gritty’ part of the business. They know there’s no money to be made in this ‘red ocean’. So they choose not to compete. Instead, they are glad to let dumb networks drop their pants in a race to the bottom to secure the advertising business.
Remember, consultancies have already been well paid for their services upstream. They are too happy to let the agencies scramble for the single digit margins that come with the daily grind.
3: And if consultancies need to support their recommendations with pretty pictures, smart copy and emotional videos, they simply hire senior creatives just for that. I have known very experienced and senior creatives who have been ‘displaced/ fed up/replaced/resigned’ from network agencies because they didn’t win their share of scam awards. They have been approached to work on these ‘illustrative’ campaigns. Believe me, there is a glut of experienced and bitter creatives out there who won’t reject a gig from a consultancy who pays more, better and on time. The only creatives who won’t want to work with them are the award hungry scam artists who populate the creative departments of most network agencies. Then again, they don’t fit the casting brief which consultancies want. So, it’s not a problem.
4: Here’s the kicker, even if the C-suite buys into whatever the agency proposes, I bet you the recommendations may result in a short term campaign but a medium term engagement with consultancies to verify further changes or a pitch to shop for competing creative executions of the new strategy.
We are moving in new paradigms and fooling yourself that it’s not a problem or quoting 15 year old anecdotes or outdated factoids in an echo chamber is just more evidence of group denial.
To be clear, agencies will not die. But they need to evolve. And it begins with having leaders who are less complacent and smarter.
ReplyI can nit pick with the Truth bombs comments but can’t argue with the fundamentals. From what I have experienced the consultancies (in the main) aren’t trying to get into marketing campaign work but the strategy, analysis and customer experience part that informs and shapes it – particularly where it crosses paths with technology.
ReplyAgree.
Agencies will never die, but they need to change (smarten up). Arrogance is not going to help them (re “run for the hills”). Teaching their suits and strategists about the things that matter for a company and they way they measure the success of their leaders internally will, so perhaps finally they can connect their work and strategies also with that of the business. There are many brilliant people in agencies, but often there is little thought about the actual business they are trying to approach (vs just a campaign) from a senior to junior level.
Watching the evolution with great interest from the sidelines.
ReplyNot surprising to see these same old agency faces saying everything is fine. But quite painful to watch.
The idea that agencies can compete with consultancies on a strategic level is fanciful. See the comments above on what strategy really means to clients (clue: not ads). Ogilvy has been trying for years. How’s that been going David?
Most annoying was the regurgitation that creatives don’t want to work at consultancies. Sure, maybe not the traditional agency ‘creatives’, but again, this is a straw man, because that is not the type of creatives that consultancies or the C-suite are looking to engage with.
Well done to Josh Black for not allowing the panel to turn completely into another conference echo chamber. Would also have been nice for a consultancy to be invited.
ReplyGood creatives will work with anyone who has a problem to solve, as long as they don’t try to rip them off and pay on time. The scammers who populate the top levels of the agencies would not even begin to fathom what a consultancy job is all about since their way of doing things is to have an idea first and then look for a client to attach it to.
ReplyThe old-dogs of Asian networks are way out of touch. They want to enter the Data Game and have the audacity to slate consultancies on their ability to bring information into market.
We all know the old-media-money model is broke. Instead of trying to be everything and anything to everyone, why not use the creativity on your own walls to create a new definitive positioning and model. Your faffing actions now tell everyone you are lost.
Look at Droga and their Entertainment Partnerships, Anomaly and their Intellectual Property offering, Red bull and their Online Media revenue.
The shareholders of these networks are laughing at you trying to make your margins, with a broken model. The irony is you need a consultant to point you the right way.
ReplyLively session and lots to reflect on after the dust settled. One area we could certainly do much better is how we sell and package what we do – not everything is good but we do have some really smart people doing solid stuff but we just are not that great at productising (is that even a word), packaging or selling it. We also give far too much away for free or Kitts return. The fact that we are, generally as an industry, paid as much for award winning work as work that bombs has never made sense to me. We need to evolve, change and continue to deliver value. Looking forward to embracing what’s next.
ReplyGreat article topic and all the comments are so insightful. Thanks Truth bomb. Would love to learn more. So what should a creative do and how prepare to migrate over.
Reply@ Brian
ReplyLet’s assume you are a creative in a network agency.
First, don’t play the scam game. Stop it immediately.
Volunteer for the tough jobs and make a reputation nailing them: new business pitches, trade videos, B2B comms, corporate websites, annual reports etc.
This will get you FaceTime with senior clients .
Stop following ad websites and start reading up on industry reports, and business magazines of the industry your clients are in.
Read their annual reports. (Buy a few shares of their stock and they’ll send it to you for free) Visit their websites. Learn to see the world through their eyes. Know their business problems as well as they do. Speak their language.
Lastly , quit networking only with fellow creatives. Make friends with the smarter suits and planners in your agency.
Make friends with contacts in consultancies like Hay, PWC, KPMG etc.
If you went to school with them, renew old ties.
It sounds difficult but it really isn’t.
Good luck!
Agencies and Consults are both in the business of selling time (billable hours)
Consults sell time of folks who are relatively smarter, more senior and more strategic.
Agencies sell time of folks who are relatively junior, (more) stretched, and more operational.
The entire ‘model’ of how ‘ideas’ are generated is broken. It is silly to have ‘specialist’ idea generators. A lot of times that results in ‘ideas’ that solve no business problem.
Consults have begun hiring from agencies (therefore will change / adapt faster) but there is hardly any traffic the other way round – so the status quo continues on the agency side.
ReplyName one brand that has been created by a consultant….and I mean a consultant like PWC, KPMG etc.
Reply@rest my case – how about first you show how that would in any way be relevant to the debate.
ReplyCant think of any brands created by a Consultant? Thats because they havent created any.
I cant fault the consultancy people on their impressive academic, strategic and analytical skills but creating brands is about moving people….they can hire all the creatives they want but until they show a willingness to accommodate these softer, fuzzier skills of influencing peoples behaviour, they’ll just be boring consumers to death with factual, rational messages.
ReplyNo, I am asking why you are posing what seems to be a straw man question. Nobody in the session or in comments above has said that consultancies either create brands or desire to create brands in the future, so why should there need to be evidence of them doing this? That isn’t where the challenge to creative agencies lies.
ReplyThe article is about consultancies’ deficiencies/reluctance/lack of resources towards executing creative ideas….so just building on that….and offering reasons for why that might be happening…do you mind? Are you the moderator here? Or maybe a consultant?
Reply@Rest my case
ReplyThe point made earlier is that consults have no interest in building brands.
They are happy taking on the higher margin consultancy and strategic projects. And happy to leave the grunt work to ad agencies to duke it out.
I have seen consultancies walk away with six-figure fees (or 50% of the budget) in exchange for a powerpoint showing a bare bones brand architecture.
Leaving the agency with the same amount to create campaigns to deliver across a huge of channels.
To add insult to injury, the consults are re-invited to make up part of the evaluation committee at the agency pitch.
Still think consults pose no threat?
They suck up the money and time agencies need to build brands.
Im more inclined to agree with you truth bomb….so if the big consultancies arent interested in the creative execution part, what are all the ad people quoted in the article going on about….they seem to be mistakng disinterest for lack of capability.
Frim my limited exposure to consultants they might be the most left brained folks ive worked with….clients must love them.
Reply“Nobody in the session or in comments above has said that consultancies either create brands or desire to create brands in the future, so why should there need to be evidence of them doing this?”
Then why even bring up the question of whether creatives want to or don’t want to work in consultancies?
Reply@18 – I don’t know. It wasn’t my question. But I guess it the difference between creating brands (which the precious poster got all excited about) and servicing brands.
ReplyHave your say