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Agencies tackle the consultancy test

News, 17 October 2016

LONDON: The steady incursion of management consultancies into the ad agency space, a trend accelerated by the rise of digital technology, has raised concerns among some advertising practitioners about their future.

Others remain more upbeat, seeing the long-standing relationships between agencies and clients as a distinct advantage alongside the creative skills that mark them out from the more technical approach of management consultancies.

This growing convergence between management consultancy firms and the advertising industry is an issue covered by The Drum, which spoke to leading executives from both sides of the professional divide.

The Drum feature was also prompted by an Advertising Age report earlier this year, which revealed the true extent to which the agency landscape is changing.

According to its Agency Report 2016, Ad Age said only one of the world's five largest digital agency networks is now owned by an established agency company – WPP's Wunderman – and it ranked Accenture Interactive as the biggest digital agency network in the world.

"The whole world is becoming more complex. It's changing quicker than brands and companies can deal with," explained Anatoly Roytman, MD of EALA at Accenture Interactive.

"Marketing existed in the way it is now for many years, primarily focused on advertising and now it is undergoing significant change. The name of the game is customer experience and it's now about much more than advertising, it's about how services are provided and marketing functions are having to think well beyond ads."

Scott Brinker of Chiefmartec.com added that management consulting firms have an advantage in having the ears of key decision makers when it comes to helping companies with their digital challenges.

"As part of the digital transformation, companies need to be able to iterate way quicker than before, meaning it makes less sense to outsource all the creative work to an agency," he said.

"Developing creative capabilities in-house has become a priority and, for many, management consultants are helping make that happen."

But other observers painted a more positive picture about the future for ad agencies, particularly those in the creative disciplines.

"Now more than ever, there's a place for creative agencies. We have reams of data available to us every second of every day that we can hand over to creative agencies to inform their strategies," said Danny Hopwood, VP Solutions and Platform Operations at Publicis Media.

"They can monitor everything: from the way their site's performing, or different sized units are working, which could lead to the creation of new creative formats that we've never seen before," he added. "There's a sweet spot for everyone in this equation as long as everyone stays co-ordinated and works together."

As the managing consultants and advertisers set out their strengths, a third option for consideration came from Tatyana Ayrapetova, Senior Partner at Adobe, who suggested the distinction between the two will cease to exist.

"Even the term agency is going to change, I don't know what we will call them in the future," she said. "What I do see is that these new entities will have to be high performance orchestras, they will need to be flexible and agile, forming teams and creating flexible solutions that look very different for different clients."

Data sourced from The Drum, Advertising Age; additional content by Warc staff