In the late nineties, firms such as Deloitte, Boston Consulting Group, McKinsey, PwC and others were very much respected for their brainpower. As a fresh graduate back then, I was in awe of my friends who were accepted to these fine establishments. My friends often shared stories of their assignments using code names for clients who wished to remain confidential. My friends described how they would swoop in to save large corporations in mid-crisis, pinpoint problems and advise these corporate machines on how to tackle them. All too impressive. Consulting firms were big guns brought in to save the day.
I had decided to join an advertising agency instead. In my own way I’d like to think I too was solving business problems, with some creativity thrown-in. If the work was done right it could change behaviour, create new/positive perceptions, affect culture and transform the fortunes of businesses.
To be honest, I cannot say exactly and unequivocally what advertising delivers to the bottom line, except as a form of ‘cost’ and through some measure, brand value attributed from consumer awareness. In an advertising agency, the core focus still lies in implementation. Pure operations; focused on the delivery and executing parts of the client’s marketing programmes – be it supplying a creative idea, a TV-storyboard or a media plan. For that reason, the toughest challenge in my work has always been the inability to get close enough to the boardroom to ask the right questions.
With the convergence of marketing and technology in recent times, client issues have become more complex and strategic issues rely on other business areas such as IT, digital and finance.
As such, consulting firms are moving down into implementation and operations, extending into marketing as marketing itself becomes more facilitated by data and IT, while advertising agencies are hoping to move up into the loftier realms of strategy – each encroaching on another’s space.
Nonetheless, the role of consulting firms have potential to grow stronger as ROI has become a significant KPI for CEOs, boards, investors, shareholders and stakeholders, many whom tend to be risk adverse. In such conditions, procurement and finance often take the lead and consulting firms are more comfortable having these numbers-based discussions than their advertising agency ‘rivals’.
Many advertising agencies today are also no longer connected at the CEO level. In my observation, most senior executives in an agency often work with mid-level marketers who sometimes lack accountability and sight of the top-table agenda. A creative brain-power too may not necessarily be a good business (wo)man. The skill set required to own board-level relationships are fundamentally very different to owning conversations around tactical media and marketing-based executions. If creative thinkers want to be heard at Board level, they must redefine creativity as a serious business tool, otherwise it will always be seen as a production of ‘something’, wielded by media planners and poorly trained clients.
On the other hand, over many years, consulting firms have built a credible reputation offering strategic advice which have more sway with Boards. They ask the hard questions and dig deep to understand issues that prevent C-suites from sleeping at night – positioning themselves as trusted advisors. Once these firms have a foot in the corporate door, they may pick up business for practical reasons having built a broad view of the client’s business and its strategic challenges. With this access and ability to operate at senior levels, they already speak the language of the ‘C’ suite.
As the two industries blur and converge, on thing is for sure: a new battlefield is drawn. M&As on both sides will grow more aggressive, each finding their own complementing products and services. While commercialising innovation is not new, this intense competitive landscape will be a wake-up call to both parties.
Advertising agencies had never taken the opportunity since the late 20th century to differentiate themselves from competition via high-value strategic services. It is only now Adland’s cosy world has been seriously shaken. Agencies will need to quickly transform their silo-ed business platforms each selling proprietary products to their clients, to be able to sell competitive products and solutions. Clients today do not necessarily want to see products manufactured by the agency, but demand the best and are entitled to the best offering.
Global advertising agency networks will also need to review their organisational structures in order to form and deploy viable teams quickly. Freeing up knowledge and expertise is still a massive challenge and in its current form, agency teams still have no access to the sum knowledge of the whole agency. Many times, agencies are still bad at learning, sharing and collaborating across their network.
Whereas, consulting firms entering this fast-paced and commoditised environment will heavily test their legacy business models to continue to be paid lucratively. They too will need to evolve and require a supportive ecosystem in order to hire creative people. Due to the rigorous focus on the thought process and problem solving, consulting firms may find it hard to evaluate the creative skill set and channel pure play creative people effectively once they’re hired into these establishments.
Whatever the future holds, the party with the most opportunity to win is one who recognises that it is not enough to be marketing experts, but become business experts. Creative and data must be partners, not foes. Competitive advantage will be determined by who is most agile and can adapt fast to create great work at the speed of the marketplace at an efficient cost.