What’s agencies’ loss is consultancies’ gain.
Consultancies like Accenture Interactive, PwC and Deloitte Digital are all making one core tenet part of their pitch to marketers: If you want to take back more marketing in-house, we’ll help you do it. They’re buoyed by a stronger relationship that goes beyond the chief marketing officer and an overall perception that they’re objective partners, not simply vendors — putting them in a good position to remain top of mind for advertisers even as agencies can’t.
For example, an Accenture Interactive rep said inside the company’s newly launched Programmatic Services division, one of the core competencies is “in-housing,” which includes helping advertisers take back control of their media capabilities — building programmatic strategies, in-sourcing technology, changing operational models and creating internal capabilities.
Accenture is working with companies including HP and Radisson Hotel Group. For Radisson, it was a way to take back control of the customer journey from third-party partners — and feel comfortable that it would deliver what it wanted.
Antonio Lucio, HP’s chief marketing officer, has been a loud voice calling for a serious internal cleanup of capabilities as part of an overall mission to take back control. Most of this, said Lucio, is driven by a change in mindset that the brand, not the agency, controls and must take ultimate responsibility for the customer. “To do marketing today … you need deep analytics and insight capabilities, creative content, programmatic buying capabilities. As a client, you have to build internal capabilities in four or five of those areas,” he said on Digiday’s Starting Out podcast earlier this month.
“The consultancies’ most relevant strengths in this case are organizational structuring or restructuring and digital transformation,” said Ann Billock, partner at Ark Advisors. “If companies take, say, programmatic, content or digital and production inside, the consultancies — with their C-level connections — can be called in from the top to help structure the organization and processes of the newly in-housed functions.”
The interesting question for the industry is this, said Billock: “Do the consultancies come in before the decisions to in-house are made, or are they parties to those decisions from the outset?”
One agency executive who didn’t want to be named because he is entertaining a job offer from a consultancy said it’s mostly the latter: Consultancies are buoyed by louder calls for transparency and control from advertisers and riding the wave of the bombshell Association of National Advertisers report from 2016 that alleged widespread issues in the agency business, plus ongoing issues of fraud in the digital advertising ecosystem.
Much of the pitch was on display at the Cannes Lions festival last week. At Deloitte Digital, which took over a suite at the top of the Majestic hotel, the talking points were clear: We’re not here to displace agencies, but we are here to service the CMO. “The message is: So, we’re here to optimize for the brands. We’re helping brands own capability sets like in-housing. We’re helping the ecosystem at large,” said Todd Paris, managing director at Deloitte Digital.
Deloitte Digital helps clients do more things in-house, including customer and audience data, augmented reality, media buying and event execution. Deloitte Digital CMO Alicia Hatch said this puts consultancies in a stronger position than agencies.
“Helping a client in-house marketing capabilities isn’t just about putting teams under one roof,” she said. “In-housing is a strategic business decision that can ultimately impact a company’s bottom line. We are able to help clients decide if in-housing is the right decision for them, identify the right technologies and talent, and undergo significant organizational restructuring to ensure in-housing efforts are successful and sustainable.”
Paris agreed that consultancies like Deloitte aren’t here to necessarily take on the role of agencies. But, he said, there has been a marked shift in companies realizing they need to control the customer experience.
“From an opportunity perspective, brands and CMOs understand now that ‘I’m the owner and the owner of the data, and of the customer experience,’” said Paris.
Bill Duggan, svp at the ANA, said he expects about 65 percent of marketers to say they’ve taken some part of marketing capabilities in-house in the next release of a survey it does on the topic. In-house is attractive to companies because of cost and speed as well as transparency.
“Unlike agencies, consultants are more used to one-off projects,” said Duggan. “When it comes to helping brands figure out in-house capabilities, for example, they’re in a better place. Plus, they have their ear all the way up to the CEO or CFO, not just the CMO. They’re stronger in that way.”
Marketing services is also just one thing that consultancies do. They already count major marketers in their parent companies’ client bases, helping them sort out business processes, from technology to auditing to risk to even helping pick partners and manage agency review processes. That means they’re already often part of advertisers’ expenditure — putting them in a good position to take on projects like building internal programmatic capabilities, for example.
Paul Marcum, co-founder at Big Finish Digital and the former president at Truffle Pig, said consultancies often win because brands see them as being more “objective” and results-oriented. That means a chief financial officer can get behind a CMO’s decision to use them. “And all of the key components to in-housing, like IT, systems integration, workflow optimization, training are core competencies for consultants,” said Marcum, who is making it a point to provide more of a services model at his agency and recognizing that a shift must happen to compete in this new mode of working.
Consultancies, to brands at least, place a higher premium on business analytics and return on investment, as well as data. So, whether a marketer wants to just understand more about what’s happening with their spending or take back control of some of it, consultancies are seen as more trusted and capable of doing that, said Marcum.
Dan Salzman, global head of media at HP, told Digiday that even though HP is focusing on building internal capabilities, agencies remain important to HP, especially in creative. “We believe that deep creative capabilities will always sit outside of brands,” he said. “And that this is not a strength of today’s consulting firms. So, we are asking our agencies to return to their roots and invest deeply in creative.”
“We want to make sure we’re free to optimize for the brands,” said Paris. “Our incentives are directly aligned with the CMOs’. We can listen and work in the marketing organization.”