Last month, in New York City’s Soho neighborhood, global strategic consulting firm Accenture did something that might surprise you: It opened a 10,000-square-foot content studio. The goal? To develop advertising and marketing creative for its clients.
Accenture’s content studio includes a 3,500-square-foot post-production facility where the firm has the ability to cut and edit anything from a 30-second Facebook video to a Super Bowl spot. And there are six more studios in the works.
The move is the latest in a string of developments that are pitting consultancies against agencies, and the conflict threatens to change the landscape of the advertising world.
In the past, consultancies focused on providing industry-specific business and management advice to brand clients. Now, thanks to an opening created by the digital disruption of advertising, they’ve created studios and digital agency arms meant to attract business that traditionally went to advertising agencies.
How big are digital agencies born of strategic consultancy firms? Research firm and online resource Econsultancy ranked digital agencies based on their earnings for its “Top 100 Digital Agencies” report. Of the top five agencies, three—IBM iX, Accenture Interactive, and Deloitte Digital UK—are subsidiaries of consultancies.
Plenty of the services offered by consultancy agencies are also offered by traditional ad agencies: marketing management, branding strategy, ad and content development, media planning, and so on. What consultancy agencies like Accenture Interactive and Deloitte Digital claim is that they have advantages ad agencies simply can’t match, like vertical experts, global consumer insight, the manpower to produce thousands of pieces of content, and—because of their existing consulting relationships—a better understanding of how digital marketing can fit into an overall business strategy.
In other words, consultancy agencies are leveraging their relationship with their larger consultancy parent companies for an edge.
Meanwhile, ad agencies find themselves under assault by publisher agencies and major tech platforms, and the agency-of-record (AOR) model on which agency–marketer relationships have long been built—whereby companies assign their creative work to a single agency—appears to be waning.
In recent years, Mondelez, Best Buy, and Frito-Lay have all moved away from AORs to instead work with multiple specialized shops. At last year’s Association of National Advertisers’ Masters of Marketing event, the president of PepsiCo’s global beverage group warned that “the agency model is not going to bend—it’s going to break.”
Are consultancy agencies, with their cross-business acumen and resources, poised to disrupt an industry that dates back centuries? “There is no doubt that traditional agencies are feeling the heat,” said Susan Borst, senior director of industry initiatives with the Interactive Advertising Bureau (IAB). “This is definitely an interesting time in ad land.”
How media’s transformation transformed consultancies
Accenture’s shift toward digital content marketing began several years ago, with the launch of Accenture Digital in 2013. The company acquired London-based design firm Fjord in 2013, followed by Austin-based creative studio Chaotic Moon last year.
Accenture was being asked to “step into the creative space,” said Donna Tuths, Accenture Interactive’s managing director and global head of digital content. The thinking was that if Accenture already handled companies’ business strategy and intelligence, technology, infrastructure, and cloud computing needs, why not take on digital marketing, mobility, and analytics, too?
At the same time, clients were increasingly “decoupling” their advertising production, meaning that they transferred video duties away from their agencies to work with production and post-production companies directly. That created an opportunity for Accenture to swoop in with a full-service digital offering.
Accenture Interactive (part of Accenture Digital) categorizes its services as experience, marketing, commerce, and content, with content being the largest.
“I see many of these things as no longer being the domain of agencies,” said Tuths, who worked with such agencies as Ogilvy and Organic prior to joining Accenture. “In a virtual world, you are your content. … Consumers have begun to understand that, while many companies are just beginning to.”
What’s more, she said, “They’re starting to see the folly in trusting their brands to short-term, campaign-driven partners.”
The move from a campaign mindset to an always-on mentality factored into the growth and success of strategic consultancy agency Deloitte Digital, which launched in 2012, as well. Alan Schulman, national director of brand creative and content marketing for Deloitte Digital, spent much of the last two decades making TV campaigns and accompanying digital content for major agencies. But he believes that approach is on its way out.
“You can’t just go from campaign to campaign anymore,” Schulman said, referring to the way many brands work with agencies on a project by project basis. “We’re now living in a time when consumers can turn your brand on or off 24/7, 365 days, so you better have stuff out there.”
But Denise Blasevick, CEO of advertising and public relations agency The S3 Agency in New Jersey, says there’s still a place for campaigns in the modern marketing world.
“For brand-driven organizations, I see the right mix as combining carefully pulsed content with appropriate punches of campaign advertising,” she explained. “That mix of strategic planning and creative execution remains the stronghold of traditional agencies.”
Some in the agency world also maintain that consultancies simply can’t match the creative power and experience of ad agencies. “Our business is—at the core—about ideas,” said Laurent Ezekiel, managing director of the New York region and global client services director with DigitasLBi. “And while our business has evolved and we live in an era of fragmentation, the alchemy of creativity and technology is where the magic happens for brands.”
Ezekiel added that DigitasLBi, which is owned by multinational advertising company Publicis Groupe and ranked seventh on Econsultancy’s top agency list, has the benefit of experience. “Since we, the agencies, have been in the creative business for several generations,” she said, “clients will continue to engage with us to help evolve their brands.”
The C-suite access advantage
Schulman has been “mightily impressed” with what he’s seen at Deloitte Digital since joining just over a year ago. That includes having direct access to decision makers on the brand client side, an advantage ad agencies have a difficult time matching.
“Consultancies are already pretty embedded in the C-suite, so it makes sense to start from strategy first and go from there to content,” Schulman said, noting that all strategic directives come from Deloitte Consulting’s Strategy & Operations group, while Deloitte Digital provides the copywriting, art direction, user experience, experiential design, and customer experience know-how.
Bridging the gap between content and business operations, he said, helps Deloitte Digital ensure that it’s not just making buzz-worthy creative, but meeting its clients’ overall and long-term goals.
For agencies of all kinds, however, a challenge remains: convincing chief financial officers (CFOs) of the critical importance of content. Digital content can be slow to deliver a return on investment. According to the Content Marketing Institute, it can take upwards of 15 months to monetize a content marketing program. That can make it a tough sell. The Content Marketing Institute also reports that only 30 percent of B2B marketers believe their organizations are effective at content marketing, while just 37 percent of B2C marketers say their content marketing is “sophisticated or mature.”
“There’s the tech, plumbing layer of marketing, and there’s the poetry, creative layer,” Schulman explained. “Getting big organizations to think of these together and switch from a campaign structure to content marketing is not easy.”
Deloitte Digital offers workshops and education tools around ideation, workflow process, and implementing creative to its C-suite customers with the aim of getting them on board for the long haul.
Schulman adds that CFOs “glaze over pretty quickly” when agencies talk about likes and shares. “They want to know you were able to move the brand, advocacy, commercial results, or engagement from X to Y,” he said.
When a firm already has a CFO’s ear—as is the case with Deloitte’s clients, which already use the company for strategy and business operations advice—it stands to reason that it has an edge over traditional agencies, which tend to work primarily with heads of marketing.
Cross-industry capability, global strength
Most of today’s digital agencies are either boutique shops or offshoots of multinational advertising networks. Deloitte and Accenture believe that what they can offer in terms of consumer insight and industry expertise outstrips both of these models.
“In my agency career I never encountered such a depth of vertical industry expertise and research as what we have at Deloitte,” Schulman said. “As a former agency person, it’s refreshing to be getting the kind of access that I have now.”
Deloitte Digital, which has six offices in the U.S. and 33 abroad, boasts experts in consumer and industrial products, energy and resources, federal, financial services, life sciences and healthcare, public sector, technology, media, and telecom.
“That enables me as head of the content group to reach out and staff someone from a vertical industry who’s really steeped in what’s going on,” Schulman said. That expert then works in tandem with content strategy and content creation to form a “very purpose-built team.”
Accenture, meanwhile, has about 5,000 employees working in the content space, spanning about 20 locations around the globe. “We operate some of the largest content operations in the world,” Tuths said. “Even big agencies just are not able to house the same range of technical skills or attract the same level of talent.”
As an example, Tuths pointed to one of her retail clients, whom she opted not to name in order to protect its marketing strategy. The company offers monthly subscriptions to a box of curated products. For every box, the brand has been creating four how-to videos, but it will soon be adding both more boxes and more products, so its needs for instructional videos are becoming increasingly complex.
“Honestly, these types of challenges are not really for your creative agency,” she said, pointing out that many agencies outsource their video work. “We take a much more strategic and long-term approach to the content space. It’s about today, but more about tomorrow and helping our clients navigate the space and grow.”
DigitasLBi’s Ezekiel countered that agencies have evolved more than some think.
“Honestly, six or seven years ago we were not set up in a way [that] our markets could benefit from each other’s knowledge, and this is because there was no pressure on the demand side,” he said. “Essentially, we didn’t have enough global clients ‘stitching’ the network together.”
That has since changed, largely through the growth of the agency’s global client base. “It’s through these global clients, who represent over 35 percent of our revenues today, that we have developed a clear process and toolkit for multi-market engagements.”
And the winner is?
Last year, media research firm PQ Media reported that by the year 2019, U.S. brands will be spending upwards of $300 billion per year on content marketing. Will they opt to stick with the agencies they know, or will they jump ship to new competitors like consultancies? Or will they opt for a third route and increasingly bring content marketing in-house with the help of freelancers and content marketing technology solutions, as companies like Coca-Cola and Cisco have done?
We know where consultancies are placing their bets—so how do agencies view these new competitors?
“I think both types of companies have their unique skills, experience, and heritage,” Ezekiel said. “The digital creative agencies will always put ideas first and therefore are set apart from the consultancies. The consultancies have a strong respected heritage in business consulting. The convergence of these two is where the future lies, but we believe that the brands that focus on ideas and their reasons to exist will prevail.”
“I would argue that brand-driven companies will win with traditional agencies,” said Denise Blasevick of The S3 Agency. “The content [we] create is driven by the brand and not the channel. I have never heard a single person complain that there is a shortage of content out there. The opposite is true. People are feeling overwhelmed by content—and because of that, they are tuning out if it isn’t on-brand.”
According to the IAB’s Susan Borst, the spoils will belong to the firms that best grasp advertising’s technological transformation and the “radically new way of thinking about creative and messaging” that it requires.
“Those who crack the digital and mobile nut with clients that understand and embrace the need for fundamental change,” she said, “will win in the long-term.”