Consultants moving in on agency business

Sarah Homewood
By Sarah Homewood | 7 May 2015

Top-tier management firms are making stealth-like moves to steal strategy work from hard-pressed agencies.

Businesses such as Deloitte, PwC, BCG and McKinsey’s are pitching against agencies for strategy work and “cutting their lunches”, however some top agency bosses accept the competition and concede they have something to learn from their non-traditional competitors.

CEO of Droga5 Sydney, Sudeep Gohil, told AdNews: “Management consultants are very good at providing the kind of rigour and knowledge and reassurance that agencies can’t provide the C-suite clients.”

Konrad Spilva, Isobar’s CEO, told AdNews that management consultants have been pushing into the space aggressively, with Accenture finalising its purchase of digital agency Reactive in February. However, he said that while traditional consultants are “a safe bet”, agencies have more of an ability to pivot to fit a client’s needs.

“We compete with [management consultants] but we come from a very different place, and we come more from a creative background. We’re all technologists,” he said.

“They’ve got a reputation – but we’re much more nimble. We have this relentless desire to test and learn what we do. We’ve built that rigour into our business.”

Gohil explained that no CEO ever got fired for bringing in management consultants, however a bad ad could turn a business off and see an agency get the boot, so agencies need to fight to be asking questions rather than just taking briefs.

“That’s the big difference, on a macro level, of what we do and what management consultants do. The more we push into the space where we’re asking questions – rather than answering questions – the better it is for the industry overall,” he said.

“As agency people we have to earn the right to ask questions because it feels like we get told: ‘I want you to do this’ and the ‘this’ is often a TV spot. We get given instructions about how to make something and we don’t get to ask questions.”

Spilva said that as a digital agency Isobar has been going up against consultancy businesses for some time, but their presence is continuing to ramp up.

“Every week or two we’re competing against Deloitte, Accenture, PwC and BCG. More around these digital transformation briefs and organisational redesign briefs. Some are our existing clients and some are new business opportunities,” he said.

With this rise in competition Gohil explained that agencies need to search for different solutions because, just as the landscape changes, the solutions themselves need to change to solve the new problems coming down the line.

“The solution isn’t going to come from the same space as it did even 18 months ago, so the future has to change dramatically, and if we’re going to evolve as agencies in general then we have to push hard to ask the right questions.”

A version of this story appeared in the latest issue of AdNews Magazine (1 May). Subscribe to AdNews in Print, or get it on iPad.

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