Customer centric marketing is fueling agency and consultancy collision

Publicis’ admission that growing competition from consultancies in the marketing space fuelled its $3.7bn capture of Sapient reflects marketers’ growing need for technical expertise amid mounting pressure to shift from creative-led campaigns to ROI driven ones

Marketers are picking consultancies over agencies to adapt to the changing media consumption habits of consumers.
Marketers are picking consultancies over agencies to adapt to the changing media consumption habits of consumers.

The rise of consultancies in the rapidly changing marketing space is posing a conundrum for the big agency groups. Companies such as Accenture and Deloitte are now more firmly camped in the marketing field, exploiting their operational expertise to adapt to the evolving strategic demands of marketers.

It is a shift costing agencies accounts and forcing them to bet bigger on their own consultancy-centred strategies. Whether it’s advising on cutting ineffective marketing costs or implementing a data strategy, these are areas agencies don’t typically understand but increasingly find their clients expecting them to be involved in.

The agency and consultancy collision

Maurice Levy, chief executive of Publicis, told analysts on a conference call for the Sapient deal that “[Consultancies] are entering our territory with some offerings that are respectable”.

“The new world is much more complicated than the former world and we have to prepare for that world. We believe the addition of Sapient will help us to move forward at the much higher speed of what we do today and bring together clients’ total solutions.”

Brands have struggled to craft the seamless customer experiences needed to prosper in the “new world”. But the emergence of customer-centric and technologist roles across the c-suite over the last 18 months suggests some companies are stockpiling the marketing arsenal key to survival.

Those businesses believe marketing cannot function in a vacuum and are employing management consultancies to better align the discipline with the wider company. Mondelez, McDonald’s, Nissan and British Gas have all sought out alternative marketing service providers since the turn of the year to demonstrate the value an integrated marketing strategy can bring to the business.

A spokeswoman for Mondelez says: “We’re looking at our agency engagement in a very different way, partnering with a whole new range of creative partners from smaller agencies to start-ups to the traditional agency-of-record.”

Nissan hired DigitasLBI in February to develop the websites for its brands worldwide after considering both Accenture and Deloitte. The car maker, like Mondelez, is pushing its agency partners to be more focused on building strategies and customer experiences, instead of actual production and execution.

It is a similar mindset that convinced British Gas to employ marketing consultancy the Intelligent Marketing Institute. The energy provider has spent the bulk of 2013 mapping the customer journey across all its communications channels to lift sales after it lost about 362,000 customers in 2013.

Moving forward, the framework will support the supplier’s main marketing campaign for 2015, spanning services such as its new billing system alongside grounding more activity in data.

The battle to provide long-term value to brands

Publics’ multi-billion acquisition of Sapient is part of a wider rearguard action that has seen agency networks focus their acquisitions on specialist service providers over the past two years instead of traditional creative shops. In March, WPP secured a majority stake in multi-channel experts Cognifide and highlighted at the time the company’s ability to deliver “personalised communications across all channels and touch-points”.

However, industry observers say senior marketers are increasingly dissatisfied with working with different specialists within one group and would rather one expert capable of connecting the different channels.

Scott Mclean, co-founder of the Intelligent Marketing Institute, says: “Maurice Levy is creating a notion of territory but I don’t think creative marketing agencies really understand how the world of marketing is changing.

“There is the increasingly new territory of commercial marketing and no one seems to have got to grips with that just yet. So rather than thinking of it as territories, it should be seen as a classic Perfect Storm of creative, technical and commercial marketing. The reality is that all the major players are going to want to head for the centre of that storm and develop capabilities in all three camps. Why? Because that is what their clients need as the business requirements of marketing evolve.”

Interestingly, online media owners such as Twitter and Facebook are also making a grab for the domain of digital agencies as they look to win more budgets from traditional channels. While lacking the business sensibilities of management consultancies and the branding instincts of agencies, the online firms are wooing advertisers with the promise of broader ad technology offerings.

The drive towards customer-centricity

The winners will be those consultancies and agencies that are able to make their voice heard at the top table of businesses, claims Accenture.

Glen Hartman, global managing director of digital transformation for Accenture‘s integrated digital offering Accenture Interactive, says: “Companies have been talking about customer centricity forever but with the emergence of roles like the chief data officer and the chief customer officer they finally have someone internally who can work across divisions and truly break down those silos.

“They now need a new type of service provider that can help create an integrated strategy that will impact sales and market share.  We’re not going to start filming Super Bowl commercials but we are competing with agencies more on pitches. The lines will continue to blur but there’s still room for collaboration between both sectors.”

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