Management consultants are taking over the space once occupied by agencies and delivering strategies designed for a digital world
Who do you trust to advise you on your digital strategy? Eight years ago, this was apparently the question that Accenture was most often asked about interactive media. Since then, it has only grown in importance as those media have become increasingly critical to business success.
In the early part of this decade, the issue was part of the question of media neutrality. The concern was that if you asked how much money you should spend in any particular channel, the answer would depend on what the person you were asking was trying to sell you, whether that was a TV campaign or a shelf wobbler. And interactive media was exactly the same, with specialist agencies competing to extol the benefits of the various digital channels from email to SMS.
At the same time, as interactive media has moved from being something brands experimented with using the leftovers from their TV budget into something that is vital to the business, the role of digital strategy adviser has been much fought over.
This has been one of the constant threads in New Media Age’s guide to the Top 100 Interactive Agencies over the years, with the story going like this. The big above-the-line advertising agencies have insisted that as brand guardians, they should control all aspects of strategy. The media agencies have argued that their neutrality and understanding of audiences make them ideally placed to give strategic advice. And digital agencies have slowly pushed their way up the pecking order until, in last year’s guide, many said they felt they were finally taking their place at the top table as strategic advisers.
But in the past 12 months, two things have happened. The first is that the rise of social media has brought PR agencies into the battle for the strategic space. They claim that because what matters now are the conversations brands have with their customers, and because PR is all about conversations, they should have a strategic role. As one digital agency head said to me while I was researching this year’s Top 100, it’s an impressively fast turnaround for what has always been seen as a very conservative industry.
The second change, which I actually found more surprising, was that the progress of the digital agencies towards the strategic role seems to have stalled, at a time when the economy is pushing more money into digital media than ever before. Instead, the story in this year’s Top 100 (which was published at the end of last month) was all about the resurgence of the big above-the-line agencies.
This is very much tied into the issue of integration. Don Elgie, head of agency group Creston, summed up the prevailing mood by saying: “If pure-play digital agencies don’t believe they need to learn offline skills, they won’t be around in five years.” And throughout the industry the term digital is quietly being dropped as clients and agencies recognise the importance of integrating on and offline channels.
Marketers are often some way ahead of their agencies in this, although a company’s place on the integration scale depends very much on the sector it’s in. An airline, for example, is much more likely to be thinking about integration than a mining company. Even so, an ever-growing number of companies have been reintegrating their digital marketing departments back into their overall marketing function in the past two years. And linked to this change is an increased emphasis on integration among agencies.
So if, as I was told by the head of an above-the-line agency, it’s not about having a digital strategy, it’s about having a strategy for a digital world.
So, who are clients looking towards to help them with that strategy? There’s little here that could be described as a pattern, although there are some trends. There’s a general sense of clients wanting fewer agency relationships, no doubt driven by the desire for efficiency, but also that certain areas, such as natural search, are still enough of a specialist area to break that model. More importantly, no one type of agency has yet produced a completely convincing offering. The creative agencies lack skills in data; PR agencies’ abilities can be questioned in marcoms strategy and tone-of-voice; media agencies can be seen as less than neutral because of a business model that requires them to buy and sell media; digital agencies have yet to really prove themselves in the offline world. This vacuum is often being filled by the big management consultancies, giving them enormous influence over clients’ choice of agencies, so it was no surprise to see WPP’s recent launch of a consulting operation into this very space.
And beyond all this is the increasing need among brands to link advertising, marketing, CRM, fulfilment and beyond into logistics and supply chain management. This is the traditional home of those same management consultants, but with data being the linking element, the more advanced digital agencies are eyeing the space too. Because, if you’re an airline and you can integrate all the elements of your business, how much does it matter who takes the pictures of the palm trees?
Michael Nutley is editor-in-chief of New Media Age and Reputation Online