As consultancies like Accenture and Deloitte muscle onto agency turf, shops are turning the tables with new-practice groups that provide from product-portfolio-management advice to advice on corporate reorganizations.
Publicis Groupe’s Starcom MediaVest Group last week launched marketing consulting brand Zero Dot concurrently sibling Zenith soft-launched a media-focused consultancy called Apex. They join months-old experiments at Interpublic Group digital shop R/GA and WPP media-agency network GroupM to make use of Threepipe that will offer higher compensation rates than advertising whilst reeling in new ad business.
“Business continues to be very good this past year, which tells me there’s an appetite,” said Carla Hendra, global chairman of Ogilvy Red, a 3-year-old consulting group within WPP’s Ogilvy & Mather agency network. “Clients are searching for strategic help.”
Red, which has a dedicated team of 25 executives and its particular own P&L, has grown revenue 40% with assignments in New York, China, Brazil and also the U.K. The group recently helped an international client execute an 18-month portfolio revamp, and numerous client requests have come from private-equity firms seeking insight into which brands to remake or invest, she said. The practice is likewise viewed as an advertising-business-builder at Ogilvy. “If we sell $1 of consulting work, later on it can cause $3 to $4 dollars of communications work,” said Ms. Hendra.
“It has a halo effect. Everything we’re doing is driven off that consulting,” said Rosetta CEO Tom Adamski, who noted that about 50% of the shop’s total revenue emanates from clients that do business with the two consulting arm and also the larger agency.
Data and analyticsErnie Simon chalks in the growing need for this type of try to marketing companies acquiring more sophisticated in data and analytics, that happen to be increasingly being used to help you shape larger business strategies. Mr. Simon left his chief strategy officer post at Omnicom Media shop OMD to produce a consulting practice within WPP’s GroupM in May. Back then, he noticed chief strategy officers fielding more queries about business processes and structure beyond traditional brand strategy, for example “focusing concerning how to make analytics or data work or turn media in to a competitive advantage.”
RG/A’s “business transformation” group carries a dedicated staff of 12 serving about 10 clients globally and represents millions of dollars in revenue “we wouldn’t have gotten otherwise,” said CEO Bob Greenberg. He wouldn’t disclose names of clients, but said the audience recently helped one choose which companies are worth expanding to diversify revenue. For some individuals, they is concentrating on IT, brand name and product-innovation strategy. “We saw competition from Accenture, from McKinsey and from a few of the branding agencies [like Ideo],” he was quoted saying.
SMG’s Zero Dot is a lot more marketing-centric than those comparing themselves to business consultants, however the shop continues to be labeling itself like a consultancy mainly because it looks to 52dexspky clients facing atypical brand challenges. “We should able to work with the top 10 to 20 clients inside the next two years,” said SMG CEO Laura Desmond. SMG clients including Kevin George, Jim Beam CMO, and Sundar Raman, marketing director for Procter & Gam-ble Canada And America Fabric Care, are already onboard.
“We wanted [someone] to serve a purpose that’s more consulting than typical agencies although not from the [traditional] sense of consulting,” said Mr. Raman of an integrated marketing strategy the audience conceived because of its Gain brand to communicate some great benefits of social media marketing to his distributor sales team.
Whenever a chief strategic officer advises inside a consulting capacity inside an agency, that executive is normally billed as overhead, in accordance with Ernie Simon, president of GroupM Consulting Services. However in a dedicated agency consulting group, compensation takes the sort of fixed project fees and better rates compared to the hourly fees charged by full time employees at agencies. Consulting will offer significantly wider margins — some agency execs claim greater than 10 percentage points higher — in comparison with standard agency work. R/GA’s year-old “business transformation” group operates on a compensation model seems more like that of a consultancy and is budgeted as a non-marketing expense by clients, said CEO Bob Greenberg.