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Writer's pictureChris Van Roey

The rise of management consultants

Chris Van Roey

Consultants conquer the marketing world The trend continues since several years: business consultants infiltrate into the marketing and communication world. For the creative side they are on the takeover path and acquire creative agencies and design studios. In 2018 Q1 alone, there were 100 agency-related deals worth a collective $4.6 billion in sales, up from 94 deals worth $2 billion in the first three months of 2017. Only 14 percent of all recorded deals were made by agency holding companies. In Belgium this is a bit slower than in the rest of the Western world. For the time being, the acquisitions of Kunstmaan by Accenture and of Brandfirst by Deloitte are the only remarkable achievements.  But worldwide the trend is clear. In the Ad Age Barometer, 4 consultancy companies have now entered the top 10 of the agency world: the marketing business units of Accenture, PwC, IBM and Deloitte are in the ranking just below WPP, Omnicom, Publicis Groupe, Interpublic and Dentsu. Consultants buy themselves into the sector and plan to stay there.  But why is it that the rational and yet somewhat boring business consultants suddenly gain a foothold in a sector where creativity is the main driving force?  Contact at CEO level A first observation is that consultants do not enter through the traditional marketing department but have direct contact with the CEO or the Board of Directors. They position themselves as strategic partners with large reorganization and cost-saving projects. 'Shareholder value' is their code word, and with that they attract the attention of the CEO. No need to participate in large agency-pitches or to pass through the procurement department. That gives consultants a lot of power and credibility. It is therefore not surprising that in a recent study by Forrester, 73% of marketers declared that they were "open to business consultants". From 'communication' to 'business transformation' Communication agencies mainly sell communication strategy and 'execution and implementation' and base themselves on a timesheet remuneration model. Consultants focus on the broader business strategy, total customer experience and growth (execution is a commodity for them) and can therefore use a business model with higher margins. And the more important data and digital becomes in our sector, the more we enter the domain of consultants. Or as a senior managing director of Accenture recently said: "We don't believe brands are built from advertising anymore, they are built from an amalgamation of customer experiences, so that is what we are focused on". Consultants change the theme from 'advertising and communication' to the theme of 'business transformation'.  Focus on ROI Marketers today are very concerned with how their budget is being spent. There is a lot of mistrust in the sector and that creates a vacuum for auditors and consultants. Advertisers are very concerned about the Return on Investment of marketing and communication investments. A recent study by PitchPoint and UBA shows that it is precisely the weak point of creative agencies, and at the same time this is the focus of the business consultant. The total process is a complex chain that is almost entirely controlled by consultants: consumer data, insights, customer experience, business results and metrics. In the middle is the link of the creative idea, and that is the main but limited focus of the agency world. Convergence The rise of consultants in our world is a clear reflection of the changing marketing environment. Traditional communication models are under threat, and consultants are coming up with a new approach. Who will win the race? Will the consultants be able to develop themselves as creative talents? Or will the creative agencies be able to turn out to be business consultants more quickly? One thing is clear: the business models of consultants and creative agencies are converging rapidly.

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