Although Brinker declined to identify Deloitte Digital billings or revenues, he acknowledged that, “We are doubling down around all the capabilities around the CMO.”
According to Constellation Research Group estimates, the global advertising market is expected to hit $125 billion by 2015. Because marketing, by its very nature, sits “at the crossroads between the old analog world and the new shift to digital transformation,” there are more players who want a shiny piece of the marketing budget.
The agency, which traditionally had the coveted direct relationship with the brand and marketer, becomes increasingly attractive to the technology vendor that wants more access to decision-makers through partnerships. (Think Salesforce.com’s alliance with Omnicom.) On the flip side, a mega-vendor like IBM, with its $480 million acquisition of cloud marketing solutions provider Unica in 2010, brings not only a technology stack to the digital marketing table, but an agency/services component as well with IBM Interactive.
“I think [with] what you’re seeing with some of the consulting firms, the big driver is, ‘How do we have a conversation with the CMO?’” said Ray Wang, chairman and principal analyst at Constellation Research. “But just because you buy an agency, it doesn’t mean you’re going to have that kind of conversation. You have to buy an agency that actually is focused on building out engagement, understanding the customer journey maps, selling the concept.”
While the creative idea was traditionally born by the agency, the business process or execution belonged to the consulting firm. These worlds continue to converge. Accenture most recently acquired digital marketing services company Acquity Group to meet the demand of “chief marketing officers and brand leaders [that are] looking for a new type of service provider that can blend the creative process with analytics and enabling technologies,” Accenture noted at the time of the May acquisition.
The Acquity deal was preceded by Accenture’s acquisition of London digital consultancy Fjord, which was an investment on Accenture’s part to consistently “help our clients understand the consumer in a really holistic way,” Erik Larson, a managing director at Accenture, told AdExchanger in a recent interview.
Global management consulting firm McKinsey & Co., while seemingly not as active on the acquisitions front in the past year, did, through a joint venture with Nielsen, acquire social TV measurement, analytics and audience management solution SocialGuide last year.
Although the lines can blur between management consultancies alone, there are some distinctions, noted Brian Wieser, senior research analyst at Pivotal Research Group.
“Most of the intersection overlap between the marketing services arm of Deloitte and Accenture are somewhere between management consulting on the Deloitte side and business process outsourcing from the Accenture side,” Wieser said. “IBM (Interactive) is somewhere in the middle.”
There are two “footholds” a management consultancy typically goes after in order to drive business for the brand client, he noted. In one instance, he said the consultancy may approach it from a marketing services standpoint, “which is technically an outsourced marketing function and that makes sense if you’re a management consultancy with deep experience in business process outsourcing.” Then, there’s the strategic context, where the synergies can be less clear, he said.
Strategic planning used to involve lesser forms of media (e.g. just TV rather than TV, social and second-screen campaigns), where “the connection between a TV campaign and a result was very noticeable,” Wieser said. “It was incumbent upon a CEO to have relationships with their agencies.”
As marketers and the CMO increasingly gain more budget control, and campaigns span a wide range of channels and devices and behaviors, the picture has completely shifted.
“It used to be about selling a product or service, but we’ve moved from selling products and services to selling business outcomes and selling an experience,” Wang added. “The agency is typically good at selling ideas and getting it out there, but the gap has traditionally been execution. Being able to merge the creative and execution process is how [an idea for selling a brand experience] becomes successful.”