Home Analysts Gartner’s Magic Quadrant: Digital Agencies Wake Up To Consultancy Threat

Gartner’s Magic Quadrant: Digital Agencies Wake Up To Consultancy Threat

SHARE:

Digital agencies aren’t shrugging off management consultancies as competition anymore. Some are even promoting their consulting chops as they compete in an increasingly crowded market.

“Until this year, traditional agencies had their heads in the sand about the threat management consultancies were bringing to the market,” said Jay Wilson, director at Gartner and author of Gartner’s Magic Quadrant for Digital Agencies. “A lot of the more traditional agencies led their stories with consulting capabilities and how they’re looking to build those out.”

“Business transformation” was a key selling point this year for those named in the report, which recognizes digital agencies for their work in strategy, development, execution and measurement of digital experiences across the customer journey.

That transformation is beginning to give management consultancies with digital services a leg up against more traditional digital shops. For example, IBM iX, IBM’s in-house agency, made it into “Leaders” quadrant, which is dominated by traditional digital agencies, for the second year in a row.

Publicis Groupe’s SapientRazorfish and DigitasLBi were named leaders, along with WPP’s VML, AKQA and OgilvyOne Worldwide, IPG’s MRM//McCann and R/GA, and Dentsu Aegis Network’s Isobar. Hearst-owned iCrossing was also a leader, which is defined as having deep capabilities in business strategy and transformation, with notable investments in creative and marketing technology.

But to make the “Leaders” cut, digital agencies pushed their consulting capabilities far harder than last year, Wilson said.

“More traditional digital shops like OgilvyOne and DigitasLBi are trying to gain foothold in the consulting space, or at least offer consulting-like capabilities,” he said. “There’s finally a recognition that because marketers are responsible for things well beyond traditional marketing, they need much more well-rounded advisors at their beck and call.”

Nipping at their heels were Accenture Interactive and PwC Digital Services, which were listed for the second year in a row as “Challengers,” which Gartner defines as having “a proven ability to execute their current offering, but haven’t yet executed a digital marketing vision on the scale of the Leaders.”

The challenge for consultancies is integrating creative talent into corporate culture. But they’ll have an easier time than agencies, which are tasked with mirroring consultancies’ longstanding vertical expertise, Wilson said. Consultants also have an advantage in that they’re often brought on before agencies receive an RFP.

But while agencies and consultancies duke it out to be the CMO’s most trusted advisor, marketers are dreaming of the day they can take their marketing responsibilities in-house.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

“We have found that marketers, in an ideal world, would love to do more building internal capabilities, less outsourcing to agencies,” Wilson said.

Shops like PwC Digital Service and Accenture Interactive could benefit from this sentiment, as they often help marketers bring programmatic in-house. But for most marketers, in-housing isn’t quite yet a reality.

Only 10% of marketers said they plan to reduce their work with agencies over the next three to five years. The lions’ share still spend roughly 22% of their marketing budget with agencies because they believe agencies are simply better at what they do, Wilson said.

“The primary reason marketers [told us they] continue to rely on agencies is they bring a superior level of quality to creative, content, media planning and buying,” he said.

Must Read

Viant Acquires Data Biz IRIS.TV To Expand Its Programmatic CTV Reach

IRIS.TV will remain an independent company, and Viant will push for CTV platforms to adopt its IRIS ID to provide contextual signals beyond what streamers typically share about their ad inventory.

Integral Ad Science Goes Big On Social Media As Retail Ad Spend Softens In Q3

Integral Ad Science shares dropped more than 10% on Wednesday, after the company reported lackluster revenue growth and softened its guidance for the Q4 season.

Comic: Gen AI Pumpkin Carving Contest

Meet Evertune, A Gen-AI Analytics Startup Founded By Trade Desk Vets

Meet Evertune AI, a startup that helps advertisers understand how their brands and products appear in generative AI search responses.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Private Equity Firm Buys Alliant As The Centerpiece To Its Platform Dreams

The deal is a “platform investment,” in which Inverness Graham sees Alliant as a foundation to build on, potentially through further acquisitions.

Even Sony Needed Guidance For Its First In-Game Ad Campaign

In-game advertising is uncharted territory even for brands like Sony Electronics that consumers associate with gaming.

Comic: Always Be Paddling

The Trade Desk Maintains Its High Growth Rate And Touts New Channels

“It’s hard not to be bullish about CTV when it’s both our largest channel and our fastest growing,” said The Trade Desk Founder and CEO Green during the company’s earnings report on Thursday.