An agency is an organization established to provide a particular service. A consultancy is a professional practice that gives expert advice within a particular field. Agencies and consultancies have always tried to do what the other does. But it’s accelerating at a more rapid pace these days.
Consultancies like Deloitte, Accenture, KPMG and PwC. Even McKinsey are building agency arms. Tech companies like Adobe, Oracle and Epsilon have added a service component in the form of an agency to their core product offering. Publicis bought technology consultancy and agency services network Sapient a few years ago.
What’s behind the activity? Why?
Here are 10 reasons the battle between agencies and consultancies is over data from 10 experts.
- MARKETING AND BUSINESS PERFORMANCE CAN NOW BE CONNECTED: “Agencies have never had a bigger opportunity to differentiate themselves from the competition via high-value, strategic services. Digital provides hard-wired connectivity between marketing activity and business performance. As a consequence, it enables agencies to assume an absolutely integral role in the fabric of their clients’ businesses.” – Damian Burns, Director of Global Agency Sales, Google
- DATA REQUIRES SOMEONE TO DIGEST IT: “There’s so much more information available about business performance, consumers, what’s happening with marketing campaigns. The expectation is that [marketers] would be able to digest all that and be able to know what to do next and do that very quickly. That is incredibly complicated.” – Jason Harrison, CEO, Gain Theory
- DATA ESTABLISHES RESULTS-ORIENTATION: “Previously, a consulting services firm would be hired based on their reputation and relationship. While older agency directors and C-suite executives still hire consultants and government contractors according to legacy criteria, Millennial (and Millennial-minded) leaders will pass over these candidates in favor of more results-oriented professional advisers.” – John Diller, President, Big Sky
- DATA ANALYTICS IS COMPETITVE ADVANTAGE: “Many agencies are now beginning to consider consolidating with businesses that offer consulting capabilities. data and the rise of multi-channel media consumption have completely disrupted the way businesses deliver marketing messages. Emerging digital marketing challenges have also spurred a ‘data analytics arms race,’ where whoever has the most robust business intelligence solution is thought to have a competitive advantage.” – Jay Sampson, Vice President of Partner Sales, Adobe
- DATA BREAKS DOWN SILOS WITH STRATEGY THAT IMPACTS SALES: “Companies have been talking about customer-centricity forever but with the emergence of roles like the chief data officer and the chief customer officer they finally have someone internally who can work across divisions and truly break down those silos. They now need a new type of service provider that can help create an integrated strategy that will impact sales and market share.” – Gene Hartman, Managing Director, Accenture
- BRAND PREFERENCE HAPPENS WITH A CLICK: “The time between consumption of a brand story through mass media to the actual experiencing of the brand has shrunk to a single click. It is not difficult to understand what is attracting management consultants into marketing services.” – Avi Dan, CEO, Avidan Strategies
- DISRUPTION OF CLASSIC STRATEGY: “New competitors with new business models arrive. Although these upstarts are as yet nowhere near the size and influence of big-name consultancies like McKinsey, Bain, and Boston Consulting Group (BCG), the incumbents are showing vulnerability. For example, at traditional strategy-consulting firms, the share of work that is classic strategy has been steadily decreasing and is now about 20%, down from 60% to 70% some 30 years ago.” – Tom Rodenhauser, Managing Director, Kennedy Consulting Research & Advisory
- STRATEGY REQUIRES DELIVERY CAPABILITIES: “It is no coincidence that management consultancies are acquiring the more technically skilled digital agencies – they are coming from the other direction and want to be able to determine the strategy and deliver the higher margin activities that flow from it. They need to prove delivery capability but will not be interested in the lower margin activities – they can simply buy these in as needs be.” – Green Square, Corporate Financial Advisors
- CMO IS NEW CIO: By 2017, Gartner, the technology research company, estimates that the largest portion of a company’s IT spend will be controlled by the CMO instead of the CIO, from data and analytics to front and back-end IT spend.” – Avi Dan, CEO, Avidan Strategies
- AGENCIES AND CONSULTANCIES HAVE TO BE DATA DRIVEN: “Agencies are more responsible for marketing and customer management data, but as data becomes more of a driver, agencies need to be more savvy data analysts and integrators. Clients need to hold consultancies to the same standards as agencies. But agencies shouldn’t try to become consulting companies. Instead, they should continue to do what they do best: Specialize and encourage a culture that breeds smart marketing people.” – Peter Figueredo, Head of Client Services, Kaizen
Do these reasons show you why agencies and consultancies battle over data? Does your organization need a data-driven company working in your behalf?