As consultancies like Accenture and Deloitte muscle onto agency turf, shops are turning the tables with new-practice groups that offer from product-portfolio-management advice to advice on corporate reorganizations.
Publicis Groupe’s Starcom MediaVest Group last week launched marketing consulting brand Zero Dot simultaneously 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 draw on Threepipe that can offer higher compensation rates than advertising while also reeling in new ad business.
“Business continues to be really 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 trying to find strategic help.”
Red, with a dedicated team of 25 executives along with its own P&L, has risen revenue 40% with assignments in New York City, China, Brazil and the U.K. They recently helped a worldwide client execute an 18-month portfolio revamp, and a number of client requests came from private-equity firms trying to find comprehension of which brands to remake or invest, she said. The practice can also be viewed as a marketing-business-builder at Ogilvy. “If we sell $1 of consulting work, down the road it can cause $3 to $4 dollars of communications work,” said Ms. Hendra.
“It comes with a halo effect. Everything we’re doing is driven off that consulting,” said Rosetta CEO Tom Adamski, who noted that about 50% in the shop’s total revenue arises from clients that do business with the consulting arm as well as the larger agency.
Data and analyticsErnie Simon chalks up the growing requirement for this type of work to marketing companies getting 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. During the time, he noticed chief strategy officers fielding more questions regarding business processes and structure beyond traditional brand strategy, for example “focusing concerning how to make analytics or data work or turn media in a competitive advantage.”
RG/A’s “business transformation” group has a dedicated staff of 12 serving about 10 clients globally and represents vast amounts of money in revenue “we wouldn’t have experienced otherwise,” said CEO Bob Greenberg. He wouldn’t disclose names of clients, but said the audience recently helped one determine which companies are worth expanding to diversify revenue. For other individuals, the team is taking care of IT, brand and product-innovation strategy. “We saw competition from Accenture, from McKinsey and from some of the branding agencies [like Ideo],” he stated.
SMG’s Zero Dot is far more marketing-centric as opposed to those comparing themselves to business consultants, nevertheless the shop continues to be labeling itself as a consultancy mainly because it looks to 52dexspky clients facing atypical brand challenges. “We would like to capable of working with our top 10 to 20 clients inside the next a couple of years,” said SMG CEO Laura Desmond. SMG clients including Kevin George, Jim Beam CMO, and Sundar Raman, marketing director for Procter & Gam-ble North America Fabric Care, are already onboard.
“We wanted [someone] to serve a purpose that’s more consulting than typical agencies although not within the [traditional] experience of consulting,” said Mr. Raman of an integrated marketing strategy the group conceived due to its Gain brand to talk the key benefits of social networking to his distributor sales force.
Every time a chief strategic officer advises within a consulting capacity within an agency, that executive is often billed as overhead, in accordance with Ernie Simon, president of GroupM Consulting Services. But also in a devoted agency consulting group, compensation takes the type of fixed project fees and better rates in comparison with 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 — when compared with standard agency work. R/GA’s year-old “business transformation” group runs using a compensation model seems similar to that from a consultancy and is budgeted as being a non-marketing expense by clients, said CEO Bob Greenberg.