As consultancies like Accenture and Deloitte muscle onto agency turf, shops are turning the tables with new-practice groups that supply everything from product-portfolio-management advice to advice on corporate reorganizations.
Publicis Groupe’s Starcom MediaVest Group the other day launched marketing consulting brand Zero Dot at the same time 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 make use of Threepipe that could offer higher compensation rates than advertising while reeling in new ad business.
“Business is very 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 looking for strategic help.”
Red, with a dedicated team of 25 executives and its own P&L, has increased revenue 40% with assignments in Ny, China, Brazil along with the U.K. The group recently helped a global client execute an 18-month portfolio revamp, and several client requests have come from private-equity firms searching for understanding of which brands to remake or invest, she said. The practice is additionally considered a promotional-business-builder at Ogilvy. “When we sell $1 of consulting work, in the future it can result in $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% of the shop’s total revenue emanates from clients that work with both consulting arm along with the larger agency.
Data and analyticsErnie Simon chalks in the growing need for this sort of work to marketing companies becoming more sophisticated in data and analytics, that are increasingly being used to help you shape larger business strategies. Mr. Simon left his chief strategy officer post at Omnicom Media shop OMD to launch a consulting practice within WPP’s GroupM in May. During the time, he noticed chief strategy officers fielding more questions about business processes and structure beyond traditional brand strategy, such as “focusing regarding 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 in revenue “we wouldn’t have had otherwise,” said CEO Bob Greenberg. He wouldn’t disclose names of clients, but said the audience recently helped one decide which companies are worth expanding to diversify revenue. For other individuals, the group is working on IT, brand and product-innovation strategy. “We saw competition from Accenture, from McKinsey and from a number of the branding agencies [like Ideo],” he was quoted saying.
SMG’s Zero Dot is much more marketing-centric as opposed to those comparing themselves to business consultants, nevertheless the shop remains labeling itself being a consultancy mainly because it looks to 52dexspky clients facing atypical brand challenges. “We should capable of working with our top 10 to 20 clients in 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 The United States Fabric Care, happen to be onboard.
“We wanted [someone] to offer a purpose that’s more consulting than typical agencies although not within the [traditional] experience of consulting,” said Mr. Raman of any integrated marketing strategy the group conceived due to its Gain brand to speak some great benefits of social websites to his distributor sales force.
Each time a chief strategic officer advises in the consulting capacity within an agency, that executive is normally billed as overhead, based on Ernie Simon, president of GroupM Consulting Services. But in a dedicated agency consulting group, compensation takes the sort of fixed project fees and better rates in contrast to 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 — compared to standard agency work. R/GA’s year-old “business transformation” group runs using a compensation model that looks a lot more like that from a consultancy and it is budgeted as a non-marketing expense by clients, said CEO Bob Greenberg.