As consultancies like Accenture and Deloitte muscle onto agency turf, shops are turning the tables with new-practice groups that supply anything from product-portfolio-management advice to recommendations on corporate reorganizations.
Publicis Groupe’s Starcom MediaVest Group last week launched marketing consulting brand Zero Dot as well 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 take advantage of Threepipe that could offer higher compensation rates than advertising whilst 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, that has a dedicated team of 25 executives along with its own P&L, has grown revenue 40% with assignments in New York City, China, Brazil as well as the U.K. The group recently helped an international client execute an 18-month portfolio revamp, and several client requests came from private-equity firms seeking insight into which brands to remake or invest, she said. The practice is additionally considered an advertising-business-builder at Ogilvy. “Once 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 arises from clients that work with both consulting arm along with the larger agency.
Data and analyticsErnie Simon chalks within the growing need for this type of try to marketing companies acquiring more sophisticated in data and analytics, which are increasingly getting used to assist 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. At the time, he noticed chief strategy officers fielding more questions about business processes and structure beyond traditional brand strategy, for example “focusing regarding how to make analytics or data work or turn media into a competitive advantage.”
RG/A’s “business transformation” group includes a dedicated staff of 12 serving about 10 clients globally and represents vast amounts in revenue “we wouldn’t experienced otherwise,” said CEO Bob Greenberg. He wouldn’t disclose names of clients, but said the audience recently helped one pick which companies are worth expanding to diversify revenue. For other individuals, the group is concentrating on IT, brand and product-innovation strategy. “We saw competition from Accenture, from McKinsey and from a few of the branding agencies [like Ideo],” he stated.
SMG’s Zero Dot is more marketing-centric than those comparing themselves to business consultants, however the shop remains labeling itself like a consultancy as it looks to 52dexspky clients facing atypical brand challenges. “We want to able to work using 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 Canada And America Fabric Care, are already onboard.
“We wanted [someone] to offer a purpose that’s more consulting than typical agencies yet not in the [traditional] experience of consulting,” said Mr. Raman of the integrated marketing strategy the audience conceived for its Gain brand to speak the benefits of social websites to his distributor sales force.
Every time a chief strategic officer advises in the consulting capacity in an agency, that executive is often billed as overhead, according to Ernie Simon, president of GroupM Consulting Services. However in a passionate agency consulting group, compensation takes the type of fixed project fees and better rates compared with the hourly fees charged by full-time employees at agencies. Consulting may offer significantly wider margins — some agency execs claim more 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 those of a consultancy which is budgeted as being a non-marketing expense by clients, said CEO Bob Greenberg.