CAMPAIGN INTERACTIVE: BEHIND THE HYPE - NEW-MEDIA STRATEGY - Digital offers a lucrative platform for consultancy. It’s the only game in town if you do new media work. Richard Cook investigates

By RICHARD COOK, campaignlive.co.uk, Friday, 25 June 1999 12:00AM

Suddenly, everyone wants to be a management consultant. It’s still all right to dream, to create, and to plan, you understand, but consultancy is now where it’s at. Especially in new media.

Suddenly, everyone wants to be a management consultant. It’s still

all right to dream, to create, and to plan, you understand, but

consultancy is now where it’s at. Especially in new media.



For years, advertising agencies worried that the evil spectre of

consultancy was eroding their usefulness. Consultants, they feared, were

getting closer to clients by appropriating the strategic advice they

formerly gave away for free.



Worse still, they were charging large sums for it.



And so mainstream ad agencies decided to try to market themselves as

strategic consultants and claw back some of the ground they had

lost.



They did this with, it should be said, limited success. Now the digital

revolution is providing them with an opportunity to try again.

Unfortunately, everyone else seems to have spotted the opening too.



Certainly there has been a rash of activity in the last few months in

this particular direction, as ad agencies, media agencies and specialist

new-media agencies have moved to embrace consultancy in a big way. From

the other side of the hill - but all heading for the same digital high

ground - come the brand consultants and management consultants, hiring

marketing and agency personnel as they go.



The first tangible evidence that this was something more than a passing

fad came last year when the Lowe Group backed the start-up digital

management consultancy, Decipher. According to Lowe, it made the move

because Decipher had what the agency world lacked - a commercial focus,

rather than a marketing one.



Nigel Walley, the Decipher managing partner, explains: ’Everybody talks

about convergence as being at the heart of the digital issue, but they

normally mean between IT and telecoms. For the media industry, the more

important convergence is between brand marketing and sales. Media

decisions used to be just about communication. In the digital age, media

decisions can affect sales and distribution to the same extent and it is

incumbent on professional agency groups to be able to solve both sides

of the equation on their clients’ behalf.’



This collapse of the wall that once divided marketing and commerce

explains, more than anything, why so many previously disparate service

providers are now rushing to occupy the same territory.



Among them are new-media agencies such as AKQA, which last month created

the AKQA Consulting group to handle long-term projects in areas such as

e-commerce and in business issues relating to new media. Meanwhile, the

AKQA Communications group will continue to focus on the former staples

of the agency’s business - digital marketing communications, branding

and interface design.



The other big boys have made comparable moves. Agency.com, the former

Online Magic, recruited Steve Ross in April to head a new strategic

services division based in London and to spearhead strategy via the

whole European network. Ross, the former interactive commercial director

for Air Miles at British Airways, argues: ’It’s a natural progression

for the online agencies to move into consultancy. When we started, new

media was very much production focused, but things have really moved on

from there. The fact is that clients don’t just want a web page

designed. They want to know how to make money from it, and that’s where

we come in.’



All the offerings are hoping to position their consultancy business in

rather different ways. AKQA, for example, sees itself as competing not

with the McKinseys and PriceWaterhouseCoopers but with the IT

providers.



’It’s all about being able to produce a return on investment for clients

within the next nine months,’ AKQA’s chief operating office, Matthew

Treagus, says. ’We are fighting it out with the big IT providers to help

design products that will enable clients to achieve that goal.’



Media agencies, too, are vying to carve out a lucrative niche for

themselves.



For years, they have been fighting to break out of commission-based

media-buying briefs into the fee-based strategic arena.



Digital provides them with their best chance yet to do so.



Some, like Motive (with Motive Digital Services) and Booth Lockett Makin

(with Quantum New Media), have branded their offerings separately in

order to underline that this is not a service they are prepared to give

away.



Others - like Western International Media - have chosen to concentrate

solely on the strategy, outsourcing the online buying to a specialist

operation.



Paul Longhurst, managing director at Quantum, comments: ’At the moment,

new-media spot advertising is not that big an earner for agencies. All

they are concerned about is keeping the client relationship for some

time in the future, when it will be. And what clients want at the moment

is to have a strategic conversation about how they can use interactivity

as a whole. The bigger debate is how they communicate one to one with

the consumer.’



But how many consultancies can the market really take? The total size of

the consultancy market has already more than doubled in the 90s and

continues to multiply in virus-like fashion. According to estimates by

the Management Consultants Association, there are now around 18,000

management consultants working in the UK. Billings of MCA members alone,

which it estimates account for around 60 per cent of total billings in

the sector, are now worth pounds 1.7 billion, compared with pounds 810

million in 1990 and just pounds 62 million in 1980.



But the management consultants are dismissive of these new

competitors.



In their eyes, it doesn’t matter how agencies brand themselves or how

cleverly the consultancy operation is stripped from the main body of the

offering, the problem remains a lack of independence. How can agencies

avoid the trap of advising companies to invest in their own

products?



’It’s like double-glazing salesmen who have the words double glazing

consultants printed on their business cards,’ says a director at one of

the biggest mainstream management consultants. ’At the end of the day,

it doesn’t mean they aren’t salesmen and it doesn’t mean they won’t get

treated as salesmen.’



This article was first published on campaignlive.co.uk

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