CLOSE-UP: Live Issue/Consultancy Conundrum - Agencies and consultants try to bury the hatchet. The internet is providing a platform for both parties. Gordon MacMillan reports

It was only a couple of years ago that a familiar warning went out to the advertising industry: beware of the consultants muscling in on the business of brand-building.

It was only a couple of years ago that a familiar warning went out

to the advertising industry: beware of the consultants muscling in on

the business of brand-building.



The warning came from Graham Hinton, the then president of the IPA, but

it was a warning that had been heard many times before in the

advertising industry.



The argument was simple. Agencies were being sidelined and paid less as

consultants took the bigger fees and formed relationships with senior

clients.



Compare this with last week’s news that CDP/Dentsu and

PricewaterhouseCoopers had formed an alliance - called Determinet - to

work together to provide a one-stop shop for UK companies wanting to

build businesses on the internet.



It is the first venture of its kind in the UK and, a day later, it was

followed by a similar deal out of Publicis in Paris. The French

advertising group said it had forged a partnership with the technology

services company Cap Gemini and the management consultancy firm Ernst &

Young Consulting.



Both concentrated on the internet and both were pitched as a response to

clients’ needs. The two deals were about bringing the agency brand

communication and management skills together with the corporate strategy

skills of management consultants.



So what happened to the threat? What about, as one industry source put

it, the concern that ’what management consultants want is access to

agency clients and they have no intention of giving any business in

return’.



Chris MacLeod, the chief executive of CDP, thinks this was always

exaggerated.



’I thought the threat was overstated. I see the deal with PWC as being

about complementary skills, not about losing something,’ he says.



Always willing to go a step further, Nick Brien, the chief executive of

Leo Burnett, puts it down to paranoia. ’I never subscribed to the idea

that management consultants are out to eat agency lunches. It’s paranoia

on behalf of some organisations which reflects their lack of strategic

competencies. I think the industry has to be more concerned about

new-media agencies,’ Brien says.



What is true about the deals is that the consultants are taking the lead

in putting together these virtual networks on behalf of clients. This

seems to reflect the fact that consultants are the ones who hold the

trust of senior company executives, of boards of directors, chairmen and

chief executives.



One industry source put it a little more bluntly. ’Agencies are often

lucky if they have a relationship with the marketing director. Sometimes

it does not even go that high and, in that sense, agencies are at the

bottom of the food chain.’



However, this is not a view shared by many in the industry, particularly

at a time when the issues of brands has come to the top of so many

agendas with the arrival of e-commerce.



William Eccleshare, the former Ammirati Puritas Lintas chief executive

who is soon to join McKinsey to set up a branding unit, says that it’s

about time. ’The recognition that brand strategy has frequently been

disconnected from the overall business plan is becoming increasingly

prevalent. The internet has speeded that up.’



Agencies are currently enjoying a bonanza of new business as dotcom

companies look to organisations to help them build brands from scratch

and at break-neck speeds.



Brien says that people should remember what business ad agencies are in.

It is, he says, the business of brand communications, not brand

management. Like a number of agencies, including Euro RSCG Wnek Gosper

and Bartle Bogle Hegarty, Leo Burnett has a dedicated brand consultancy

unit, the Lab, which now has a staff of 18.



These kinds of units consider the brand as a whole. They look at

everything from the uniform and attitude of staff to the look and feel

of the retail environment.



’Leo Burnett is focused on brand communications. What we don’t do is

look to fulfil the brand promise on every level. That is what companies

like the Lab do,’ Brien says.



Consider also what a lot of management consultancies are geared

towards.



It is technical work - implementing computer networks and business

re-engineering.



For this reason, MacLeod believes that new dotcom companies in

particular are more at home working with advertising companies than

consultants.



Hinton agrees: ’My contention always was that agencies were in a better

position. What they tend to bring are judgments based on intuition and

market knowledge. They make creative leaps rather than going through a

rigorous reduction process.’



From the management consultancy side, the issue seems even more clear

cut. For the clients it makes sense if they can go to one place and have

all their requirements met - the kinds of deals commonly made by

management consultants when, for example, overhauling a client’s IT

strategy.



The deal with PWC, for example, is about global issues and global

partnerships.



PWC and Dentsu launched their partnership in Australia, covering the

Asia-Pacific region. The UK is the second stage of the deal. In Europe,

plans are being made to develop the Determinet alliance in Switzerland,

Belgium and the Netherlands before rolling it out across Western Europe

and the US.



What this underlines, says Robin Tye, the UK e-business consulting

leader at PWC, is that the internet space is one where things happen

very quickly and the right partners have to be brought in.



’This is an era where a lot happens very quickly,’ Tye says. ’We have to

bring in partners and work together. We are not advertising

agencies.



We do not advise on brands and campaigns. Clients do not have the time

to source everything. They want teams that are already working together.

This is a network issue. It is a powerful combination.’



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