Should agencies act more like management consultancies?

Centrica's Margaret Jobling argued last month that agencies need to adapt their business models.

Should agencies act more like management consultancies?

Ad industry upheaval is bordering on an existential crisis and the idea agencies should ape management consultancies has risen again.

Centrica chief marketing officer Margaret Jobling argued last month that agencies need to adapt their business models, after she appointed WPP to its global integrated account.

Jobling said the industry was not as developed as she originally thought when it came to fully integrated solutions and said there was a need for a management consultancy-style model.

"The big agency networks are going to have to figure out how they operate more like a McKinsey, where they ship in a team of experts for that client’s problem and then they disband them and send them off," Jobling told Campaign.

"And if they can’t do that and they’re too fixed and too centred around delivering their individual P&Ls for their individual agencies, then they will have a problem."

TSB chief marketing officer Peter Markey agreed that a management consultancy approach is necessary in today’s marketplace. "Client needs are changing and I don’t think linear services will fit the bill enough for clients as their businesses evolve," Markey said.

"Keeping in tune with a client’s changing needs means adopting the mindset of a management consultancy, identifying client needs, providing solutions to fix problems and specialist skills where needed."

TBWA\London chief executive Sara Tate argued that any agency group "worth its salt" already has "the best bits of a management consultancy model in terms of delivering a fully integrated solution".

She pointed to Omnicom’s bespoke teams under a single P&L, such as its Nissan United group. "Within TBWA we have many examples where we have fully integrated teams with a single P&L, and in addition we think as a collective, so we don’t cross-charge for pulling advice and teams together," Tate added.

Lucky Generals chief executive Katie Lee explained that the agencies founded in the last five to 10 years have been set up to build flexible teams around a single P&L. "We’d staff up and down depending on the task in hand," she said.

However, one agency leader who wished to remain anonymous agreed with Jobling that integrated agency models are not as advanced as they claim.

"Bolting agencies together is not the way to solve this, you have to find a way to properly integrate it culturally and structurally. That’s why I think people have been really screwing up on it," he said. "People have been thinking about it for ages but they have just been doing a holding agency model."

One area where Tate believes agencies can learn from management consultants is the way the latter articulates the value of its services, which makes them much more profitable. "Management consultants charge for the value of their services and not for the cost services take to deliver," she said.

There is a danger, however, that agencies throw the baby out with the bath water if they attempt to emulate the management consultancy model. "I don’t think the future of agencies is to evolve into something that already exists," Tate added. "Consultancies don’t have the creativity of agencies, that is why they are buying them."

Agencies that keep sight of their creativity, their core strength, will be the ones that win in the long term, Lee argued. "The thing that will differentiate us and keep us relevant is being able to solve clients’ problems but using creativity to do it," she said.

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