With agencies and consultants, disruption goes both ways: UM global CEO

The idea that Accenture and its ilk are superseding agencies only affects those that don't change with the media landscape, according to UM's global CEO.

With agencies and consultants, disruption goes both ways: UM global CEO
The rise of consultancies in the media and marketing space is a big problem for agencies. Full stop. Yet the danger lies in the premise, according to Daryl Lee, global CEO of UM.

For Lee, this position makes at least one flawed assumption: that the disruption is only going one way. "We’re all in the disruption," he says. "Their [consultancies’] business is being disrupted, just like ours is, by digital."

The changing landscape doesn’t mean that consultancies are suddenly marketing or media experts, says Lee. It’s more that they are continuing to do what they’re good at and now applying it to these industries.

"What they are best at is building the infrastructure, whether it's marketing or business, that allows you to digitise a brand and shopper experience," he says. "They’re doing that end-to-end, and they’re bolting on a whole lot of acquisitions to help them do that. Are they integrating those acquisitions? I don’t know. But they don’t really need to, because if you look at any kind of IT project, you’re bolting together different applications anyway."

Do we need all the agencies we have? No. Do they need to be more integrated and collaborative? Yes. Are we moving fast enough? No. Not by a long shot.

Lee describes consultancies as great "IT systems integrators" that are creating "the infrastructure for new marketing and sales".

But eating UM’s lunch? Not quite.

"You still need to do the communications that flow into the marketplace to get people to go into that infrastructure, and that’s still what agencies know how to do," he states. "Now, do we need all the agencies we have? No. Do they need to be more integrated and collaborative? Yes. Are we moving fast enough? No. Not by a long shot."

So if the disruptive influence of consultancies is pushing agencies harder to be better equipped for the digital media economy, then Lee is on board. "It’s healthy for us to think Accenture’s coming for our business, but they’re really not," he says. "They’re building a side business that’s going to make our business change quicker."

Equally, agencies should not be afraid to give some of their own back. Lee said in the US last year UM went up against a consultancy for a project and won, which tells him there’s plenty for agencies to offer clients in a consultative remit. In fact, he says, it’s a necessity.

"[Consulting work] is important, it will be the thing we do," he proposes. "I used to say it was half and half, half our business is advertising, half will be branded content. That was my big provocation. Now I think it’s different, it’s going to be a third advertising—a third—a third branded content, and a third anything consultative around data."

Quite simply, Lee opines, the continued fragmentation of the digital media industry, particularly among publishers, means there will just be less space for brands to advertise in significantly high-quality environments.

Precision marketing will become the differentiator among agencies, and those that have good datasets and analytics skills, coupled with consultancy and data strategy capabilities, will get ahead, Lee says.

This has been central to his plans for UM, and in Asia-Pacific specifically, he tells of the agency data capabilities or so-called ‘business analytics engines’ (BAEs), that will be fully up and running in Australia, Japan, China, India and Singapore by mid-2018.

Adding the BAEs to UM’s talent pool means "you don’t just have these chefs who can make Michelin-starred meals, you actually have the ingredients to make them," Lee says.

"With branded content, some clients go all in and do as much as 10% of their budgets, some clients still like to experiment nervously. But with precision, you can show immediate return because we have data sets that connect brand behaviour and media response to sales."

This article was first published on www.CampaignAsia.com

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