Accenture's bullish talk about building a 'cagency', a fusion of agency and management consultancy, has unnerved advertising people. Suddenly every agency wants to be a consultant or wonders if it should be – even though it's far from certain that's what brands want.
Accenture has set the pace as the most disruptive entrant in marketing services in a generation, although it’s a good bet that Sir Martin Sorrell and his new acquisition vehicle, S4 Capital, are going to generate more gossip.
Established ad agency groups have got an inferiority complex about Accenture because they don’t have its "upstream" business consulting and operational capabilities or its $100bn stock market valuation. At the same time, other big management consultants and IT companies can see how Accenture has stolen a march on them and are debating how far they need to move in the same direction.
Accenture’s decision to launch a programmatic buying unit in May was a turning point as it showed the consulting giant is targeting media as well as creative budgets.
Anatoly Roytman, Accenture’s managing director for Europe, Africa, Middle East and Latin America, who coined the phrase "cagency", told Campaign’s Media 360 conference that all media will become "addressable" and be bought and targeted programmatically within a few years.
Some agency leaders want to be more like consultants
Moving into media looks like a natural step for the consultants because there are economies of scale in technology, automation and data to be exploited – unlike in creative where, arguably, there are some diseconomies of scale.
The doubters don’t think the consultants can "do" creative. Sorrell groused during his final days at WPP that Accenture can’t just "buy culture". However, managing costs and driving efficiencies are more comfortable terrain for the Maths Men from the consulting and auditing world, especially if they can be advisors, rather than buyers, and help brands to bring media and data in-house and to combat fraud.
The consultants are promising to improve transparency and reduce arbitrage of media pricing – something that challenges the way that agency groups have done business.
They have identified programmatic as the soft underbelly of media because, in the words of a recent McKinsey report into rebates, it suffers from "difficult-to-understand and at-times-opaque agency fees".
Brands like the prospect of greater competition and transparency and have started to send RFIs to Accenture and Deloitte when media accounts come up for pitch.
The consultants’ big sell is that they can manage every touchpoint in the customer experience, not just media and marketing, for brands in a digital world. It is a persuasive proposition but it doesn’t mean that every chief marketing officer or chief customer officer is buying it. Several CMOs have said the same thing to me recently. They want brilliant creative ideas and brilliant people and they like having a range of trusted advisors. Buying an end-to-end "solution" from one supplier is not top of their wishlist during this time of relentless digital disruption.
Nonetheless, Accenture’s entry into marketing services has been good because it is forcing agencies to raise their game and change. I understand the rise of the consultants has preoccupied the board of WPP during the search for Sorrell’s replacement.
Some agency leaders want to be more like consultants. "I hope Accenture will succeed," Arthur Sadoun, chief executive of Publicis Groupe, said at his recent investor day, because "we are in the same race, starting from a different point".
Others have no intention of becoming consultants. "We’re about demand generation, rather than operational management and efficiency," one ad chief says defiantly.
Agency groups have been surprisingly stable for the past decade while media owners have been brutally disrupted by Google and Facebook. Now the battle with the consultants promises to reshape the agency business.
Bring on the revolution.
Global head of media