Whether they’re setting up special consultancy arms, or simply
asserting their strategic know-how, marketing services agencies are now
stampeding to get their feet under the boardroom table. Far from locking
the doors, many clients welcome the invasion.
And of course it’s not just the marketing specialists who want to offer
top-level advice for a handsome fee. Channel 4’s recent series on
management consultants, Masters of the Universe, estimated that the
business was worth pounds 25 billion worldwide, and growing fast. Nearer
home, the London-based Management Consultants Association claims its
members’ revenues rose by 30 per cent last year to pounds 2.7 billion.
It puts the total UK market at nearly pounds 5.5 billion.
Much of this is far removed from marketing. Compared with IT consultancy
and systems management (nearly pounds 750 million), corporate strategy
(pounds 284 million) and financial systems (pounds 188 million),
marketing accounts for a lowly pounds 37 million of MCA members’
Yet strategic marketing consultancy is in demand and it’s a development
that poses key questions. Is marketing now at the heart of the boardroom
agenda? And where it is, which sort of agencies and consultancies are
there with it?
Clients do want more top-level, external advice on marketing issues and
for a whole list of reasons. Short-term pressures, for example, leave
clients too little time for long-term planning. ’More senior marketers
don’t have the time to look outwards or forwards, and they need to do
both to drive their businesses,’ Fiona McAnena, managing director of the
Added Value Company, says.
The company, a leading marketing consultancy now boasting a turnover of
pounds 30 million, has just completed a survey into how marketing
directors spend their time. Half goes on dealing with current
issues,with 16 per cent on reviewing past performance and 25 per cent on
planning the year ahead. On average, only 14 per cent is devoted to
longer term thinking.
Marketing, meanwhile, is becoming much more complicated as media
fragments and new tools like the internet arrive. McAnena points out
that many markets are becoming less clearly defined, while brands are
moving into wider territory, with developments such as airlines and car
manufacturers setting up in financial services.
The point is summed up by Kevin Thomson, chairman of the Marketing &
Communication Agency, a specialist in internal communications. ’We’ve
gone from mass marketing to mess marketing,’ he says. ’You just don’t
know how you are going to reach your customer now - online, off-line,
globally or locally, conventional media or face to face.’
To all of that can be added pressure on resources, which means that many
tasks once done in house are now farmed out.
’Companies have realised that it may be better to keep central office
costs low, and buy services in,’ explains Anthony Wreford, European
president of Omnicom’s diversified agency services division. ’Putting it
crudely, you can fire an agency or consultancy with three months’
notice, whereas getting rid of individuals or departments can be both
expensive and tortuous.’
There’s no accurate measure of what marketers are spending on
consultancy, however, and one of the complicating factors is definition.
’Consultancy’ implies top-level, impartial advice; it may, or may not,
include implementation of any recommendations made. Many marketing
shops, though, use the terms ’consultancy’ and ’agency’ as if they were
Wreford argues that agencies over the years have tended to be more
generalist, leaving a gap for consultants to establish themselves in
These may be industry sectors such as information technology and
healthcare, or disciplines such as customer relations, internet
marketing and internal communications. ’The fact that they are
specialists means that the quality of the service or advice is actually
a lot better, and that’s one reason for their success,’ he adds.
But at the same time the complex web of specialists needs to be fitted
into an overall strategy and advertisers want to see how that web is
affecting the bottom line. Some specialists are better placed or better
resourced to take the strategic high ground with the client and to
charge for that ’total communications’ vision.
’Consultancy is just a posh word for good thinking,’ Iain Ferguson,
chief executive of KLP Euro RSCG, says. ’We have a section which is
about good thinking, financed by clients purely to think about where the
market is heading, how consumers attitudes are changing, and so on, with
no link to creative execution.’
Advertising and media agencies would argue that they are in pole
position, having been trusted with the lion’s share of spend and the
highest profile part of the communications strategy for clients over the
years. Informally, they have been consultants for a long time, although
they have rarely charged explicitly for their advice.
Rather than detract from that part of their current offering, many are
launching spin-off units which can offer strategic advice at a charge
and at arm’s length from the main agency. Leo Burnett has set up a
separate consultancy unit called Innovations; CIA Medianetwork is to
launch a division offering research and consultancy called the Knowledge
Bank; while others, such as Carat, also have research and consultancy
Naturally, direct marketing specialists are in there fighting, given the
rising importance of their discipline to clients’ businesses. When
companies are spending between pounds 10 million and pounds 20 million a
year on direct marketing, their directors are more interested in what it
will do for profits and customer relations than whether a triple-folded,
self-sealing mailer is a better solution than a conventional letter.
That’s the logic behind last month’s launch of Zalpha, the consultancy
arm of the UK’s biggest pure direct marketing agency, WWAV Rapp
Stuffed with planners, database specialists, statisticians and internet
Zalpha’s focus will be on business solutions that deliver a return on
It’s a timely move, and not unique to WWAV. Lowe’s integrated offshoot,
Interfocus Network, set up a management consultancy division 18 months
ago under Miles Murphy, formerly of Coopers & Lybrand. It’s been
advising the US clothing company, Eddie Bauer, on everything from retail
strategy to distribution in the UK - issues well outside the normal
brief of a communications agency.
Some of the marketing services specialisms are better positioned than
others to influence a client’s overall business strategy. With the
internet now affecting some corporations’ standing in the City, media
and marketing is shifting further up the boardroom agenda. Marketing
services companies are looking to supplant the traditional business
consultants, rather than the business consultants stretching to cover
traditional ad agency or media agency ground.
Martin Sorrell, WPP’s group chief executive, has warned persistently of
management consultants moving on to agency turf. He claims that some of
the world’s fastest growing industries, such as IT, telecoms and
pharmaceuticals, have a greater propensity to turn to management
consultancies - especially McKinsey, Bain, the Boston Consulting Group
and Monitor - for marketing advice.
’When I was at business school, they used to draw a distinction between
business strategy and marketing strategy,’ he adds. ’Today, it’s
increasingly recognised that they are one and the same, and this may be
what is driving the thinking in these new industries.’
It’s very difficult to pin down precisely what clients are spending on
strategic marketing consultancy but, Sorrell argues, it represents an
opportunity as much as a threat. ’What we are trying to do is build
specialised, strategic marketing businesses,’ he says. ’It is too strong
to call them consultancies, but they will advise clients in a number of
highly specialised areas where it may have been thought in the past that
our traditional businesses did not have the competencies to provide
’I believe marketing issues are the critical issues that companies face,
because of over-capacity and the need to achieve branding and
differentiation in an increasingly undifferentiated world. What I would
like is for our companies to be the preferred supplier when clients have
a strategic marketing issue to deal with.’
Omnicom and the other major marketing communications groups take a
similar line. Wreford says: ’Our aim is both to support and invest in
consultancies that are at the top of their particular trees, and
therefore have the capability to develop good client relationships, and
deliver to client expectations.
’They have to be good in their field, but, given that, it is an
opportunity for us. Once Omnicom has backed a company, we work with it
to help it meet its clients’ needs and fulfil its own ambitions, which
might be domestic, and might be global.’
Reservations remain as to whether the big names in management
consultancy represent a threat to the marketing specialists. Eddie
Bowman says not, and he’s seen it from both sides. A career adman,
formerly with Dorland and Ogilvy & Mather, he now heads up KPMG’s
advertising consultancy practice - a unit specialising in advising
agencies how to run their businesses more efficiently.
Agencies tend to worry that they are not paid for the consultancy work
they do. Management consultants, on the other hand, are very good at fee
negotiation, and are quite prepared to say no and walk away if their
expectations are not met.
But in terms of the work each side does, agencies can stop being
’The consultants are brilliant at linear thinking, at sorting out
complex problems in a logical way,’ Bowman notes. ’Agencies are lateral
thinkers, great at communication and dreaming about the future of the
world. They’re just good at different things.’
This is a view that is increasingly heard. The Marketing & Communication
Agency’s Thomson equates management consultants with the left-hand,
logical side of the brain, and marketing specialists with the
right-hand, creative side. Sorrell speaks of international consultancy
firms being good at ’quant’ (data), and the marketers good at ’qual’
(insights into customer behaviour). ’There’s some scope for working
together,’ he adds, ’even though consultancies tend to think of
advertising as superficial, and advertising agencies regard consultants
as overpaid for what they do.’
As the Added Value Company’s McAnena sees it, the two sides are
’Management consultants have a superb reputation for analytical skills,
but you can’t analyse your way to the future,’ she says. ’What’s
critical is that there must be room for leaps of faith, for creativity
One reason for the rise of consultants is that companies are always
chasing the latest idea in the hope that it will be a panacea for
At the very least, they can’t afford to be left behind.
Two of the big themes at the moment are corporate reputation and
customer relationship management. The first has got the PR industry in a
lather of excitement, with the Public Relations Consultants Association
forecasting that this could be the industry’s big growth engine for the
next few years.
The reasons include not only a probable link between reputation and
share price, but also a belief that reputation could be the big
differentiator in an age when products and services are so readily
Customer relationship management - ’a strategy that affects the whole
organisation, from marketing to IT’ - will be a major specialism of
WWAV’s Zalpha. ’The theory of customer relationship management is a very
good one, but the reality lags a long way behind,’ says the WWAV
chairman, John Watson. ’Zalpha’s role is to take a buzzword and make it
Key to both these developments, however, are a client company’s
If they don’t share the vision and culture, if the image doesn’t reflect
reality, relationships with customers and the company’s reputation will
be in danger. As a result, internal communications are moving up the
’Three years ago, I could count my competitors on one hand,’ says
’Now it’s impossible.’
MARKETING AND COMMUNICATIONS: INNER-CIRCLE CONSULTANTS
Advertising Agencies have been trusted consultants for years, but may
need to formalise the arrangement for profit and profile.
Agency selection In at the beginning, those who help clients to choose
an agency can have input into the client’s strategic marketing
Brand positioning and management Though some are a substantial size,
these are usually small outfits and fleet of foot, often built around
individuals who are trusted advisors.
Corporate identity The new incarnation for big design groups who have
proved themselves able to see a company ID in terms of a masterplan.
Corporate reputation The PR masters of spin are increasingly influential
as manipulating the perception of a company goes up the marketing
Database design/telemarketing The power and influence of IT shows its
face in the marketing services world.
Direct marketing Those who master the relationship with the customer are
naturally in line to be trusted consultants.
Futurology Research companies and those ’prophets’ going the extra
Anyone who can predict will always be close to the kingpins.
Gurus Those irrepressible individuals who probably have a book under
their belt and the confidence to advise on the big picture.
Internal communications An unpredictable workforce needs expensive tlc -
often an issue close to the boss’s heart.
Internet/new media When it affects the share price, the internet vaults
into the boardroom. Will it be accompanied by marketing agency
Media As media and distribution channels merge, media’s share of the
planning pie continues to rise.
New product development Advisors in at the beginning when there is a
need for strategic input.
Sales promotion Another consultant on the inside with the customer and
with increasing budgets.