Jerry Buhlmann: Consultants are having an impact on ad industry, but not in media

Denstu Aegis Network boss Jerry Buhlmann has admitted that Accenture and Deloitte "are having an impact" on the ad industry - but not in media planning and buying.

Jerry Buhlmann: Consultants are having an impact on ad industry, but not in media

Buhlmann (pictured) said management consulting firms are having "success" in advising clients "upstream" on how to improve and restructure their marketing services arrangements.

Consulting firms were mainly involved in "managing pitches and advising clients around pitches", rather than media planning and buying, according to Buhlmann.

He played down Accenture’s most recent move into media with the hiring of Nikki Mendonça, previously president of OMD in Europe, to head interactive operations as "not material in the context of the hundreds of thousands of people they employ".

Buhlmann went on: "What I do see is where management consultants are having an impact is they are advising clients on how they restructure their businesses in relation to marketing services.

"If you looked at the different divisions of a business like Accenture or Deloitte, they do have some success at growing around that consulting piece, which is to some extent more upstream, rather than the decisions about which agencies to use.

"That is growing and clearly that does have some impact on the [marketing and media] business overall, but I don’t see them moving materially into media planning per se."

Buhlmann was speaking at parent company Dentsu’s first-quarter results when he took part in the Japanese group's earnings call for the first time.

Dentsu Aegis Network, which operates outside Japan, is focused on media, technology and data – unlike most of the other big six ad agency holding groups, which also have large creative businesses.

Buhlmann dismissed a suggestion that clients want media, creative and other disciplines to come back together.

Publicis Groupe has talked up its "Power of One" strategy and Accenture Interactive has predicted the ad industry will be dominated by "cagencies" that combine creative and consulting.

Buhlmann said: "There’s always talk in the market about whether the market rebundles and I see no evidence whatsoever of rebundling."

Most clients do not want an "overall solutions pitch where they want everything in one supplier", according to Buhlmann.

He acknowledged there is "some evidence of a trend towards integration", with a holding company bringing several disciplines together in a bespoke "solution" for a client.

However, he said: "I’m not seeing it materially affecting the pitch environment where there is still significant discrimination between different specialisations and many clients are also looking to ensure they get the best services from whomever provides it."

Buhlmann has seen "a significant increase" in media-buying reviews in 2018 – with about twice the volume of last year and WPP and Publicis Groupe defending the most business.

"This is a long-predicted year of media pitches" where a lot of contracts are up for renewal, rather than his competitors facing more pitches, he said. 

Dentsu Aegis Network has already defended the bulk of its own accounts that it expects to come up for review in 2018, notably Microsoft’s global media account that it has retained.

Buhlmann maintained that brands are not increasing the amount of media that they buy directly from media owners.

"We see no material change in terms of clients going direct," he said. "In general, agencies still add very significant value to clients and most clients recognise that."

Dentsu Aegis Network reported 2.2% organic growth in the first quarter – better than some rivals such as WPP, particularly in north America.

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