The World: US pitch consultants vie for $43bn business

As the market for matchmakers keeps growing, consultancies are specialising to differentiate themselves.

Al Achenbaum isn't as famous as Leo Burnett, Jay Chiat or David Ogilvy. Yet he did just as much as those legends to shape the ad industry when he co-launched the first consultancy to evaluate agencies in 1971.

Canter Achenbaum Associates was the first client-agency match-maker and, controversially, helped bring about the demise of the 15 per cent commission system. US consultants still dominate the matchmaking process and have branched out into advising on payment issues and marriage counselling for their clients, which normally include both advertisers and agencies. Ad Forum, their week-long annual get-together with agencies, takes place in New York later this month.

"Al brought objectivity to a subjective process," Mike Bogda, the managing partner of Achenbaum's last consultancy, ABA, in Dallas, says. "Agency relationships used to be brokered by head guys behind closed doors."

It is estimated that US consultants handle about 30 per cent of new business, which is no small beer. TNS Media Intelligence predicts US adspend will total $145.3 billion this year, making consultants responsible for about $43.5 billion. Consider that the world's second-biggest ad market is Japan ($36.3 billion, according to Zenith-Optimedia) and you get some idea of the US consultants' collective clout. Scott Goodson, the chief executive of StrawberryFrog US, puts it this way: "If agencies open here and don't understand how important consultancies are, they won't make it past six months."

Such a potentially lucrative market has spawned a large number of consultancies - more than 50 and counting, although only ten or so have any real sway.

The clogged market has prompted the American Association of Advertising Agencies to plan the introduction of certification to weed out consultancies deemed to be time-wasters.

Increasingly, the consultancies' response to the swelling competition is specialisation. Select Resources International, for instance, launched Select Resources University, which teaches advertisers how to manage their agencies and evaluate creative work.

US consultancies boast a generous sprinkling of MBA graduates and are characterised by an almost Germanic emphasis on process, particularly when it comes to fiscal matters. Considering the US's huge budgets, most agencies welcome rigour when it comes to how they are paid - as long as it doesn't involve the advice "cut at any cost".

Cleve Langton, the corporate executive vice-president and director of business development worldwide at DDB, is also the long-standing chairman of the AAAA's new-business committee. He reflects: "Professional consultants have made compensation fairer. They produce agreements that are fair to both sides and recognise you can't buy professional services in the same way you buy toilet seats."

Dick Roth, the president of Roth Associates, says: "Agencies have a difficult time charging more than the market price because they have a hard time differentiating themselves and establishing their value. Agencies are often under-compensated for really good work. Incentive metrics must improve."

So are agencies really underpaid for some of their work? "Absolutely," Tom Finneran, the executive vice-president of the AAAA's management services division, says without a hint of hesitation. "Advertisers' procurement people pit agencies against one another."

These procurement people are increasingly scrutinising consultants and there is a certain irony in the fact the very organisations that are trying to bring accountability to the industry are being vetted.

To British sensibilities, this might suggest process gone mad. But according to David Wethey, the founder and chairman of Agency Assessments International, US consultants consider their UK counterparts to be too "touchy-feely" and concerned with chemistry at the expense of process.

Roth backs this up, saying: "It bothers me that it's called a 'beauty contest' in England. Agencies say it's all about chemistry and how successfully the agency comes on to the client. Many agencies look good, and they all come on to you."

Wethey is philosophical; he is more concerned about the limited global outlook of his US peers. "US consultancies will cease to be so influential if they don't take a more global view," he warns.

A few US consultancies do work further afield. Jones Lundin Beals has formed alliances with R3 in Asia, among others. Its president, David Beals, speculates: "As our US-based clients seek to grow internationally, there's going to be a huge growth opportunity."

Global expansion is also on SRI's to-do list. Its chief executive, Catherine Bension, says: "In a few years' time, we hope to have identified partners in major markets around the world."

For the moment, though, there have been enough meaty reviews in the US to keep the consultants busy: this year they have helped Jaguar and BMW, among others. Langton estimates that two-thirds of the major pitches in the US are managed by consultants and he welcomes their presence: "The agency review process is a pain in the tail. If I were a client, I'd go to a search consultant every time."

THE HEAVY-HITTERS ROTH ASSOCIATES Experience: American Express, Mitsubishi, Reebok, Kraft Based: New York Established: 1986 Management: Dick Roth, president; Matthew Ryan, executive vice-president SELECT RESOURCES INTERNATIONAL Experience: Adidas, Starbucks, Nokia, Sony Based: Santa Monica Established: 1992 Management: Catherine Bension, chief executive; Russel Wohlwerth, president JONES LUNDIN BEALS Experience: AT&T, Kellogg, Motorola, SmithKline Beecham Based: Chicago Established: 1973 Management: David Beals, president and chief executive; Stan Beals, managing director PILE & COMPANY Experience: Ford, McDonald's, Avis, HP Based: Boston Established: 1987 Management: Judy Neer, president; Chris Colbert, chief marketing officer