Opinion

Consultancies acquiring agencies makes a lot more sense than you’d think

The Monkeys and Accenture, The Works and RXP, PwC and Thinkerbell: consultancies are gobbling up agencies by the bucketload. It's a trend that at first seemed unthinkable, but one that could actually make a lot of sense, explains James Sykes.

‘Where there’s muck there’s brass’ is how a blunt Yorkshireman says there’s money to be made in the tough jobs others would prefer to avoid.

These wise words apply to the mucky middle ground between business consultants and creative agencies which is all too often ignored in the polemic debate on agency acquisition and its hypothetical train smash of cultures.

The Monkeys was famously bought by Accenture earlier this year

This mucky middle is a title fight. In the blue corner, efficiency strategies and enterprise design make consultancies a safe bet for the C-suite.

In the red corner an assortment of creative agencies fidgeting and making all the noise. The stoush is over client fees and big data.

At the moment, it looks like consultancies are winning hands down, with half of Australia’s $10bn revenue dwarfing the 10% creative agencies get according to IBIS.

The smart money is looking for a new formula, one with creativity and reinvention scattered through the whole advisory and services mix. Clients deserve a killer combination of great business minds plus fertile imagination all accountable and reputable at boardroom level.

How do we navigate this middle ground, wrestling its value to everyone’s benefit? Perhaps a good start is finding more people with a healthy perspective from both corners of the ring. People who marry different disciplines with the principles of fertile creative thinking.

They’ve experienced commercial pressures client side as well as gleaning the arts of persuasion agency side. This makes them well rounded and lends them invaluable breadth.

Innovation and the design of seriously good products and services is iterative, requiring more than information architecture, functionality and the capability abundant in the blue corner.

That work is without doubt brilliant, but perks up another notch once those in the red corner with years grounded in semiotics, visual codes and human behaviour get involved.

The same goes for communication ideas and wisdoms like balancing colloquialism and simplicity to make a brand language special. Those who’ve grown agency side have this in their bones.

The near demise of Airbnb before someone remembered the importance of sumptuous high-res photography in the selling of homes to humans is good illustration of this breadth and perspective in action.

Airbnb hit the nail on the head

None of this is lost on consultancies who’ve acquired agencies and recruited very bright and experienced individuals from agency side. I’d expect the brand strategies and operating plans written for clients are already packed with far greater insight and texture.

But what puzzles me in this mucky middle is what goes on at the margin where advising ends and doing begins. I’m puzzled because creative and agency people are compelled to do stuff, tinker and make or change things. It’s in our nature.

The more talent consultancies acquire, the more executional tendencies hitch a ride with it. Good people can’t help being excited by good ideas, it’s where the kick in their step comes from.

Industry can’t cut its way to success forever, and the ‘risk mitigation’ of consultants has its perfect partner in the ‘growth fixated’ agencies with their bias towards making things.

The two are fundamentally complementary, can learn from each other, cross pollinate and get through this mucky middle. Cheering them on are clients who need to turn a rigorous strategic review into an outcome, by making the engaging stuff that conjures a result. Consultancies and agencies can share the spoils, business will prosper and everyone’s a winner. Looking back, it becomes just another restructure.

The nightmare is more of a zero-sum game, creative agency margins continue to slide and the quality of thinking with it. Where will all the creative butterflies go when that happens? If intellectual capital shrinks it means less imagination in marketing at large and less benefit for all.

Consultants should pursue this agenda bravely, investing in talent with the breadth and experience required. They should embrace its impact on their internal culture and thrive on the value it provides their clients.

By raising creativity’s value in their business, and at board level among their clients, agencies also stand to gain as there’s more brass – and less muck – to go around.

James Sykes was most recently the global head of innovation and design at Beam Suntory Spirits. He also happens to come from Yorkshire.

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