How consultancies buying creative agencies will change the life of CMOs
As consultancies start to acquire adland, Uberbrand's Dan Ratner considers what it means for the CMOs of the future.
Consultancies are buying ad agencies (or in the case of Deloitte, nabbing their staffers) in a trend that seems to be gaining momentum. Some argue it could be due to an increasing hunger for creativity in consultancies that are tasked with helping business leaders take their organisations forward. However, when all the focus is on the creative, what happens to the strategy?
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To a large extent, much of this change is being driven by the enterprise’s chief marketing officer (CMO). These executives are being squeezed at both ends: while they hold a more strategic position in the organisation than they have in the past, they’re also still tasked with tactical campaigns.
The CMO now looks after organisational strategy, internal alignment, advertising, social media, lead generation, sales and more. There is enormous pressure on CMOs to directly affect the bottom line and the tenure can be short for a CMO who’s seen to be too slow in delivering results.
This shifting dynamic is also changing the relationships between the CMO, their partner agencies, and their staff. The CMO needs to simultaneously manage internal alignment strategies with long-term goals alongside tactical campaigns to hit quarterly sales targets. Add to this external pressure like new competitors entering the market, and the CMO role now acts as a lynchpin for the entire company’s performance.
It’s a lot of pressure for one person and their team (if they have one), so CMOs are increasingly relying on agencies to provide strategic thinking as well as creative input. In the case of advertising agencies, this goes beyond their original remit, which is to create a message, select a channel, reach a buyer and convince them to buy.
Now, CMOs are asking their ad agencies to deliver that tactical campaign on one hand, and an internal change strategy on the other. And, while you can measure the success and return on investment of an advertising campaign, measuring organisational change is much harder.
The blurring of the lines between strategy and creative falls to the agency to clarify. But most agencies aren’t equipped to deal with this dichotomy.
Plenty of advertising agencies say they’re transforming brands but, in many cases, this isn’t backed up by real strategic strengths. It’s more of an identity crisis with no clear resolution in sight.
In the past, branding was a part of the marketing remit. Now, marketing is seen as part of branding and companies are looking to branding agencies to help them achieve their strategic and tactical objectives. But when it comes to developing the creative, the process needs to be led by strategy rather than creating ideas for their own sake.
When CMOs can’t compartmentalise the various demands the business is making of them, they look to consolidate with a single agency. That can be a mistake, since it encourages agencies to lay claim to skills and strengths they don’t necessarily possess. These CMOs might be better served using a group of agencies, each with a specialisation in a relevant area.
The key to making that approach work is to have a strong strategy in place, from which all creative tactics can be developed. It’s important for agencies to remember that simply saying they’re strategic doesn’t make them strategic. It’s not useful to ask a branding agency to produce a creative idea and a creative agency to provide a strategy. That lack of precision in who does what often means the resulting campaigns fail to deliver strongly on any of the metrics.
This is what’s driving the rash of agency acquisitions we’re seeing at the moment; agencies are aware they can’t deliver everything while consultancies can see an opportunity to bring their strategic capabilities to bear. But, it could be argued, the competing imperatives of these two types of organisations could make it difficult for them to mesh successfully. Ad agencies work on volume, while consultancies must deliver quality.
Branding agencies can help straddle the divide if they’re authentically strategy-led with strong creative competencies.
These agencies can help CMOs manage the right mix of specialist agencies to achieve all of their goals, from running ads to help hit the monthly sales target to managing an internal communications campaign to boost employee engagement.
Agencies need to understand their own strengths and core competencies, and avoid killing their own culture in favour of a hybrid approach. This means communicating with potential partners and setting clear parameters for working together.
By cementing strategic partnerships, these agencies can present a united front to the CMOs who are, ultimately, looking for simplicity and strong results.
Dan Ratner is MD at Uberbrand
I’m don’t think CMO’s look after organisational strategy or internal alignment, there are other positions in a business who are more responsible for that (CSO, COO, CEO, HR etc). The big advantage the consultancies have is they sit outside of a marketing function and have a more holistic view of the business and where it’s heading. Something very few “branding” agencies in Australia do very well (and potentially why many of the consultancies are taken more seriously by the C suite).
As we move further towards an experienced based economy, where how brands are experienced matters more than what their advertising or marketing looks like, the game becomes more open. Consultancies are trying to evolve into a new way of operating to match this, but a lot of agencies (brand and advertising) appear to be championing the same stuff they have for a while. Which in the future wont cut it. The race is on…
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@Just saying’ – I agree that organisational strategy and internal alignment are rarely, if ever, the true (i.e. not titular) responsibility of CMOs, and that client advertisers value the more holistic third-party view of management consultancies – but from whence has your ‘new’ concept of ‘experienced-based economy’ sprung?
Whenever were brands just the sum total of their advertising and marketing?
As loathe as some agencies and CMOs are to admit it, advertising and marketing as creators of brand perception have always sat on the very bottom of the totem pole from a consumer’s perspective.
Personal experience eating, drinking, driving etc a service or product has always driven the fundamental view of, and response to, a brand, followed by WOM, then arguably, perceptions generated by the earned media, both good and bad.
Ironically, your notion that brand perceptions are, or were once, driven by advertising and marketing reflects a certain insularity or myopia that excludes any non ad-land influences – precisely the blinkered perspective being exploited by the business consultancies, as you rightly suggest!
If the only thing they need to do is point out the bleedingly obvious to CMOs, then i suggest that they’re not encroaching on agency territory but simply occupying the free land which opened up for conquest.
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@sventana – Sorry you misunderstood. I never implied that the way brands build equity through experience was ‘new’. Agreed it’s been happening for a very long time. It’s more that advertising in the past has played a much larger role in doing this, but is becoming increasingly less important today. I can’t remember the last time I heard someone say ‘have you seen that ad with the …”.
The consultancies are also starting to understand more about how important it is to create an experience, as opposed to things like improving operational efficiencies to grow margin.
It is very much an evolving landscape at the moment and those that shift their thinking first are likely to benefit the most.
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CMO remit varies across company and sector, its hard to generalise. But safe to say Marketing’s scope to influence growth is expanding. Of the executional agencies I agree Branding shops are ‘more neutral’, but agencies are all specialists, they’re on the tools, its how their money is made.
The new opening is for those who ‘get the full scope of a business’ and what CMO’s face, but to say the big 4 consultants will grab it all is a tad flat earth. Not every client has a ton of cash or needs to boil their ocean. Methinks there’s room for all manner of consultancies to rock up and have a go.
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@just sayin wrote ‘I can’t remember the last time I heard someone say ‘have you seen that ad with the …’
This is a key statement. No matter how much you spend on production and then mass broadcast; if the product is a lemon people, today, in a social proofed world, will not buy it. Apple will spend a lot, however the product is backed up. more so is the belief in their brand, which has taken decades to curate. Advertising plays a part, however inclusion, experience, fashion and being locked in and worried about moving over to Android, is a big factor people do not change.
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