Opinion

The consultancies remoulding the Melbourne market

The Melbourne creative agency market has undergone a rapid transformation over the last few months, thanks in large part to investment from major business consultancies. Mumbrella’s Abigail Dawson looks at how these new entrants to the market will turn established orders on their head.

The poaching of four of McCann’s top executives by business consultancy Deloitte Digital has sent another shockwave through the Melbourne creative agency scene – and sent the message to established players they need to brace themselves for a challenging 2018.

While Clemenger BBDO has emerged as the undisputed creative leader in the market in recent months, new agency launches and staff poaching from the major business consultancies are threatening to create a marketplace some traditional players will not be able to compete in.

PWC, Deloitte and Accenture have all made moves which will have major implications, just in very different ways.

Magic and muscle – PWC

PWC’s play is multifaceted – the acquisition of a stake in newly-launched creative hot-shop Thinkerbell and the appointment of Melbourne powerbroker Russell Howcroft to head up its CMO consultancy.

The “measured magic” agency, Thinkerbell, made headlines based solely off the huge reputations of its founders, Adam Ferrier, Jim Ingram and Ben Couzens, who abruptly exited one of Australia’s most respected independent agencies, Cummins and Partners, earlier this year.

Consumer psychologist and strategy gun Ferrier’s partnership with the creative duo behind Victoria Bitter’s Melbourne Symphony, Schweppes’ ‘Burst’ Commercial and ‘I bought a Jeep’, launched with the promise of adding real marketing science to top commercial creativity, a combination which will inevitably turn some heads.

Certainly it turned PWC’s head very quickly, with the consultancy taking a small stake in the agency just two months after it opened its doors, and before it had launched any work.

But while the agency has three of adland’s most respected and talented creative leaders, it is still a fledgling proposition in the market. It is yet to name a managing director (although former OMD Melbourne boss Margie Reid has been linked with the role), and its first work for 13CABS did not exactly set the world alight.

PwC’s investment in the creative x-factor began by bringing in former GPY&R boss and Gruen regular Russel Howcroft as its chief creative officer last year, a significant investment by the consultancy in more ways than one.

Howcroft is a major power-player in the Melbourne market which thrives on old-school connections, handshakes and being on the board of the right football club. His presence will get the consultancy into even more board rooms, and his reputation gives them credibility when suggesting creative solutions to traditional business problems.

And that connection could pay hugely for the ambitious crew at Thinkerbell, as they hunt for the big brand work they can really establish a reputation on.

Accenture cash encourages monkey business

At the other end of the scale is the launch of The Monkeys into the Melbourne agency scene following a cash injection from its new parent company Accenture.

The Monkeys, which already had an established brand built on creativity and big ideas – came in swinging, landing large accounts before even securing a local office space, or announcing any hires.

They will be taking a more traditional approach and challenging competitors based on an enormously successful creative track record for brands like Qantas, Meat & Livestock Australia and Telstra.

The agency also disrupted the established order by nabbing two top Clemenger staffers, managing director Paul McMillan and planning director Michael Derepas, as part of what could be seen as an aggressive launch.

Paul McMillan was nabbed from Clems back in August

But while The Monkeys has won accounts like Australia Post, Crownbet and Holden Equinox there is still a vacant executive creative director role there – with Grant Rutherford and Ant Keogh both rumoured for the role.

Filling that ECD role with the right person will be vital for the agency translating its DNA from Sydney to the new office.

Deloitte splashes the cash

Then there was today’s announcement that Deloitte had gutted the top tier of McCann Melbourne office to launch its own creative and media brand offering.

That raid on McCann has simultaneously ripped the heart out of a major player in the Melbourne market scene, and created a new challenger in the market.

Just four years ago the agency was the runner up for agency of the year at Cannes Lions thanks to the highly-awarded Dumb Ways to Die campaign – which the now departed managing director Adrian Mills was the group account director for at the time.

The agency fell victim to its own success with global and other agencies coming in to pick off some of the talent behind that campaign, including Mills himself who had a brief stint further down St Kilda Road with Clemenger in 2014, before returning to lead and rebuild the Melbourne office with a media offering.

Like Howcroft, Mills is one of the best account men in the game and a regular on the industry scene, giving the consultancy an in with Melbourne’s old school network.

Similarly Matt Lawson is a very highly-regarded creative, adding instant credibility to the new offering, while Justine Mills brings years of media agency experience and David Phillips a long background in brand strategy on the marketer side, creating a well-rounded foundation team.

And that is something Deloitte needed, given it has until now limited its acquisitions to digital shops, and not been able to nurture a creative reputation off the back of it.

With the hope of positioning itself as an “experience agency” Deloitte has its own views on the competitive market, arguing the creative boom of consultancies gives talented creatives more opportunities at its fingertips.

The new battleground – talent

But that boom also creates challenges, most obviously in the realms of talent.

Quite clearly the management consultancies have deep pockets – far deeper than any agency group. And that has already manifested itself in a withdrawal of some top people to them.

Agencies were traditionally able to argue to clients and the press that consultancies were not able to deliver on their creative ambitions because they could not attract top talent. That clearly is not a position that they can maintain any longer.

And it has also left gaping holes for some of the top players in the market to fill.

Clemenger for instance has seen some top talent exit in recent weeks, and will need to bed its new management team – Gayle While as deputy CEO and Simon Lamplough as managing director – in quickly if it is to retain its crown as king of Melbourne.

Gayle While is Clemenger Melbourne’s new CEO

And Ben Lilley now needs to find an entire top management team for his flagship Melbourne office, and work hard to ensure established clients aren’t wooed by others in the meantime.

Thinkerbell and The Monkeys aren’t the only agencies seeing potential in the Victorian capital, with the likes of The Hallway and Mercerbell following suit and throwing themselves in the mix for some of Australia’s most iconic brands.

Meanwhile, Saatchi & Saatchi has beefed up its account services team to accommodate Toyota’s move to Melbourne, which will also see The Media Store – Toyota’s media agency of record – opening shop in Melbourne to cater for its main account.

That long-standing relationship, 20 years to be exact, saw The Media Store recruit the former commercial director of The New Daily and ex-general manager of Ten in Brisbane Stephen Leeds to head up the agency.

All of these openings and launches are stretching the talent pool very thin. When supply is limited, price goes up, meaning agencies may well find themselves priced out of the market in some areas in the fight for top talent against the deep pockets of the management consultancies.

What now for the established players?

It’s not all doom and gloom for agencies however, with Melbourne already playing host to a few agencies which have truly differentiated themselves in the market.

CHE Proximity has taken the data-led approach to resurface as a force to be reckoned with, creating some impressive results for a slew of clients. If they can improve the creative product further still they will be a real force to be reckoned with.

Meanwhile TBWA has been flying the flag for social issues with some leading cause marketing for big name clients like ANZ.

And of course Clems is still the one to beat in market, despite its recent top-tier changes.

But there are a number of other network agencies that will need to find a way back to relevance if they want to compete with the new world order.

Y&R, DDB and Ogilvy are all agencies which have enjoyed success in recent years, but have unfortunately for them, fallen away from the headlines and lost that vital element for creative agencies – buzz. And that buzz is what helps attract real top-tier talent and clients.

So to 2018…

Melbourne is evidently a vital market to consultancies, playing host to a number of Australia’s most iconic brands, and is a hotbed for top creative talent.

It’s almost inevitable the state of flux in the market will see some changes to accounts with clients having their heads turned by new entrants, who will be able to offer some very favourable rates thanks to their big-money backers in order to get runs on the board.

While these changes will threaten the existence of a few, they also promise to have an invigorating effect on the work we see coming out of Melbourne, with so many players looking to establish their reputations.

I predict the next 12 months will see a few people make real names for themselves.

In 2012 the question was asked, is Sydney leaving Melbourne for dead? Now the question is, is Melbourne hanging Sydney out to dry?

Abigail Dawson is a reporter at Mumbrella.

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