Fear is running rampant through the creative industry. IBM has recently bought the digital agencies Aperto and Ecx.io. Accenture has taken over SinnerSchrader while McKinsey has snapped up Lunar. Meanwhile, these IT and management consultants are being listed by Gartner as digital agencies. So, are consulting firms muscling in on agencies' turf? We have previously looked at how to efficiently manage collaboration across parties in disruptive digital customer experience transformations, but here we will look at why these collaborations are necessary in the first place.
There is indeed a radical change driving these take-overs; it is no longer just about creativity. Today, IT plays a central role in marketing and thus digitisation has prompted the demand for marketing services to undergo a fundamental change as well.
The underlying challenge lies within the fact that digitisation is questioning their clients' business models. Therefore, it is more about introducing completely new products and services to the market. Sometimes this will entail fundamentally different processes for the provision of service. It may also result in the need to change the company’s structures and procedures. The field of management consulting as such is complex and, in particular, disruptive projects do not only require a high level of expertise regarding process modelling and re-organisation but also a profound knowledge of the industry itself.
How do agencies need to change?
In the future, agencies will continue to provide ideas as well as their creative and media-related execution. Yet the weight and complexity of this task, particularly the solutions’ required IT scope, will shift. It is not about thinking within the framework of a particular campaign anymore, but designing an effective and permanent dialogue with the customers. This is necessary because digitisation is characterised by the engagement of the customers, their accelerated interaction and the high data availability.
Those agencies have a future whose value proposition, profit model and organisational structure comply with these factors.
In addition to that, the expectations advertising companies place on their agencies are shifting due to digitisation in particular. Digitisation causes advertising companies to pay heed to the sales and customer service expertise of their agencies in light of the connection between interaction and transaction and continue to pay attention to their capabilities in real-time communication and multi-channel management.
An agency's expertise in customer analytics entails the requirements concerning organisational structures, which results in the demand for agile project management. The availability of data determines the profit model of agencies as their measures are easier to attribute to the success in communication which, in turn, enables payment based upon success.
In the future, it can be expected that advertising companies will increasingly hand over coordinating tasks to agencies. Similar to the concept of a lead agency, agencies will, therefore, be responsible for different communication providers.
Since these specialists cannot be provided constantly, it would be beneficial to look towards outsourcing which will be organised by the creative general contractor. This will feature an extremely streamlined, value-added model that only covers planning, consultancy and creative idea. The general contractor will leave its implementation to its network partners. Of course, this would necessitate an infrastructure that is designed to guarantee external agents quick and easy access to all relevant information, documents and systems, removing said access upon project completion.
This, in turn, will require workforce management that will make it possible to fill a globally operating team with the right people and create a virtual work environment they can access from anywhere.
Why should agencies collaborate with management consultants?
Shaping the change wrought by digitisation is a strategic task. The interaction with customers must be designed and implemented, a topic in which agencies have the upper hand. However, behind this superficial need lies, amongst others, the conception of new workflows for the provision of services, the accompanying IT processes and sometimes even the complete restructuring of the advertising company itself.
These tasks typically fall to business consulting firms. However, experience shows that re-organisation usually fails because of poor change management. One answer to this would be the use of agencies to organise internal communication.
Furthermore, agencies cannot carry the necessary investments for the building up of IT knowledge and skills themselves. Vice versa, it would be difficult for a business consulting firm to plausibly sell itself as a creative agency.
Combining the strengths of both partners it would be possible to create user-orientated services together with the client that look sexy, are fun to use and work perfectly right from the first point of contact, over to placing an order and through to after sales.
For companies looking for the right partner in the field of digital transformation in marketing, the following recommendations can be deduced:
- Can your future partner provide a plausible assessment of the digital potential of your company?
- Does he have experience in process and organizational consulting as well as in their concrete, technological implementation?
- Do you trust his creativity to develop innovative services with you that offer your customers real added value as well as a branding experience?
- Is your partner able to manage complex cross-divisional projects and integrate their employees into an agile approach?
- Does your partner know how to lead your employees to change their thinking by means of professional change management?
- To what extent has your partner crossed the stages of digital transformation? Is there a Chief Operating or Chief Digital Officer?
To sum up, the collaboration between advertisers and consultants releases a lot of creativity, precisely because the partners are so different. Digital transformation and marketing needs both heart and mind, the zany and the traditionalists. Now it is all about entrepreneurship!