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How to rearm the creative industry to keep the consultants at bay

Consultants are surging, but agencies can fight back.

How to rearm the creative industry to keep the consultants at bay
[Photos: Plush Design Studio/Unsplash; Júnior Ferreira/Unsplash]

Storytelling, the last refuge of ad agency differentiation, is in trouble.

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The signals are everywhere: Accenture’s acquisition of Droga5, the collapse of Barton F. Graf, even Bain’s purchase of Kantar Media from WPP. The consultant surge may not have killed Graf, but creativity has taken a hit. It’s like the demise of Pan Am in 1991, when the airline industry forever lost its romance.

Agencies mourn for Barton F. Graf but rationalize away the consultants, an error on the order of invading Russia in winter. The power of these giants can’t be ignored. The numbers are alarming:

The big four advertising holding companies—WPP, Omnicom, IPG, and Publicis—trail the stock market performances of both Accenture and the S&P 500. Over the last three years, Accenture is up 77%, and the S&P 500 up 41%. The holding companies? Down an average of 22%.

One consultant—Accenture ($124 billion)—has more than double the market value of the four holding companies combined ($52 billion). WPP and Publicis trade like utilities, with market capitalizations well below two times their book value. Accenture trades like Apple, at 10 times book value.

This is serious. Trends like this turn into seismic shifts as Wall Street moves value to those who create it.

Why are the consultants winning, and how can agencies turn the tide?

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Some say the traditional ad industry didn’t keep up with the digital revolution, that Facebook and Google took billions of ad dollars that used to go to agencies. Creative be damned, they say; These platforms grow brands by sheer force of their data.

The holding companies haven’t ignored digital, but there’s more to it than that. Bob Garfield was one of the first to call out agencies for their adherence to “we will always have storytelling.” He derided the notion, saying he wanted to tell a famous creative director, “Don’t you see the future of your business depends on getting out of the ad-campaign mentality?”

That was five years ago.

He was a visionary then and merely right today.

Here’s a brutal truth: Agencies may have storytelling, but consultants have problem-solving.

They have pushed agencies into that lower-right quadrant where undifferentiated brands go to die. While agencies focus on messaging and marketing, consultants work the upper quadrant, solving problems that obsess the C-suite.

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They dominate on several fronts.

At the highest level is future-state planning with their prowess in business and subject-matter expertise. Then there is cloud-based customer experience, with specializations in systems such as Salesforce and Amazon’s audience management platforms. Next is data strategy, where modern business industrializes Moneyball.

Last, there is traditional advertising and communications.

Consultants have focused on the first three, but now they’re moving into the last—territory that agencies have always owned.

These are the systems for building brands and creating audiences. Consultants compete in all of them and think like problem solvers. But most agencies fight on the ad front, clinging to storytelling.

It’s a losing battle, because the money is going elsewhere. Firms like McKinsey, for example, advise clients on how to set up $2 million Adobe Experience Cloud infrastructures designed to accelerate brand growth. That’s money and work that agencies never see.

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There is a way for the industry to transform, but here’s the problem: Clients don’t buy storytelling anymore. They buy growth. Until agencies get that, they will struggle.

Here are examples of four questions that Postmodern Company X will ask both agencies and consultancies in a not-too-distant future:

The future state: We’re concerned about direct-to-consumer disruption. Assess where you see us heading in the next five years and identify the most critical problems we will encounter.

Experience: We want to run our brand predominantly from the cloud within the next two years. How would you approach this and in what systems do you have expertise?

Data: Outline how you would design and implement a data strategy that will help us increase brand penetration at double-digit levels in the next three years.

Advertising: We’re allocating 25% of our brand-growth budget to traditional marketing activities. Tell us what you recommend.

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One softball question for agencies. Are the other questions outlandish? No. Billions of dollars have moved from “advertising” into these zones. Agencies won’t win requests for proposals like that unless they change. One of the reasons David Droga said he chose to sell to Accenture was because they could build things he couldn’t, and they understood things he did not. He also said that he wants to build businesses, not brands.

This is from one of our era’s creative icons.

To compete, agencies need a new business model. Success requires focusing creative energy on advanced problem-solving, giving up the fantasy that storytelling is supreme, and burying the ad-campaign mentality. It will mean new structures that are more nimble, more network-based, more distributive. But think about it: Wall Street might love disrupting the holding company model.

These are the essential strategies for how agencies must realign to emerge anew as a creative solutions industry. It’s the only way to retake the initiative from the consultants, who can buy creativity but can’t produce it.

Advertising need not fear the consultants. Consultants should fear the creative problem solvers they don’t see coming. But this only happens if agencies cure their addiction to storytelling and arm themselves with a new arsenal of weapons.


David Gutting is a senior vice president and director of strategic projects at Barkley, an independent creative and innovation company headquartered in Kansas City, Missouri. 

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