As consultancies like Accenture and Deloitte muscle onto agency turf, shops are turning the tables with new-practice groups that supply from product-portfolio-management advice to recommendations on corporate reorganizations.
Publicis Groupe’s Starcom MediaVest Group a couple weeks ago launched marketing consulting brand Zero Dot simultaneously sibling Zenith soft-launched a media-focused consultancy called Apex. They join months-old experiments at Interpublic Group digital shop R/GA and WPP media-agency network GroupM to make use of Threepipe that can offer higher compensation rates than advertising while reeling in new ad business.
“Business is great this past year, which tells me there’s an appetite,” said Carla Hendra, global chairman of Ogilvy Red, a 3-year-old consulting group within WPP’s Ogilvy & Mather agency network. “Clients are seeking strategic help.”
Red, that has a dedicated team of 25 executives and its own P&L, has grown revenue 40% with assignments in New York City, China, Brazil and the U.K. They recently helped a worldwide client execute an 18-month portfolio revamp, and numerous client requests came from private-equity firms searching for insight into which brands to remake or invest, she said. The practice is likewise considered a marketing-business-builder at Ogilvy. “Whenever we sell $1 of consulting work, down the road it can cause $3 to $4 dollars of communications work,” said Ms. Hendra.
“It comes with a halo effect. Everything we’re doing is driven off that consulting,” said Rosetta CEO Tom Adamski, who noted that about 50% from the shop’s total revenue originates from clients that work with both consulting arm as well as the larger agency.
Data and analyticsErnie Simon chalks the growing interest in this kind of try to marketing companies getting good sophisticated in data and analytics, which are increasingly being utilized to help you shape larger business strategies. Mr. Simon left his chief strategy officer post at Omnicom Media shop OMD to produce a consulting practice within WPP’s GroupM in May. At that time, he noticed chief strategy officers fielding more questions on business processes and structure beyond traditional brand strategy, such as “focusing concerning how to make analytics or data work or turn media into a competitive advantage.”
RG/A’s “business transformation” group includes a dedicated staff of 12 serving about 10 clients globally and represents huge amounts of money in revenue “we wouldn’t experienced otherwise,” said CEO Bob Greenberg. He wouldn’t disclose names of clients, but said the group recently helped one choose which companies are worth expanding to diversify revenue. For some individuals, the group is concentrating on IT, logo and product-innovation strategy. “We saw competition from Accenture, from McKinsey and from several of the branding agencies [like Ideo],” he explained.
SMG’s Zero Dot is more marketing-centric compared to those comparing themselves to business consultants, but the shop continues to be labeling itself like a consultancy mainly because it looks to 52dexspky clients facing atypical brand challenges. “We want to able to work using our top 10 to 20 clients within the next two years,” said SMG CEO Laura Desmond. SMG clients including Kevin George, Jim Beam CMO, and Sundar Raman, marketing director for Procter & Gam-ble The United States Fabric Care, are actually onboard.
“We wanted [someone] to offer a purpose that’s more consulting than typical agencies yet not within the [traditional] experience of consulting,” said Mr. Raman of your integrated marketing strategy the audience conceived due to its Gain brand to speak some great benefits of social networking to his distributor sales force.
When a chief strategic officer advises inside a consulting capacity in an agency, that executive is normally billed as overhead, based on Ernie Simon, president of GroupM Consulting Services. But in a dedicated agency consulting group, compensation takes the shape of fixed project fees and higher rates in contrast to the hourly fees charged by full time employees at agencies. Consulting may offer significantly wider margins — some agency execs claim greater than 10 percentage points higher — in comparison with standard agency work. R/GA’s year-old “business transformation” group runs using a compensation model that appears much more like that of a consultancy and is also budgeted like a non-marketing expense by clients, said CEO Bob Greenberg.