Creative Agencies vs. Consulting Firms: Defending your position on the field
For the last decade industry commentators within the creative industry have been discussing the demarcation between creative agencies and consulting firms.
At some stage every young sports player is taught that the best form of defence is a good offense. If you keep the ball in your opposition’s territory not only do you create scoring opportunities for your team but you prevent your opposition from ever really threatening you. This is a mantra that has permeated into a number of sectors including military operations, political campaigns and now, where the traditional agency model is under threat, the creative industry.
For the last decade industry commentators within the creative industry have been discussing the demarcation between creative agencies and consulting firms. Warning, as consulting firms continue to infringe offside, acquire new players and slowly but surely gain metres, until we have the situation we are in today – consulting firms deep in the heart of the twenty two with creative agencies backed up against the try line, missing out on business that would have traditionally been theirs.
There is no denying the strength of the creative agency is just that – its creativity – and this was one point not lost amongst attendees at a BIMA breakfast. One attendee captured it succinctly, discussing how the focus for creative agencies was on the customers and making that human experience better.
“I think the way we can compete with consulting firms and also bring more eyeballs is about creating amazing branded experiences… I’ve seen a lot of the work that consulting firms are doing for clients and they are using wire frames from 2005. Consulting firms are really good at structural stuff but I don’t think they can deliver a really tangible branded experience… and that’s where the idea becomes really important.”
On the other hand, consulting firms are the grownups of the industry, steeped in business acumen and strategy. With this in mind, creative agencies need to be smart in approach. As more and more brands are focused on numbers and creativity can sometimes be found warming the bench, creative agencies need to make sure they can talk competently to both aspects.
A primary way to showcase the ability to talk on multiple levels is via the remuneration model. One of the key differences that separates creative agencies from consulting firms is that agencies sell execution, whereas consulting firms sell the intellectual property and strategy, often commoditising the execution. As a result, you end up with a scenario where agencies are trapped in an hourly billing cycle and consulting forms are able to increase revenue by operating a higher margin business model.
This is not lost on the industry either with The Marketing Agencies Association recently stating that “the current remuneration models…will ultimately drive quality, innovation and collaboration out of the industry”.
So how does this change occur? How do creative agencies add more weight to the scrum pack?
In the first instance it is about gaining better insight into agency resources and projects. An effective resource management solution will provide granular data on how projects are tracking, under and over-servicing levels and where efficiencies can be made. Once an agency has a strong grip on this detail it can start to recalibrate the services provided and determine value, rather than just basing a cost structure on how many hours were involved.
While it may seem that consulting firms have run away with the ball, we aren’t even close to the eighty-minute mark and it is never too late to launch an offensive. It is not going to be a simple or easy change and it needs to be industry wide, but it is an essential change if agencies are going to be able to compete with consulting firms moving forward. The smart agencies will understand it is not about doing more of the same, but rather evolving with the industry and in some respects, changing the ball game completely.