The prospect of being able to buy media from a management consultancy that already has creative and digital know-how won’t be happening anytime soon at Volkswagen.
That’s according to head of communications and media planning Oliver Maletz. He warned the likes of Accenture and Deloitte not to compete head to head with media agencies, admitting that he wouldn’t be tempted to jump ship.
His fear being that, even if a management consultancy did buy an agency, it would still be lacking the expertise it would get from one that solely committed to providing that service: “I don’t think they [consultancies] should [invest in a media business],” Maletz continued.
“I’d rather talk to an agency that’s [comfortable] with data but can balance that with their media expertise. Even if you look at some of the other Omnicom [agencies] like Hearts and Science, they’re going in that direction. I don’t think a McKinsey or an Accenture or a Deloitte or any one of those would have the credibility to run as an agency beyond the fact that I think they’d be extremely expensive. I don’t think they’re used to operating on those margins that the agencies are operating on.”
Coming off the back of an 18 month review that ended with PHD winning the company’s $3bn media business, Maletz is arguably one of the most knowledgeable when it comes to the capabilities of he world’s biggest agencies. Yet “it wasn’t even a thought” to include a consultancy on the pitch, a statement that belies his view on whether these businesses can deliver an integrated approach.
Granted, the media chops at consultancies pales in comparison to the investments they’ve made on the digital and creative sides in recent years, but what expertise they have been gobbled up has been enough to put agency bosses on alert. Accenture’s decision to push for programmatic budgets with the launch of a trading desks offer is the most recent example, though it would seem the possibility of any of the consultancies acquiring an agency to swell their interests is a remote one.
“We think it’s less likely that consultancies will buy existing media planning and buying businesses,” said Tristan Rice, a partner at consultancy firm SI Partners
“Apart from the lack of media independents available to buy, we think their interest is more likely to be in partnering with advertisers to provide the technology solutions for more efficient, transparent media placement. In other words, they are more likely to leapfrog the media agency business model and provide a new solution to brands, rather than setting up in competition with the current agency model.”
Should the market twist in this direction, those potential partnerships Rice refers to would be predicated on overcoming wider trust issues that have engulfed the industry in recent months. There’s growing concern among ad agencies as to how long consultancies can continue to objectively audit an agency’s media as the advertising and digital sides of their businesses continue to swell. For its part, Accenture has said there are sufficient divisions between its different strands to ensure that its recommendations can be trusted.
“That’s [media] is not their [the consultancies] core business,” asserted Maletz. “That doesn’t mean to say that we wouldn’t use a consultant for all the [pitch] process because we just don’t have the time or the energy to go through all of that. Plus we need someone to be a little bit more neutral to guide us along the way, especially with a an eight brand global $2.5bn pitch it gets a bit challenging to do it.”