Creative digital consultancy Deloitte Digital has joined the chorus of management consultancies in Australia by urging advertising agencies to work with them - rather than seeing consultancies as competition.
Senior executives at PwC, Accenture Interactive and KPMG had previously told The Drum they are not trying to displace agencies or steal talent. They have urged agencies to stop worrying about the emergence of marketing services within the consultancies and instead focus on doing their jobs.
These claims were made in spite of consultancy intrusion, chiefly Accenture’s acquisition of Australia’s best creative shop The Monkeys, KPMG’s poaching of Publicis Australia chief executive officer Andrew Baxter and ex-Droga5 exec Sudeep Gohil, and PwC hiring ex-Y&R head Russel Howcroft to work with its ad agency investment, Thinkerbell.
Even though it plundered McCann Melbourne and brought over its senior leadership team, Deloitte stressed that it is not here to be placed directly head-on with ad agencies. It added that the world ‘does not need another ad agency or another creative agency’.
Consultancies, unlike agencies, do not have the mileage to operate at low margins with low revenue returns.
“The consulting model is very much, sell what you're good at, and then utilise other expertise. I think agencies often pretend that they are deeper in skill than they might actually genuinely be and that is to everybody's detriment,” Adrian Mills, partner, creative, brand and media at Deloitte Digital tells The Drum at Spikes Asia 2018.
“But if we work with each other to get the best out of each other, then the results will be a better product, and more trust, and happier people, happier careers and healthy children.”
Mills’ fellow partner, David Phillips, points out Deloitte is after a different type of work compared to traditional advertising agencies, as it focuses on clients who work at the C-Suite level. “90% of the revenue that flows through advertising agencies, the likes of us, The Monkeys and KPMG don't wanna go near it and I think that's fine for us.”
However, when it comes to having the clients’ best interests at heart, Philips, who was part of the ex-McCann leadership team with Mills, asserts Deloitte has a better model compared to agencies. This is because when Deloitte offers advice to a client, there needs to be a significant burden of proof. Both he and Mills can go to jail for misleading clients.
This would never happen if an agency gives bad advice, he points out.
“I think that the type of advice, and the rigor through which we have to go through to get to the position to recommend to a client, will always be different from advertising agencies, because they just don't have those people, and they just don't have that requirement for proof that we do,” says Philips.
Nodding his head, Mills adds: “Our default position is to try to build appropriate capability in our clients, whereas the agency model is very much, take as much from the client as possible, and that is a philosophical schism that cannot be reconciled yet.”
While there have been many that have expressed doubts that consultancies can create a creative culture, Mills argues that this line of thought shows the misunderstanding of creativity in general because creativity, in a business context, is not something clients could not have done themselves.
“When you throw all of the ingredients and all of the firepower that Deloitte has, not just in Australia but globally, you should be receiving a product you that you never knew could exist before. I think while agencies like to say that they don't make ads, they solve user problems, I would say that Deloitte is in a far better position to make that kind of claim,” says Mills.
“People who are cursed with creativity, really only had advertising as a solution to have a successful professional career. I think that the work they were doing at Deloitte will shine a light on another opportunity.”
According to Philips, both of them, together with Matt Lawson, the principal and chief creative officer at Deloitte Digital, realised after a whole career in ad agencies where everyone went to similar schools, had the same background, sounds the same, has the same interest, and follows the same cultural sub-trends, there is basically a homogeneous group of people that working in agencies.
A lot of people were telling them that Deloitte did not have a creative culture, adds Mills, and had the ‘prototypical grey suit kind of consultancy’ culture.
“We came to Deloitte, we had people from every single different possible background with every different type of education, and the level of actual diverse, true creative thinking in that place; not about making funky ads but actually about true things that change and have impact, is far advanced of what you can get from your typical top agency,” explains Philips.
While there were over 100 creative professionals at Deloitte when the trio first joined, they were not organised in a way that a creative agency might have to get the best out of them, says Mills. “The truth could not be more opposite. It's actually a thriving creative culture, what it really was missing was an understanding of brand and ideas”
Deloitte has gone for the unconventional creative approach instead, which is super collaborative when compared to cross-function teams working in silos. Unlike an ad agency which might have a team that consists of a creative director, copywriter and art director, a cross-functional team at Deloitte might exist of someone who is a specialist in virtual reality, spacial design, motion graphics, data and campaign ideas, as well as engineers.
“From a creative perspective, we have Matt Lawson who's the chief creative officer, and he was number five ECD on Big Won rankings this year, and last year he was number one copywriter? And we've got Charles Baylis, who is the number three rank copywriter on the Big Won report at the moment,” Mills explains.
“We also just hired a guy called Gustavo Vampré, who was the creative director for the Palau Pledge campaign, so we have got some pretty good guys, but then there's a lot of talent that probably hasn't been quite as good at self-promotion.”
“We are very close to being the largest creative team in the country.”
Not satisfied with disrupting creative agencies, Accenture took on the media agencies when it announced in May it was launching a 'Programmatic Services' unit, which will offer programmatic consulting and in-housing, media strategy and activation capabilities, as well as adtech implementation and support.
According to the consultancy, the consulting and in-housing offering would ‘help advertisers take back control of their media capabilities’ while the media strategy and planning service promised to ‘better serve audiences’ and run ‘transparent’ media campaigns for clients who are facing adfraud and transparency issues.
Accenture’s decision to move into media buying caused a backlash, with many calling it ‘a direct conflict of interest’ and questioning how its new unit could operate independently of its existing media management business, which audits media agencies and runs pitches.
Deloitte has no plans to follow Accenture down the programmatic route and will not touch it with a ten-foot pole, citing the debate around transparency in media is one of the key reasons. It also does not wish to understand or know what the trading desks are trying to do.
“I wouldn't have done it if I was at Accenture, I'm sure they had a strategy for doing it. A lot of the work that we do is helping clients redesign their media offering,” says Phillips.
“If we had a programmatic offering we were trying to sell to at the same time, it is a massive conflict of interest, we need to stay arm's length from supply chains, to be able to give unbiased advice to CMOs. For us, media trading is not the right thing to do, while the other areas of advertising, we will do it.”
Philips also believes that media is too important for any client to leave the buying to an external party and predicts in the future, clients will own the programmatic data themselves and supply the transaction.
He argues that Deloitte has not seen one client who is getting the most out of their adtech or martech stack at the moment, and adds that the better tech gets and the worse agencies get, the more clients will start to bring programmatic in-house.
“For us, before more money is spent, there really needs to be a concerted effort to change the marketing models, so they can actually get the right value out those techs,” says Phillips. “It's ridiculous to believe that simply investing in tech means that they are gonna get behind this tech. They have to change the model, they have to change the processes, the way that they work and the people they employ.
“I'm kinda nervous about the adtech and martech space, because they are huge investments and at the moment, there are poor utilisation benefits coming from so many clients. This has to change, it's only the change to operating what we're changing.”
“It is a long shift that we're gonna see, it is not gonna happen in the next two to three years, it will happen in the next decade, because, Adrian always says really, the best result is gonna be driven by the person who cares the most. The person who cares the most will be the one absolutely accountable for the performance of the media, but it will happen.”
There is still no end, not for the foreseeable future, on the debate on how the battle between consultancies and agencies will play out, but there will be the only winner in all of this, which is the clients. That could be the bright light at the end of the tunnel for the industry.