Consultants do battle for a bigger piece of the action
As traditional management consultancy firms muscle in on the creative and digital space, the scene is set for some highly interesting struggles
Once upon a time the big global consultancy firms like Deloitte, PwC and EY made their money from providing taxation advice, audit services and general management consultancy services to their clients. Likewise, IT giants like IBM, Adobe and Oracle earned a decent crust out of building and selling mainframe computers and software.
While they continue to offer these services and products, they are now falling over each other in the race to muscle in on the marketing and advertising space by providing clients with services in areas like creativity, big data and digital marketing.
In the heart of Dublin's Silicon Docks, for example, Accenture is looking to recruit over 250 new staff to work in its centre for innovation as part of a €25m investment which will bring the total number of staff to over 2,250. The firm is looking to hire people with experience in online advertising, social media, advanced analytics and big data.
Meanwhile up on Earlsfort Terrace, Deloitte recently appointed a new partner to the firm - David Conway - who will head up its digital practice, which provides solutions in digital strategy, customer and user experience, CRM and digital marketing.
Ten years ago, a lot of this would have been unimaginable and possibly frowned upon by many of the big accountancy and consultancy firms. Quite possibly, some of them would have perceived marketing as a frivolous cost rather than important investment.
How times have changed.
For example, the most recent Top 100 Digital Agencies Report, which is published by eConsultancy, showed that consultancy firms are now dominating the top of the table, with Accenture Interactive in second place behind IBM iX, and Deloitte Digital following in fifth.
For its part, IBM iX boasts more than 10,000 employees who work on creative, digital and analytics for clients like Nestle, Visa, VW, Airbus, LLBean and Air Canada. In the space of a week last month, it acquired three digital advertising and design agencies around the world, bringing the number of studios it has across the world to 30.
Clients of IBM iX have access to IBM Watson, its powerful artificial intelligence platform that uses natural language processing and machine learning to reveal insights from large amounts of data.
Coca-Cola in Japan, for example, recently used Watson and proprietary weather data to predict on a daily basis how vending machines across Tokyo should be stocked, and assess the most efficient marketing inventory depending on location and weather conditions.
If anybody has doubts about a computer's creative credentials, IBM Watson recently created a movie trailer for the sci-fi movie Morgan which is currently running in cinemas.
To train the computer for the task, IBM scientists fed it 100 horror movie trailers cut into separate "moments" or scenes. Watson then analysed them to get an idea of what people find scary. Once completed, the team fed it all 90 minutes of Morgan to find the right moments to include in the trailer and it focused on 10 scenes, totalling six minutes of footage, all of which were used to make the trailer.
In the case of Accenture, its move into this space occurred in 2013 with the launch of Accenture Digital in 2013. Since then it has ramped up its digital and creative capability through organic growth and a number of bolt-on acquisitions including the London-based design firm Fjord in 2013 and the Texas-based Chaotic Moon last year.
It makes a lot of sense for the big consultancy and IT firms to want a piece of the action. Most of them already have sectoral experts, access to global consumer and business insights and enormous amounts of data. Unless they are doing something wrong, they also know their clients' business better than most and they can tell what's working and what's not when it comes to marketing.
While the ongoing digital transformation of the business world has provided wind to their sails, these consultancy firms have positioned themselves up the value chain by having an existing strong relationship with their client and direct access to the C-Suite, something traditional marketing agencies struggle to achieve.
For clients, the great disruption that digital has unleashed upon their business has possibly inspired them to seek new ways of doing business while at the same time emboldening them to transform their marketing operations, place an increased emphasis on innovation and, perhaps, change how they view the existing agency partners.
These traditional agency partners should have every reason to be concerned. Indeed, it is somewhat ironic that as traditional management consulting firms continue to push into the creative and digital space, the traditional creative and digital agencies also want to move into management consultancy. While it may not end up as a pitched battle between the two camps - not yet anyway - it won't be one for the faint-hearted.
Sunday Indo Business