Mike Fromowitz
Aug 12, 2016

Sleeping giants awake: Consultancies loom large in agency space

It’s never been harder to be an ad agency, writes Mike Fromowitz. But could the presence of giant consultancies in the creative game actually be a good thing?

Sleeping giants awake: Consultancies loom large in agency space

Heat, the Independent San Francisco-based, 100-person agency, surprised many when it scored eight Lions at the Cannes Lions International Festival of Creativity this past year. Creative Director Steve Stone knew he had a Lions-worthy idea with the EA Sports Madden NFL Giferator, a football video game. Heat’s idea was a Google advertising program that allows the game maker to quickly create gif ads and customize the message based on what is happening on the field. The Giferator pulled live game footage and created GIF ads in real time. The ads targeted users based on their favourite teams, and the campaign later opened up, allowing football fans to make their own sharable, smack-talking GIFs.

Cannes judges loved the digital-first idea. The campaign checked all the boxes for creativity: lots of digital content in real time, social, personalized, sharable, engaging, and data-driven. The Madden campaign was a creative collaboration among EA Sports, its agency Heat, Google and the agency Grow.

Google’s real-time marketing technology was its answer to Twitter, which until now, dominated the second-screen conversation for football and other live events. Now, Google’s digital ads are created in the moment and being served to fans browsing sports-related sites—not their Facebook feeds—at halftime.

Google’s effort falls under its Art, Copy and Code initiative, where it teams with brands and creative agencies to marry advertising and technology. Google built a content engine, generating 100,000 ads depending on what happens in the game, with the aim to show brands just how display ads can be created in real-time just as quickly as social media posts.

The biggest news of all: The world’s first creative digital consultancy

This article is not about Google, nor about EA Sports’ Madden football video game. It’s about changes and trends going on in the advertising world, with perhaps the biggest news of all. By the end of the 2015, the 11-year-old agency Heat, had been acquired. Not by WPP or Publicis. Not by Interpublic or other advertising holding companies, but by the world’s largest business consulting firm Deloitte Consulting, famous for its accountants and operational efficiency experts.

While we all know creativity when we see it, the actual process of producing something that is emotionally resonant, fresh and exciting is significantly more difficult to figure out. Which brings up the subject of Deloitte, why it bought Heat and how its push into the marketing landscape is more bad news for ad agencies.

In 2012, Deloitte established its very own digital creative/design services group Deloitte Digital, which has grown to 7,000 employees with $2.1 billion in revenues. Other consulting firms such as Accenture and IBM are doing the same to build their market share by buying up existing companies.

The addition of Heat continues a series of strategic Deloitte investments evolving its Deloitte Digital practice. The result is the world’s first creative digital consultancy, a model which transforms the way C-suites approach business in the digital age. The result is greater ownership of, and return on, end-to-end customer experience. Deloitte believes it has created a new model for a new age—a creative digital consultancy—that brings together all the creative and technology capabilities, business acumen and industry insight needed to help transform clients’ businesses with digital.

Deloitte’s creative digital consultancy model was founded from the desire to provide clients with a full-service solution for their business needs. Now 4 years old, the agency part of the business has 6,000 people globally and sits squarely within Deloitte Consulting, its parent company ($34.2 billion in revenue last year). It identifies itself as a digital and consulting agency. The idea is that Deloitte can deliver on high-level strategy needs, as well as traditional creative and campaign analytics.

Multiple agencies out the door

As Deloitte sees it, clients no longer have to work with multiple agencies and consulting firms, as both creative and business strategy will now come from the same team. The acquisition will allow for the creation and execution of more strategically driven engagement that C-suite executives are asking for, and enable delivery of comprehensive end-to-end offerings that are designed to help CMOs and all members of the C-suite reimagine the business and customer experience.

Heat’s delivery of authentic engagements between consumers and the brands they love complements Deloitte Digital’s deep industry knowledge, business transformation, organizational change and versatile technology experience. The result is a transformative perspective that guides chief marketing officers to reimagine their customers’ experience comprehensively and answers businesses’ needs for a holistic connection between their brands and the consumer.

As the digital revolution continues at break-neck speed, the ground has dramatically shifted again as new players (like Deloitte) are entering the fray, while ad agencies continue to struggle with turning big data into anything meaningful.

Ad agencies have endured years of fee cuts and are being asked to produce more and more and more for their clients without corresponding new revenue. No longer are they able to produce five or six creative pieces over the course of a year. They are now being asked to produce 500, 600, 700 bits of content for less money. Michael Farmer, author of Madison Avenue Manslaughter, estimates that agencies now are working for one-third the revenue of what they were making 25 years ago, and are understaffed by at least 20 percent.

Ad agencies bending over backwards for marketers

While most agencies have bent over backwards to accommodate marketers, they really want to resurrect what they used to be good at—their DNA as strategic contributors to the growth of brands. Yet they are expected to churn out endless amounts of content. This is hurting agencies because the more time and resources spent on turning out content, the less strategic value they are able to contribute.

What’s more, plenty of agencies are working to shift their focus beyond just creating advertising, promoting their creative thinking as brand problems solvers. Little wonder then, that creative people are feeling undervalued and more marginalized.

Marketers, meanwhile, say they are under very similar stresses of their own, having to do more with less. Their businesses are far more ROI-focused than ever before. For our industry, what worries me more than marketers asking agencies to produce larger amounts of content at lower costs is the fact that they are beginning to feel less precious about creative ideas being compromised and in turn, agencies are having to produce lower-quality content.

One might argue that today’s creative work is no less creative than it was 20, 30 or 40 years ago when the 'big idea' was the singular goal of creative agencies. Or for that matter, when everyone wanted to win at Cannes with a 30- or 60-second TV commercial.

The truth of the matter is that the goalposts have shifted. Today, consumers are constantly connected to all sorts of media, and brand marketers believe they need a steady stream of content to make the sale. Technology has transformed much of our lives and offers us more freedom than ever before. But it is also making us unable to disconnect, bombarding us and overwhelming us with constant content and marketing that we never asked for in the first place.

Too much stuff

In a recent article on this very subject, FCB’s global chief creative officer, Susan Credle, is unequivocal in her read on what’s going on in our industry. She believes “the industry’s unquenchable thirst for low-cost content is putting unreasonable expectations on agencies and skewing the value of agency creative. We have a false sense of how much labour it is actually taking to create all those banners and social media pieces.”

As agencies are trying to figure out ways by which they can make their content faster and cheaper, the fact is that there will always be someone else able to make it faster and cheaper. And sadly, as marketers keep asking for more content that drive sales, agencies are complying with those demands because many have become order takers instead of strategic, business-problem-solving contributors.

Someone once said 'Content is king'. I think it’s more like 'Content is a commodity'. As consumers, we are being swamped with content, and too few agencies, and clients in particular, are questioning its real effectiveness. Rather than just pouring more content out, marketers need to think harder strategically and make sure they have something meaningful and authentic to say.

Susan Credle puts it this way: “I think we are creating too much stuff. We get push back on this, but I think you need more valuable things that people cherish and look forward to or find interesting than a lot of little stuff that basically goes mainly ignored. If a brand doesn’t know who it is at its soul, and why it exists, it is not going to be a very positive experience when it comes to marketing. And the next thing you do is you start creating work that tells that story…that really tells the truth of who you are and why you matter. You become more famous for that exact thing and it is a relationship that over time becomes stronger and stronger and stronger.”

There are many ways of connecting with consumers, but one of the best and most lasting ways is via the heart. This is often achieved through emotionally resonant ad campaigns that have real impact on people’s emotions and lives.

The value of creativity

This may be evidence that the business world is beginning to value creative contributors in ways it never has before. In the article referenced above, Alicia Hatch, the CMO of Deloitte said, “We believe that creativity belongs in the boardroom. The CEO needs creativity to run a business now. You have to think completely differently.”

Are Hatch’s words an affirmation of the power of advertising agencies?

I think so. I’m not yet ready to throw out the baby with the bathwater. A great creative idea is one of the most powerful vehicles by which you can capture the imagination and the wallet of the consumer. Great creative ideas have the power to make a consumer look afresh at what he or she normally takes for granted.

Perhaps bringing creative people into firms like Deloitte brings intangible value to the table. Perhaps too, it is a sign of the future. Without doubt, more changes are coming. Creative thinkers and their agencies may at long last find themselves increasingly called to the table—valued for their unique perspectives and the power and potential of their imaginations. If this is where the market is headed, maybe it’s not so bad for the creative industry after all.

Mike Fromowitz., a longtime Asia-Pacific ad man, is now partner and chief creative officer of Ethnicity Multicultural Marketing + Advertising in Toronto. He is also the author of the one of the most consistently popular articles on this website, a 2013 post entitled, "Cultural blunders: Brands gone wrong".

 

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