Jason Wincuinas
Feb 4, 2014

Territorial tug of war: Digital growth blurs borders between roles

Consumer power has placed online marketing at the centre of business strategy and everyone wants a piece of the action, including major consulting companies.

Territorial tug of war: Digital growth blurs borders between roles

Consulting firm Accenture introduced its “Interactive” arm in 2009, claiming to offer marketing services that fully integrate consulting, technology and analytics. Its own sales brochure extols recruiting talent from the non-strategic world of Yahoo, Digitas and WPP as well as top consumer brands to set up the venture. Stepping up its pace this past spring, the firm bought Fjord, a London-based design outfit specialising in cross-platform digital communication. 

The company is not alone. Deloitte Digital came on the scene in 2010, asserting a combination of strategy, technology and creative services. It recently bought app developer Ubermind to bolster the business. Booz & Company (which PricewaterhouseCoopers inked a deal to acquire in October) also entered the game in 2012 with Booz Digital. Branding on its site emphasises ‘a bridge’ between strategy and execution. 

That gap, largely a technological-creative one, has long been there and has often been a point of co-operation between consultants and agencies. But its pull has intensified as consumers’ lives become more digital. 

“Everyone is headed to the middle,” said Kim Douglas, vice-president and managing director at marketing firm SapientNitro. “The ability of people today to affect brands is amazing.” 

C-level collaboration required to bridge the divide
Company collaborations: Working with more than just agencies

What consumers share, buy and do through their digital behaviour drives corporate decisions. This evolution, Douglas contends, is so powerful that it has moved CMOs from a role of guiding what brands say to one of directing what brands do. It’s as if the top layers of management have just woken up to the idea that marketing is less about logos and designs and much more about strategy.

Vince Lui of XM Consultancy also emphasised that the CMO has more say in today’s brand strategy as digital channels become major consumer touchpoints. “They understand the need for a digital transformation.”

Creative agencies, long-time CMO advisers, saw their business model altered years ago when the procurement process started chipping away at billings, both structurally and in terms of bottom-line dollars. So there is a natural pressure for them to move up the value chain and find new ways to sell expertise. The digital story escalates the urgency, edging agencies closer to the strategic territory of an Accenture or McKinsey. At the same time, consultancies face erosion in their home IT field from competitors such as Infosys, which built a niche by undercutting them on a large-scale and man-hour hungry projects. For Accenture, with heritage in developing the first automated payroll system, the threat is inescapable. And Infosys is not content with IT; it has branched into management consulting too. 

So the digital marketing space offers opportunity. 

Patricio Matteis, managing director at Accenture Interactive Asia-Pacific, commented that: “Consultancies such as Accenture are distinctly different from traditional creative agencies and we are not replacing them nor is there a blurring of lines.”

Others on the consultant side were less willing to talk on the topic.

But sometimes numbers speak louder than words. A Plunkett Research report shows global consulting industry revenue (Including HR, IT, strategy, operations management and business advisory services) just crested US$400 billion in 2013, with little growth from 2012. 

So the squeeze is on. According to the Harvard Business Review, top consultancy firms saw the portion of the work they do in pure business strategy shrink from about 70 per cent in the 1980s to near 20 per cent today. So new growth is on the agenda but with profits in the creative world already under fire, why take aim at that territory?

The draw is a natural force in the business world: growth and spending. The Global Media Intelligence Report 2013 from eMarketer and Starcom MediaVest says advertising is a US$500 billion market. Other forecasts put the total past US$600 billion in only two more years (the Asia-Pacific slice is already the second-largest). In either case, about a third of that is digital but expect the portion to balloon in the near future.

A November study from Nielsen and ANA forecasts mobile screens to surpass the influence of televisions by 2016. The report is just one of many charting digital’s deepening disruptive force. 

“It is a sweet spot that the management consultants and agencies can each leverage,” said Jerry Smith, the regional president of OgilvyOne Asia-Pacific. Both, he pointed out, talk about it, sometimes using the same words to mean different things. “Customer relationship management (CRM) is a good example” — consultants focus on the management part, with tech-led solutions, while creative agencies zero in on the relationship, with experience-led ideas. “We both aim to get more value for the client but we approach from different sides of the brain.” 

So as the digital middle expands and consultancies discover new business angles while creative agencies develop better ways to repackage their marketing experience as a strategic kind of product, expect a blurrier future. 

Ian Thubron, president of  TBWA Greater China, EVP TBWA Asia-Pacific, said:  “Accenture or Deloitte come from an accounting and consulting background, moving into strategy.  Communications companies have a broader creative-centric DNA.  I think there’s still room for both.”  

Digital is inherently a creative and a strategic issue. According to Lui: “Companies that can’t embrace these technological changes could become obsolete.”


BIG IDEAS C-level collaboration required to bridge the divide

Patricio De Matteis, MD, Accenture Interactive, APAC

Accenture Interactive believes that creative agencies cannot stand alone anymore. We respect creative agencies. There is great value to their process and the contribution that creativity has to brand building. However, marketing as a function is undergoing a major transformation, catalysed by the digital revolution, data explosion and consumer demand for a seamless multichannel experience.

Success in the digital age means achieving consumer relevance at scale. This requires businesses to build a closer interaction between their marketing and technology functions, driving both organisations toward a common end goal of achieving customer relevance.

However, an Accenture study found that there is a disconnect between CMOs and CIOs in Asia-Pacific. Less than 10 per cent of the surveyed executives believe that collaboration between CMOs and CIOs is at the right level.

The CMOs and CIOs continue to work in silos, but now more than ever bridging the gap between those two functions is critical for success. With today’s multichannel consumer seeking highly relevant experiences and with digital and analytics platforms emerging to help companies respond, marketing and IT executives must work more closely together.

CEOs in general are also paying greater attention to the marketing piece of the business. More often than not, marketing forms a large cost item for a business. Serving the needs of today’s digitally savvy consumers places a greater emphasis for CMOs to attract, convert and retain customers. To that end, we are seeing a greater top-down setting of priorities with CEO expectations calibrating with the CMO. 

However, CMOs should  also work to improve their relationships with CFOs, not only as an influencer on CIOs but also as the ability to demonstrate marketing ROI becomes even more critical. Accenture aims to help integrate business needs with technology to simultaneously increase brand equity, operating efficiencies and ROI.

 

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