The Battle for Marketing

post # 105 — June 13, 2006 — a Client Relations, Strategy post

Advertising Age has just run a survey of readers asking them if they were concerned at the moves of major consulting firms (IBM, Accenture, McKinsey) into the kinds of marketing work that could influence both choice and control of agencies. Most readers concluded that the ad agencies had every reason to be nervous.

For decades, ad agencies have defended their territory as special. In the latest survey, Rick Pike, senior VP-media director of Inter/Media Advertising said: “Consultants who are not experienced advertising professionals cannot remotely understand the nuances and intricacies of an art form such as marketing and advertising-which ultimately is all about human behavior.” (It is, however, unclear, what it is the backgrounds of advertising agency people that make them peculiarly qualified to understand the nuances and intricacies of human behavior.)

Everyone knows advertising is becoming a shrinking percentage of marketing, and was never ALL of it to begin with. As the holding conglomerate movement showed (WPP, Ominom, IPG, Paribas) the game for years has been to try and convince clients that a full, cross-disciplinary approach to marketing communications could be achieved.

There has been only one problem with this: the promise has never has been delivered. From as long ago as Y&R’s infamous “Whole Egg” approach through many other slogans, all the marketing conglomerates have proved is that they are incapable of designing and executing fully integrated marketing plans to their clients.

Apart from the problems of cross-boundary co-ordinations (each of these agencies within the comglomerates tend to be separate firms and profit centers) the larger problem has been that while the mega-agencies or agency networks have occasionally (VERY occasionally) been able to deliver a sensible, comprehensive package of marketing communications tools and approaches, they still lack a critical missing ingredient – an ability to understand the full picture of what is involved in marketing a product or a service. Marketing communications is not all of marketing.

The networks have tried to rectify this over the past decade with experiments in hiring MBAs from prestigious schools, and giving them fast-track positions to take on managerial and client relationship roles. Most of these experiments have failed, not least because the MBAs culture, attitudes and salary expectations have been hard to integrate into an agency culture.

For decades, there has been a huge hole in the advisory market. No major consulting firm built its reputation and the bulk of its practice on giving marketing advice. The likes of McKinsey, BCG and Bain did Strategy; the accounting-based firms did IT, the actuarially-based firms did Human Resources, and many Wall-Street firms built major institutions out of giving financial advice. Even the lowly topic of Operations was used to build major institutions like AT Kearney and other firms that focused on productivity, quality and supply chain management.

But where were the marketers? Who was giving corporations, anywhere in the world, their top marketing advice? Basically, no-one – except for a few small if respected firms.

The move of IBM, McKinsey and Accenture is dangerous not because they are going to know more about advertising than the advertisers. What they represent (in very different ways) is the theory that having tired of paying for unexecuted strategy and 30-second ads that accomplish little, corporations might be ready for a totally new approach to service – a group of people who hold themselves out as knowing something about how you actually market and sell products and services.

It’s not clear where the people who know those things are housed today, and whether or not the big-3 consulting firms can hire them.

But battle has been joined, and I don’t think things are ever going to be the same.