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  Ad Agencies vs. Consultancies: Weighing the difference
 
 I think that eventually brand consultancies will absorb ad agencies. 
Robert Collins, Strategist - May 4, 2001
 
 Agencies need to better understand how business should be held in terms of variables that are part of marketing issues which would influence the whole communication strategy. Agencies have lack of knowledge about marketing in a complete view, having a focused vision based on communication only. This seems to be a risk for them in the near future. They should understand about a integrated communication and the best practices of business which include pricing, supply chain among other strategies. 
Amalia Sina, Marketing Director, American Home Products - Whitehall Laboratories - May 5, 2001
 
 Ad agencies are slowly evolving to adapt to a new world of client needs. As clients require a more sophisticated concept of the brand, ad agencies need to go beyond the :30 commercial and visual brand identity concepts. Large agency networks like WPP and IPG are developing the broader capabilities to deliver deeper strategic value to their clients. The issue remains whether all members of the agency team will work together to provide truly strategic guidance to their clients. 
Charlie Skuba, President, The Skuba Company - May 7, 2001
 
 Robert Collins, ill informed comments pre-suppose that ad agencies only make ads. Mr. Collins would be well-served by doing some research into what the more progressive agencies are doing--we are increasingly becoming cradle to grave brand development shop-in-shops, providing the full spectrum of brand managements services. Look out Mr. Collins, an agency might now be hunting your "strategist" work. 
KP Smith, Partner, Sr. Analyst, WPP - May 7, 2001
 
 I wrote an article on this subject in 1998:
BRANDWEEK: May 11, 1998

TREND SPOTTING: Whose Brand Is It, Anyway?
By Nick Shore

Have you noticed how lately everyone is jumping on the "brandwagon," as if it were some new nexus of enlightenment, as if "brand" hasn't somehow always been the most important word in the vernacular of marketingese? As it gets hot in the brand kitchen, it's unfortunately all boiling down to the key question: who owns the brand territory? Certainly, that was an issue at the recent 4A's meeting, where branding consultancies were criticized by some speakers for poaching on ad agencies' rightful turf. You've just heard one view of what agencies need to do to reclaim that turf. Well, here's a rather different opinion from one of the alleged poachers.

Before we opened our doors as a brand agency in 1994 we bounced our business plan off a few industry confidantes, most of whom speculated that it would never work because the clients would fight it. "You're taking away the brand bit, and that's their turf" was the general sentiment. Our experience thus far with clients like McDonald's, Coca-Cola, Lever Brothers, Motorola and Black & Decker has been quite the reverse. Clients are, it would seem, crying out for partnership with an entity (who isn't selling anything!) that can offer smart help wrangling with new and existing brand issues. Rather than fighting over turf, the client reaction has tended to run more like, "Finally, someone to help me focus on the brand from first principles, not just steps 93 through 100 in the process!"

As was seen at the 4A's, the reaction of the ad agencies to the brand agency concept has been somewhat less mature. For reasons that at first glance seem logical, when a client throws a brand agency into the mix, the ad agency folks start to get very territorial very quickly. Believe me when I say it gets ugly: in a supersaturated ad agency marketplace of hypermergers and megapitches, the brand "advantage" looks like the holy grail, the last stop before parity and commoditization. Just like "integrated" was a few years ago. Just like account planning was a few years before that.

But drawing the battle lines with brand agencies seems to be shortsightedness driven by panic. Advertising needs to take a piece of advice that it perpetually gives its clients: focus. Advertising agencies need to stop trying to own all of the marketing pie, stop trying to circumscribe everyone else's specialty, and focus on their own. Focus on the creation of great brand- and sales-building advertising, advertising that solves the business and brand problem in hand. It is, after all, a single tool (albeit expensive and complex), but a tool nonetheless, in a box full of tools at the disposal of the marketing world, each designed to solve different kinds of marketing issues.

For many years I worked in ad agencies here and in England, and I concluded that one of the single most frequent causes of frustration and rift between agency and client is that the agency is ill-briefed at the beginning of the relationship. Fundamental questions are left unanswered (and go unasked). What is the nature of our brand? What would we like it to be? What problem have we identified with the business or the brand for which we believe advertising is the appropriate solution? The best briefing we ever received was Nickelodeon, who gave us a suitcase full of stuff-Gak, videotapes, an orange foam brain-and said, "This is us. Don't try and change it."

Ad agencies need to recognize what clients already do, that the insertion of a brand agency into the equation can vastly improve the efficiency and effectiveness of the advertising process. By spending focused (that is, specialized) time wrestling with the nature of the brand and where it needs to go, and getting the client to buy into those conclusions, the brand agency is helping to clear the way for the ad agency to do what it does best, in a pointed and optimal way.

So who will own the brand turf? Of course, no one will, and everyone will. What we have to recognize is that there is the space and the need for all the players to be in there, not as warring factions but as collaborating specialists. Perhaps a better way to think about it is that the brand is client to us all: marketing people, advertising agencies, public relations agencies, brand agencies. In this "customer focused" age, we all need to ask ourselves, "What is the maximum value I can bring to my client, the brand?" 

nick shore, ceo, the WAY group - May 7, 2001
 
 In Ukraine, ad agencies proclaim its possibilities to build a real brand. But I don't know any ad agency that built a real ukranian brand. For example ad agency "S.V.S." and magazine "Grand" organized PR-action "Brand of Year." The idea was good, but after finishing, professionals didn't mention any positive opinions. It looked like PR-action for own ad and new possible clients. 
Yura Moyseyenko, Student, European university - May 7, 2001
 
 As the owner of a design & branding agency in South Africa this debate is currently doing the rounds. Objectively, ad agencies and brand consultants are effectively business's and will compete within their own industry like any other. Each will evolve and change to attract clients and be prosperous. Whatever differences may be apparent now will eventually be explained away by creative and motivated business directors who will resolve their own "focus" in order to tame the market. My own belief is that the brand comes first. That it matters or not will have no bearing on how ad agencies & brand consultants compete for clients. Perhaps the eventual leader will simply be client-services? 
Jonathan Selby, Owner, The Graphic Shop - May 7, 2001
 
 Creo que las agencias de publicidad han dejado de satisfacer la necesidad más importante de sus clientes, la de crear diferenciación a partir de sus marcas. 
Fernando J. Sánchez, Director Estratégico, Brandgroup - May 7, 2001
 
 It is probably not too realistic to say that brand consultancies will completely replace ad agencies in the near future. The more thought provoking question however might be what function will ad agencies serve in the future vs. their new competitors.

Certainly part of that puzzle can be solved by looking at how agencies invest in their biggest asset - people. I don't think there is any question in peoples’ mind today why the marketing communications industry is changing, and therefore why it requires a new breed of people and update of talent. As such, agencies that stay with their present course and continue hiring senior managers whose idea of an ad agency goes back to the business model and strategic thinking of the 70's, will for sure perish. And OK, maybe they won’t perish, but they certainly will lose a few more good people, status with their clients, and more importantly control of their coveted budgets.  

Dorota Walczyk, Business Development Director Latin America, DDB Worldwide - May 7, 2001
 
 Regarding KP Smith's comment: If ad agencies are "increasingly becoming cradle to grave brand development shop-in-shops, providing the full spectrum of brand managements services" as he says, then I guess they're not really ad agencies anymore... They are brand consultancies. 
Robert Collins, Strategist - May 7, 2001
 
 The point is that advertising agencies focused on delivering advertising-based solutions and methodologies will become less valuable. Brand business consultants deliver a big bill without being able to creatively solve problems. If branding is the creation of a personality, then ad agencies who can craft solutions or contributions for managing the brand experience and contact points are better equipped than consultants. Their problem will be the compensation required for such involvement. 
Robert Richmond, Brand Director, Warn INdustries - May 7, 2001
 
 I believe that the 'virtual team' is the way ahead. The client is the ultimate brand guardian (especially if we believe what we are told about the considerable client-side investment in training and education). Budgets can then be better placed on bringing together the creative skills from design agencies and advertising agencies (or creative independents such as our own set up which brings together a richer mix of creative skills) to implement against client strategy. 
jude arnup, creative director, bite - May 8, 2001
 
 Another question is: which of these two are able to build brands in the interactive mediums of the 21st century, because based on the work I’ve seen so far neither have the necessary expertise.

A completely new type of consultancy is needed who can shift from “image based thinking” to full “experienced based” thinking. The challenges of the 21st century are here and if they continue to use the tools of the 20th C they are going lose. 

Julian Hearn, MD, Kruder - May 8, 2001
 
 From what I've experienced in the industry the shift seems to be for ad agencies to become all-encompassing entities with brand management, investigation and PR among others done inside. The fee system has to change to accomodate these new sources of revenue that cannot be billed the traditional way. The agency I work at will receive a large portion of it's revenue from the efforts of the PR team on behalf of our clients. Same goes for branding and advisory. I believe Darwin's maxim is still valid, if you don't evolve you die. 
Juan Alvarez, Art Director, Slack Barshinger & Partners - May 8, 2001
 
 Answer to Julian Hearn: "… which of these two are able to build brands in the interactive mediums of the 21st century, because based on the work I’ve seen so far neither have the necessary expertise."

Maybe. But maybe most of the work (i.e.: most of the stuff on the web) is so poor, because none of the two businesses is really involved so far. Most of it is done without strategy or agency guidance, but with the "learning-by-doing"-attitude of most of the New Media Agencies. So, let's put our skills together for a better future ;-) 

Mathias Jahn, Manging Director, Jung von Matt frontend - May 9, 2001
 
 Having worked extensively in both the advertising and brand consultancy fields, I firmly believe advertising agencies are in the driver's seat. As long as advertising and media represent a company's single biggest marketing expense, ad agencies will have a "seat at the table." Further, they are most adept at bringing strategies to life. This is, in the end, the key benefit of most marketing activity. 
Greg Warren, SVP. AD, Leo Burnett USA - May 10, 2001
 
 I think there will be a merge between Consultancy and Ad Agencies. The market demands some value add to service and a one stop "shop". 
Jonathan James Tan, Division Manager, SGS - May 11, 2001
 
 Branding has less to do with design than it has to do with a clear definition of what a product is and how it needs to be understood in order to accurately and actively present itself to people.

In reference to the point counterpoint debate. The old saying, "it comes in threes." It's been forty years since the sixties, and thirty years since the seventies when the paranoia ceased. During this time a new Consultancy was born to compete with advertising.

Corporate and Brand Identity Consultancies won the battle and advertising lost the war.

The relationship between Advertising Agencies and the new Corporate and Brand Identity Consutancies was ambivalent. Initially many Advertising Agencies saw Corporate and Brand Identity as something their own 'collateral' or 'below the line' departments could readily handle either for a small fee or if the accounts were big enough, free.

Again, the time honored phrase, "you get what you pay for." Not many clients were satisfied with the results. Another Ad Agency reaction deriving from their insecurity, was that the Corporate Identity Consultant was a threat. Branding Consultancies were viewed by Ad Agencies, it was thought, as a new kind of Consultancy aimed at stealing Ad Agency business and reducing their influence. Another agency reaction was that Corporate and Brand Identity Consultants were simply grandiose design studios with an inflated ego of their own significance. Year 2001 all of these misconceptions are dead and died by the seventies.

For the most part, far-sighted advertising agencies encourage their clients to use Corporate and Brand Identity Consultants where appropriate for Brand Strategy, Brand Research, Brand Positioning, Naming, Name Systems, Image Assessment, and Competitive Analysis.

Pioneering Corporate and Brand Consultancies such as, Saul Bass/Herb Yager and Associates; Paul Rand Inc.; Lester Ball, Don Ervin; Brownjohn/Chermayeff and Geismar; Morton Goldsholl and Associates; Ramond Lowey/William Snaith; Donald Desky Associates; Jerome Gould; Gerstman + Meyers; FHK Henrion Design Associates, and other World Design Masters paved the way.

The professionals were Lippincott & Margulies, Walter Landor Associates, Soyster Orenshall, Unimark International, Siegel & Gale, Anspach Grossman Portugal. (others). The aforementioned professionals employed sociologist, accountants, economist, psychologist, designers, marketing, trademark and patent lawyers.

Corporate and Brand Consultants understand everything in branding springs from the identity of the product and company, its architecture, interiors, print advertising, media communications, and e-branding. Advertising Agencies alone cannot comprehend clearly the nature of a corporation's brand. Too many cultural, organizational, political, economical and psychological factors are involved for which advertising executives have no training.

Realistically, I do not see management consultants competing with Advertising Agencies. Management consultants may retain an independant Corporate and Brand Consultant (e.g Tony Spaieth). Mega Communication Consultancies such as London based Incepta Group plc which owns Citigate Lloyd Northover-London,and Citigate Corporate Branding. Under this umbrella, Corporate Branding, Advertising, Marketing, Public Relations, and Management Consulting are integrated. The same is true for Omincom, WPP, Interpublic and True North. All of these power house communications conglomerates intergrate strategic and creative communications solutions under one roof. I cannot imagine Mercer Consulting giving advise in reference to corporate branding without recommending their client retain the service of Mercer Group's branding entity Lippincott & Margulies. Neither, do I see management consultants such as, Arthur Andersen or Booz Allen Hamilton giving advise on brand and identity issues without expertise.

I see Advertising Agencies wising up and taking a page from the Corporate and Brand Identity Consultants. Integrated personnel diversification is key.

Personal note: Leo Burnett; Carson Roberts; Papert Koeing and Lois; Young & Rubicam; NW Ayer & Son; J Walter Thompson; Doyle Dane & Bernbach; McCann-Erickson; Ogilvy & Mather and Foote Cone & Belding were the Advertising Agency brand builders that historically matched the brands bulit by the aforementioned World Design Masters, and Corporate and Brand Identity Professionals.  

Frank C. Briggs, Principal, FedDias - May 11, 2001
 
 I think consultancies may have the brand know-how of advertising agencies but it is not necessary that one of them be replaced by the other. My experience indicates that the opposition betwen ad agencies and consultancies is a false dichotomy. I'm a consultant and own a consultancy, and have been working side by side with my clients' ad agencies from a long time ago. The thing is, for me of course, consultancies and ad agencies take different points of view about the same phenomena, and in fact that points of view are absolutely complementary; and it must be like that, for the client's brand health. Please excuse the defections in my english, my native language is spanish. 
Fredy yYantorno, Director, Grupo Yantorno - May 11, 2001
 
 As a long-time consumer of these services, I think this debate illustrates a classic positioning problem. Whether right or wrong - I'm not going to go to an advertising agency for strategic work on my brand. Similarly, I'm not going to go to a brand consultant for creative work.

Ultimately though, I believe, advertising agencies will evolve to acquire the necessary talent to compete on the more strategic elements of the brand. They must! (suggestion - ad agencies please hire some former brand managers to supplement the account management/planning function) Plus, most of the time the strategic brand work is naturally followed by creative work which the ad agency is obviously best suited to create.

Brand consultants will also have a place, in their (perhaps lucrative) niche, as their services will meet a broader set of business challenges than the currently more "executionally" focused ad agencies. 

Michael B. Moore, President, Infopop Corporation - May 12, 2001
 
 Both agencies and consultants will continue to co-exist for many years to come. However, this is not an endorsement that either resource should be responsbile for creating and shaping brands. A company holds nothing more valuable to its long term profitability than its brands. It is the company which must guard, protect, mold, and direct the core position of a brand. Once that rule is adhered to, then it really doesn't matter if you select an ad agency or marketing consultant. Both have real potential for screwing up your brand if you are not careful. 
Neil R. Myers, Marketing Manager, Budd Seed - May 14, 2001
 
 The real winners will be the conglomerates-- WPP, Omnicom, IPG, et al. They can put together ad hoc teams of advertising, PR, brand strategy, internal communications: whatever the client needs/wants. When the gig is done, or the client's needs change, the team changes or goes away. 
Mark Hornung, Managing Partner, West Coast, JWT Specialized Communications - May 17, 2001
 
 Like most humans and organizations, ad agencies are their own worst enemies. Smart people at smart agencies have always provided great insight into brand and image, but too often the norm for agencies has been to worry more about media, headline, and logo than about true branding.

Part of the fault is with the business development process--in order to win business, agencies jump into spec creative without first doing the homework required to fully understand the company, its competition, and the audience. The result? The prettiest picture, logo, or ad wins, not the one that builds a compelling, unique brand image.

Another part of the problem is with the message of many agencies: Your brand is what you say you are, not what you really are. So, a company with lousy customer service can be about great customer service because a great ad will make people believe it. Bullshit--a great brand is crafted from the inside out and not within a 30-second spot or the 4-color pages of a trade pub. 

Augie Ray, Sr. Brand Consultant - May 21, 2001
 
 The problem with big agencies is that you never get the real powerhouse talent, if it's even there.

With the good, smaller consultancies, you are basically buying brilliant people and really good, orginal ideas. It's the Strategy and Ideas I want, not the bottom-heavy implementation. 

John - May 21, 2001
 
 Our criteria for brand leadership beyond communications imagery include:
-how actionable is brand as company's simplest knowledge-sharing system?
-is every big investment decision made by Board aligned with brand's unique purpose?
-is there an overall value exchange map open to every decision maker connecting the company's brand architecture and business model?
-if we randomly surveyed anyone in the company would they be communally proud of the brand, and passionately capable of activating it both in their work activities and their interactions with co-workers?

When a company's leader says we haven't got all of these yet, but need them, my reply: realise that doing this is simple apart from the politics change will cause. Make a list of who has billed you most on brand work in the last 2 years because they have the most vested interest against opening the book on brand knowledge. Our mission will be nearly done when you feel the greatest experts at living the brand are teamplayers in your company. 

chris macrae, brand charterer, Chief Brand Officer Association - May 22, 2001
 
 Advertising agencies are equal to all in one...something will be wrong!

Consultants are equal to specialize and professional people. Something its going to be perfect!  

juan de dios garza lozano, identity consultant, arteche s/c - May 22, 2001
 
 I think that eventually advertising agencies will absorb consultants  
Nicola Gorini, planner - May 24, 2001
 
 The answer is pretty simple. Go ask a random account manager at an agency and a random consultant to describe thier client's business model. 9 times out of 10 the consultant will know. Hmm...how do you brand something when you don't know how it makes money? 
Anonymous - May 24, 2001
 
 It is impossible at this time for either ad agencies, consultancies, or clients to perfectly control all access to brand under one roof, in an "all information shared" manner. But even the WPPs of this world, with their a la carte method of constructing brand coverage, should acknowledge the ultimate struggle in placing a sizable number of human beings from seperate entities in a client centric pen to play nice together, for the good of the brand. There will always be power i.e. thought struggles as to which strategies are most valuable and who should be responsible for executing them, especially when there is economic survival to consider. The day when one sub industry overtakes the other is illogical but perhaps one day, a new construction will be formed where the right brain actually melds with the left brain. 
Christina Papale, Strategist - May 25, 2001
 
 Christina Papale's whimsical comment at the end of her piece "... but perhaps one day, a new construction will be formed where the right brain actually melds with the left brain," speaks to the need for a new mental model to unleash the power that sits at the nexus of the disciplines of strategy, brand, marketing and creative development. This mental model would define a game-changing consultancy, one that would fuel a new conversation and relationship with clients – not a hybrid consultancy or agency, but a new species.

There is no shortage of smart people sitting in agencies, brand, management consultancies or design firms. However, even if you put a cross-discipline assortment of these entities together, without a model to work with, it’s difficult if not impossible to deliver high value to any client (ego, personal and corporate agendas, industry rigidities, sacred cows, fear, etc.) Consultants in silos working for clients that perhaps have titanium silos between operational entities -- net zero.

Neither of three entities -- ad agencies, brand or management consultancies -- will dominate in delivering highest value. Their solutions will continue to be valuable in specific situations but lose relevancy for CEOs who are systems thinkers. At the end of the day, the CEO has to make sense of the whole company even though it may seem easier to split the problem into manageable pieces.

Driving change in how a company develops and manages the internal and external experience(s) of itself is a difficult conversation to have with a CEO.

How?

Four years ago, we set out to define a process that would accomplish what Ms. Papale dreams -- to converge the brainware in debate here. We’ve run experiments with companies large and small and continue to evolve a model to frame the "How" for this new species of consultancy. There are no silver bullets. It’s lonely and messy work. But, we’ve seen what is possible and there’s no turning back. 

Gasper Patrico, President and Chief Branding Officer, Think!City, Inc. - May 25, 2001
 
 Ad agencies do it better! The agency I work for is currently branding 5 new products. And I personally am working on 2 branding assignments. It seems ad agencies are doing more and more branding as the need arises. Who needs consultancies?! 
Anonymous - May 30, 2001
 
 I agree! 
Mark, Senior designer, BrandGods - May 30, 2001
 
 Having worked in the brand management, agency and consultant space, I believe agencies will never be able to deliver against brand as a key element of the business model (along with Target Audience, Portfolio, Strategic Control Points, and Value capture). Agencies typically come at brand with a media and executional bias. What's needed at the higher level is a brand architecture and modeling that is a blueprint for all activities and communications for the brand, without exception. And yes, the chief brand steward is the CEO of the company. 
Dennis Flynn, Founder/CEO, The Sonar Group - May 31, 2001
 
 As brand becomes a crucial element of many corporate strategies, its implication in terms of impact on all value drivers assume the central role in companies' concern.

While the role of advertising agencies in building strong brands remains crucial, there is a "new" field of studies, research and -yes - consulting that faces the managerial and organizational implications of a brand based approach for corporations. 

Fabrizio M. Pini, Marketing Professor, Univeristŕ degli studi di Siena - June 1, 2001
 
 
     
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