Communication and Advertising? A Business for Consultancies

In the AdAge ranking of the ten major global communication groups for 2017, between the sixth and ninth place, immediately behind communication holdings (WPP, Omnicom, Publicis Groupe, Interpublic, and Dentsu), there are four consultancy firms: Accenture, PwC, IBM, and Deloitte, in descending order. Together they have a combined turnover of more than $13 billion globally. In the top ten of individual networks, again from AdAge, it turns out that Accenture Interactive has become the largest communication agency in the world in terms of revenue, bigger than Y&R, McCann, BBDO, Publicis, DDB, or any another historic advertising company. During the Cannes Lions Advertising Awards last June, according to stories gathered from those who were there, the presence of the giants of auditing and consulting on the Croisette didn't go unnoticed. And a couple of surveys conducted in the United States a few months ago by authoritative research institutes show that a good part of U.S. companies do not exclude or are already thinking about entrusting their digital marketing, including creative work, to a consulting firm. This is bad news for the agencies that see their primacy undermined in a market that already represents almost half of their revenues.

The advertising industry has not been shaken to such a degree since the separation of media departments from creative departments occurred thirty years ago. Now it is the disruptive force of digital that is altering the existing market balance: advertising is still fundamental for building brands; but the communication game has changed. Not even a five-million-dollar Super Bowl commercial is enough to build a brand, because brands are increasingly the result of various forms of interaction with customers, offering new services and multiple experiences often entirely based on (or enriched by) digital technology. With the digital transformation, branding, communication, and technology are today inevitably interconnected, to the point that according to estimates by Gartner, the biggest slice of a company's IT budget is not controlled by the Chief Information Officer, but by the Marketing Director.


Consultancies have entered the market from a position of competitive advantage, based on technological leadership, ability to analyze data, transversal skills, strategic solutions, and ability to redesign products, businesses and value chains. In addition, they have the far from marginal capacity to interface directly with the top management of client companies, making them readier to seize the opportunity to expand their range of action with respect to the agencies. To reposition their offer, consulting firms needed two key resources: expertise in content and creativity; and so they bought them. First they acquired specialized web agencies and mobile marketing firms, and more recently they incororated creative boutiques and independent agencies (for example, in Italy, EY acquired the Italia Brand Group last fall). A few months ago the media began to hypothesize a takeover by Accenture, targeting one of the top five advertising groups; looking at respective stock market capitalization, this is not an unlikely scenario.

These new communication players will probably never make the commercials that you watch on TV, but by encroaching on the areas of creative business and content marketing, they have become fearsome competitors for agencies. These are working hard to catch up, by integrating big data in consumer analysis, rationalizing their organizational structures, and developing their ability to understand the business of clients. It is hard to imagine what the advertising landscape will be like in five years' time, but it is bound to be different from the current one.