Ad Agencies Should Shift Into Consulting Roles for New Business

Tom Fisburne ad agency new business

How agencies can reinvent themselves by developing consulting services to open the door for new business. 

For too long advertising agencies have been treated as vendors. They claim to be different, but most are pretty much the same and sameness always breeds differentiation based on price. There has been little innovation from agencies to migrate away from the old model of advertising.

In an American Advertising Federation survey, only 10% of senior executives put advertising at the top of their priority list. Most clients interviewed (75%) wanted their agency to give them more strategic business advice. But, according to research of U.S. clients conducted by Source Information Services, growth rates for consulting services are projected to be higher than that of advertising.

Where do U.S. companies need help? Not surprisingly, digitization. The fastest-growing area for consulting is in marketing.

For years, I have encouraged my agency clients to offer consulting services. This is a great opportunity. Providing consulting services can help differentiate your agency, lead to higher premiums and restore access to the C-suite.

Expert agency staffing and compensation advisor, Michael Farmer states that,

Agencies must re-establish themselves on the strategic playing field, and add an upgraded “strategic brand and performance consulting” capability to the front end of their resource offerings. Furthermore, they must offer a full range of creative services — traditional creative, direct marketing, events / sponsorships and digital / social - under the leadership of these Client Strategy consultants.

There are many benefits for creating consulting roles for agency principals in small to midsize agencies or adding dedicated consulting groups for larger firms.

  • Consulting provides a new business magnet leveraging existing agency-client relationships and pitching new ones
  • Other new business opportunities are more easily derived from the consultancy
  • It pays more, offering higher compensation rates than advertising
  • It is a way for agencies to regain access to the CEO, CFO and COO
  • It allows clients to pay to work directly with senior agency staff
  • Prospects are willing to hire a consultant even if they have an agency of record
  • A consulting model doesn’t require a lot of expense and can use existing resources to get up and running quickly
  • Strategy work helps prevent them from being devised elsewhere without the agency’s involvement
  • Strategy work feeds an agency’s creativity
  • Get paid more for your agency’s most valuable product – ideas
  • Move away from charging for agency time and start charging for agency value
  • Consulting is often budgeted as a non-marketing expense by clients
  • Consulting allows agencies to define a particular target audience and create a positioning of expertise

The big agency networks such as Interpublic, Omnicom, WPP, have either established or are experimenting with adding consulting services for new business.  In a recent Ad Age article, Alexandra Bruell provided some examples of how these agencies are reinventing themselves by developing new consulting services.

Carla Hendra is the global chairman of Ogilvy Red, a 3-year-old consulting group within WPP’s Ogilvy & Mather agency network. Carla stated in a recent Ad Age interview,  “Clients are looking for strategic help … If we sell $1 of consulting work, down the road it can lead to $3 to $4 dollars of communications work.”

Tom Adamski, CEO of the Rosetta agency, states that about 50% of his agency’s total revenue comes from clients that do business with both the agency and its consulting arm. He said, “It has a halo effect. Everything we’re doing is driven off that consulting,”

Cheryl Giovannoni, managing director of Landor London, has said: “With ad agencies it is about short-lived campaigns, but brand consultancies work is more enduring because it has to transcend a series of campaigns.”

Is consulting among your agency’s services? Please share your thoughts in the comment section below.

Download a copy of OgilvyRed’s consulting brochure. Also view R/GA’s business consulting promotional video.

Additional articles that may be of interest:

About Michael Gass

Consultant | Trainer | Author | Speaker

Since 2007, he has been pioneering the use of social media, inbound and content marketing strategies specifically for agency new business.

He is the founder of Fuel Lines Business Development, LLC, a firm which provides business development training and consulting services to advertising, digital, media and PR agencies.

Comments

  1. Michael, amen to this approach! We made the decision to transform our “agency” organization because we fill the market gap between between the traditional management consulting firms that “owned” the board room and the ability to take accountability to execute the strategy. We call this the “Business of Marketing.” We discovered that once the CMO understand that they should think, act and operate their marketing function and processes like a business, then their need for a more strategic-led agencies/firm will grow.

  2. Thanks for sharing your insights Jeff!

  3. I read the article on Ad Age… Really like how you have expressed your opinions and instincts on the agency consulting model. I am moving myself and hopefully our agency into that direction as well and find we share a lot of the same thoughts. Great read!

  4. Thank you Hal. I look forward to hearing how it works for you and your agency.

  5. Makes all the sense in the world on paper. The reality is far different however because of cost, conflict and competitive factors. Not to mention that “Nobody ever got fired for hiring McKinsey (or BCG etc.)”

  6. Thanks for sharing your thoughts Joe. I think it is very doable but only if agencies are willing to identify with a narrower target audience and willing to differentiate to earn a positioning of expertise.