I’ve just read the article from The Drum (http://www.thedrum.com/news/2017/05/15/deloitte-could-move-acquire-engine-group-response-accentures-karmarama-buyout) suggesting that Engine Group could potentially be acquired by Deloitte. That’s some incredible journey for a group I played a bit part in at its inception 17 years ago. Equally, it makes sense in the continuing context of consultancies acquiring creative agencies.
There’s plenty of speculation on why this trend is happening, and what is means for clients and the long-term health of the creative industry.
My speculation focuses on client reporting, and why I believe these moves will be for the better.
Agencies are differentiated in many ways, people, culture, scale obviously, but operationally they are similar, and the systems and commercial data challenges mostly the same. Systems are generally in place to capture time, and agency staff grudgingly now accept the need to do timesheets.
In this context, it was also interesting to read Rance Crain’s article in the Advertising Age (http://adage.com/article/rance-crain/stan-richards-sell-path-mediocrity/309003/) on Stan Richards approach to timesheets and the case he makes for them in terms of “if they’re not filled out every day, they will not be accurate, and since time sheets drive every financial consideration, they have to be correct”.
He also brings in the inarguable concept of “respect”. Timesheets are what he requires to operate his business, and his people with respect to that need, comply.
These exceptions aside, consultancies have always been masters of time capture – in strong competition with lawyers, with their ingrained cultures and disciplines demanding adherence, and reward (or firing) intricately tied to billable hours.
Stan is not selling – for many good reasons, but for those agencies that are selling and to consultancies, it’s likely there will at least initially be more billable hours enticed out of their pools of talent.
This might be better for short term agency profitability, particularly in earn-out years, except that many agencies are already overworked, and scopes of work largely misunderstood in terms of resources and fair pricing for work. So attempts to squeeze more creative juice out of what is not a machine, doesn’t bode well for anyone longer term.
This however wasn’t my point.
Go beyond the capture of time in agency land, and this is where their system worlds really start to collapse, and will be one of the biggest challenge for consultancies, but with upside for clients.
Clients of course want optimal results for their marketing spend, more bang for their buck and all the associated analytics that go with that.
However, they also want plain, straight forward reporting of what is being spent and where, and this is where agencies typically fail.
Many agency systems either on their own, or in the stacked combinations deployed, struggle to produce the information to satisfy agency’s own internal reporting needs, let alone for how their clients want or need their relevant information.
The networks, faced with the challenges of global client account management, thousands of discrete jobs with resourcing, production, media and material elements to keep track of, every client demanding a different set way of billing to suit their systems approval/payment processes, have spent millions in customising systems.
And yet sadly, they still simply can’t get the data out - or if they can, it’s typically jockeyed in and around multiple spreadsheets, losing data velocity and costing ever more money to compile.
I had a conversation this week with the head of brand at a major consultancy, saying how her large network agency couldn’t provide her with the basic information she needed to understand how her budget was being used. Knowing the agency, and the system they have in – this is no surprise.
Admittedly agencies are increasingly bolting on business intelligence tools, and are making brave attempts with dashboarding and distributed reports – except their challenges remain with data integration from multiple sources.
Consultancies on the other hand are filled with systems experts, with the Big 5 even now offering their own systems applications for specific sectors, such as retail and financial services, so it’s not beyond them to crack the nut of developing integrated system reports on client marketing spend.
In this competitive upward spiral, my take is agencies should take note of what consultancies are doing and mimic them, if not fully their cultures, at least their approach to their systems strategies and the importance of getting data in and out, and proactively to their clients.
Clients will be delighted, and everyone will be better off.
About Agency DNA
I established Agency DNA in 2009 as an agency-focused business systems consultancy. I have a Big 5 background, deep agency and systems experience, and we now have the people, the systems and the vision for delivering the integrated solutions that agencies need, not only for their own reporting, but also for their clients.
 For an in-depth view on this, I suggest reading Michael Farmer’s aptly titled book, “Madison Avenue Manslaughter” (http://www.madisonavenuemanslaughterbook.com/).