Magazine article ADWEEK

Agencies Make Strategic Pray: More Agencies Are Building In-House Units to Get a Piece of the Business Usually Handled by Management Consultants

Magazine article ADWEEK

Agencies Make Strategic Pray: More Agencies Are Building In-House Units to Get a Piece of the Business Usually Handled by Management Consultants

Article excerpt

In a classic Mad Men scene, Don Draper pitches a new Lucky Strike commercial to a room full of the marketer's most senior executives. Such meetings that used to be routine have become a rare thing of the past.

"With the CEO, CFO and CO0, agencies in this country just don't have that access anymore," underscored Brian Wieser, senior analyst, Pivotal Research. "Back then if your numbers lit up, the CEO would be able to distinguish whether a TV commercial worked or not. As marketers got larger and more factors could impact sales, business became much more complicated and agencies didn't evolve accordingly."

Agencies are making up for that now by taking back strategic services from management consultants like McKinsey & Co. and Accenture. But rather than expand their capabilities via acquisition, agencies are creating new specialty units from within. Ogilvy, one notable example, launched strategic consultancy OgilvyRED in May 2011; it uses an open-source approach drawing on 21 Ogilvy units-from digital and Health and entertainment to cross-cultural, green and Islamic branding-plus other resources at corporate parent WPP.

Other agencies are developing new expertise on a smaller scale, like The Morn Complex at The Martin Agency and TBWA\ Chiat\Day's new content arm, Let There Be Dragons.

This "build-it-yourself" model contrasts with how agencies expanded resources and developed new revenue streams in the past. Examples include JWT buying Digitaria two years ago and WPP adding digital shop VML and attaching it to Young & Rubicam in 2009. …

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