Welcome to the latest Agency Wire, where we follow major trends in the communications and marketing industry.
Consulting Firms Claim Agencies Have Nothing To Fear
In the past several years, agencies have experienced an increasing amount of pressure as consulting firms increase their marketing services offerings. Senior executives at Accenture, KPMG and PwC have recently stated that rather than tying to work against them, the two should actually be working more closely together. Justin Papps, Partner and head of CMO Advisory at PwC recently told The Drum, "We have found there are generally two types of agency responses; one is gnashing their teeth and getting quite concerned, but, there is another group of agencies that have come to us and said ‘great, you're really good at what you do, we're really good at what we do, how can we work together?'" Many consulting firm executives argued that the divide between consulting and agency capabilities remains distinct, and that the point of differentiation largely centers around the fact that consulting firms aren't executing creative implementation. Without transforming the marketing function, no organization can truly embrace digital transformation of the business as a whole - which lays the foundation for agencies and consultancies to partner more closely going forward.
Agency holding group IPG has remained in the top spot on R3's latest Global Marketing M&A League table. They are followed by Chinese E-Commerce giant, Alibaba, who recently acquired minority stake in China's Focus Media Information Technology Co. AT&T remains in third place on the chart, off the back of their AppNexus acquisition. The biggest move in August came from Omnicom, who made their first acquisition in the management and technology consulting space, acquiring majority stake in Credera. Holding Company WPP also made their first appearance of 2018 in 15th place, with 11 deals under their belt for a total deal value of $274 million.
There is a new leader at the helm of the world's largest agency holding company, and the industry will likely be watching closely to see how Mark Read navigates challenges both within WPP and in industry as a whole. Many believe have speculated that he will bring digital savvy and speed to streamline the organization. According to R3 Principal, Greg Paull, Read was "surely the most logical solution for the group, it's impossible for 200,000 people not to find a natural leader amongst its brethren." Having been entrenched in WPP means Read comes equipped with a "strong knowledge of the group's top talent," Paull adds.
R3 is a global marketing consultancy focused on improving the effectiveness and efficiency of marketers and their agencies. Founded in 2002, we work with eight of the world's top twenty global marketers.
Through our regular "AgencyScope" research, now covering more than 1,000 marketers in China, India and other markets, we are learning about true client preferences for the best local agencies in each market and helping agency holding groups form strategic partnerships with the best local agencies.