Consultancies lagging behind in the adoption of digital marketing

10 October 2018 Consultancy.uk

Management consultancy firms are facing a worrying gap between client sentiment and activity, according to a new report, which is posing a threat to firms’ abilities to adapt for the future and evolve in-line with clients’ needs. Melissa Hernandez, Senior Digital Marketing Executive at Propero Partners and one of the authors of the study, reflects on the report’s main findings.

In the ‘State of Digital Marketing in Professional Services 2018’ report, the team at Propero Partners surveyed senior decision makers across professional services firms, including management consultancy firms. The respondents came from firms of varying size, with differing years of operation.

Traditionally, management consulting firms relied on referrals and word of mouth to grow, but in today’s digital age, with its abundance of choice – and the technological freedom to search through and access these options – reliance on this type of strategy is simply no longer enough. The old networks are disappearing, mostly due to generation change in the workplace, and in part down to the move towards using advanced technology and a digital marketplace.

Growth now depends on placing a consultancy firmly in front of its target audience, using the correct types of marketing, having the urgency to make the firm attractive to the client, and of course, the knowledge and skills needed to convert these leads. And even though 75% of the management consultant respondents realise the need to go digital in relation to their marketing, this realisation hasn’t yet become a reality. In other professional services firms, such as those in the legal or financial industries, the use of digital marketing and strategy is becoming commonplace, despite a slow process to get going.

Marketing methods of management consulting firms

The study found that a large proportion of management consultancy decision makers consider marketing superfluous or not worth investing in, even though it has been proven in other industries to garner great results. For example, of the management consultancy firm respondents, only 13% invested more than £20,000 per annum in marketing. But the most disconcerting results stem from the discovery that a staggering 53% (down only 6% from last year) don’t invest any budget, and 15% are not using any digital marketing, at all.

This is particularly surprising considering that many of the consultancy respondents work with and alongside these other professional services. They offer services centred around innovation, effective change and progression, with the onus being on adaptability and agility. But how can they provide these services if they aren’t keeping up to date as much as the industries they work with? It is a brave game that many consulting firms are playing. 

Client development

By lagging behind in the adoption of digital marketing, consultancies could be sabotaging their client development, because who would work with a consultancy that doesn’t practice what it preaches? However, there are some early adopters. Within the management consultancy industry, there is an alarming gap emerging between firms who invest in marketing and those who do not. Those firms that invest in marketing get many more client enquiries per month, and those who don’t, get much fewer than their peers. This difference, when taken to its logical conclusion, means the firms that don’t invest will fall further and further behind and, eventually, will be unable to bridge the gap.

Another major problem for consultants is that they appear to be utilising the wrong channels. Despite a shift towards acceptance of digital marketing methods in consultancy firms, it’s clear from the lack of return they see, that they don’t know which channels are best for them and are still in ‘trial and error’ phases. This so-called ‘hope’ marketing rarely works, and can cut a big chunk out of a budget.

Number of enquiries versus referrals

Generally speaking, however, consultancy firms are getting new leads. For instance, the average management consultancy firm will receive between one and five each month. It becomes interesting when looking at how they convert: referrals win out, with 27% of firms converting 45%+ of the referrals they get. Yet only 17% of firms convert 45%+ new enquiries they get from their marketing. This could mean that consultancy firms are still placing more emphasis on winning referrals, rather than treating them both equally, and this is a problem.

In the coming years the need for consultancy firms to differentiate themselves from the rest is only going to become increasingly important, and to do this firms must embrace digital marketing and budget accordingly. Investment is no longer a choice but a necessity: without proper time and resources, consultancy firms will fall by the wayside, and in a marketplace with an overabundance of choice, this can quickly become untenable. 

If firms are disillusioned with marketing – spending too much time trying to decipher what works and what doesn’t – there’s no better option than to seek the support of an experienced supplier. Specialist expertise in areas such as content strategy, online advertising and/or brand awareness will cut down the costly trial and error periods. This in turn will boost knowledge and create a shortcut to success.

Related: High growth consulting firms are specialised and invest in marketing.

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Accenture's push into the creative sector is an identity crisis

18 April 2019 Consultancy.uk

In its latest push into the creative sector, Accenture Interactive acquired New York and London-based ad agency Droga5 earlier this month, adding illustrious clients such as HBO, Amazon and The New York Times to its roster of clients. With the latest in a long line of similar purchases, Accenture Interactive further demonstrated its ambition of becoming the globe’s leading trusted advisor to chief marketing officers. Yet according to Ben Langdon, Chairman of Class35, Accenture’s strategy may be heading in the wrong direction.

A press release on Accenture’s website announcing the acquisition sits next to a quote stating that “brands aren’t built through advertising” – a huge contradiction from a consultancy firm hell-bent on becoming the ‘CMO agency of choice’. It’s not alone of course. The entire consulting industry wants a piece of the creative pie right now. In addition to Accenture Interactive, recent acquisitions by PwC Digital, IBM iX, and Deloitte Digital meant that in 2017, for the first time ever, four of the world’s ten largest creative agencies were consultancies.

So just what it is that Accenture wants to achieve from this? For one thing, it’s clearly trying to be a digital transformation business. A one-stop creative shop rivalling more traditional models, it wants to lure CMOs in with the promise of lower ad spend and a “more impactful customer experience”. At the same time, though, it’s still in thrall to those same slinky, shiny branding and advertising agencies it’s attempting to disrupt. The Droga5 acquisition and that of Karmarama a few years before are both testament to this.

There’s a fundamental problem with this, though. Digital transformation businesses don’t sell to CMOs. These people have enough on their plates trying to transform their own marketing skills in order to keep up with an ever-changing market – they just don’t have the time or the energy to concern themselves with digitally transforming a whole business. If Accenture’s purpose is digital transformation, then going after creative agencies is barking up the wrong tree.Is Accenture's push into the creative sector an identity crisis?

Worlds apart

Perhaps more importantly, these two industries are worlds apart in terms of the way they think. Creative agencies are all about ideas, campaigns and consumers. Digital businesses, on the other hand, are customer-driven – they think in terms such as lifetime value, measurement, and efficiency. Customer-led thinking is an entirely different beast to consumer-led thinking.

The reality is that the arrival of digital and an all-encompassing obsession with technology, measurement and social has led to the death of agencies in a reductive, zero-sum, efficiency-focused battle with brands. Indeed, agencies have become so obsessed with the latest tech fads, they’re beginning to forget how brands work. Worse still, they’re beginning to forget how brands are built. And, by forgetting, they’re destroying their own values.

Killing creativity

All things considered, it really feels to me as though Accenture is a chip leader in a game it doesn’t understand. Expensive acquisitions like these show that they’ve got the big money, but they don’t appear to have any idea what they’re doing with it. Take talent, for example. The best talent in the creative industry right now is out in the market; it’s not tied to any one agency. Both agencies might well be at the top of their game, but why would a consulting firm waste so much money on buying them when they could hire high-quality creative talent on a contingent basis instead?

As their presence in the top 10 creative agencies shows, there is a growing trend in which Accenture, like many of the other big players, are buying up agencies as if they were nothing more than keywords. What they’re really buying, though, is a collection of credentials, clients and IP. Unfortunately, the talent that created those credentials aren’t going to stay at the business, the clients that hired the agency in the first place won’t be interested in buying what is basically just another part of Accenture, and the IP never really existed to begin with.

Droga5, for example, was one of the few agencies that did great brand work the old-fashioned way – undoubtedly something that made it attractive to Accenture in the first place. The irony, though, is that by leading it further away from the way of working that made it so special, the consulting giant will kill its creativity.

“Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record…. But, in flashing its cash, it is spending millions on acquiring nothing of any value.”

If pressed, the recently acquired agency staff at Accenture will tell you just how dysfunctional the new arrangement is. They’re largely unfulfilled. Rarely do they feel their work has any sort of meaning or purpose. What’s more, the different disciplines have found little or no common ground, and find it hard to work together as a cohesive whole. It’s not surprising, then, to see talented people leaving in droves.

Beyond the window dressing 

It’s clear, then, that consulting firms and creative agencies are no easy bedfellows. But in his company’s defence, Accenture Interactive’s Senior Managing Director for North America, Glen Hartman, described its culture as being “far, far away from what a stereotypical consulting firm would look like. Our office and studios look a lot like Droga5’s.”

In demonstrating a belief that office design equates to workplace culture, this statement serves as an illustration of how confused Accenture is right now. It wants to justify its new strategy so badly, it’s started dressing like a creative agency. But if you look beyond the window dressing and see that you and your partners are speaking a different language with a different purpose, selling to different people in a different market, there’s no getting away from the fact that you’re different.

Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record, and it wants to dazzle others with its new direction. But, in flashing its cash, it is spending millions on acquiring nothing of any value.

Related: Space between consulting firms and creative agencies is converging.