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Why the experience age is closing the gap between consultancy and agency

experience age advertisingTraditional advertising is squaring up to the challenges of the experience age. John Riccio looks at the place of consultancies in an era of data-led strategy.

From the outside, you could observe that the advertising industry is on the up. In the US in 2016, agency revenue rose 4.4%, breaking records to reach US$48.3 billion¹. Digital agencies are rising too – they make up nearly half of US agency revenue, up from a quarter in 2009.

For us, of course, we were proud to rank among them. PwC is now one of the world’s largest digital agency networks, coming in fifth place earlier this year in AdAge’s Agency Report 2017.

But it’s a phenomenon that isn’t without controversy. If you’re a regular reader of marketing and advertising publications you’d be hard pressed to avoid the debate around consultancies moving into what might be considered traditional agency territory.

Acquisitions of creative agencies by our competitors, even the appointment of advertising stalwart Russel Howcroft to PwC Australia as Chief Creative Officer, all raised questions around the future of the industry and the viability of the players within it.

Much of the debate has focused on the perception that consultancies are jumping into new territory. In fact, both agencies and consultancies have been moving closer together for years. They’re occupying an expanding universe of client demand, thanks to a new era of consumer behaviour and technology.

Advertising in the experience age

The information age is giving way to the experience age. Fuelled by the power of computer technology, the information age was about the production and consumption of information. In a marketing sense, this meant awareness: largely a one-directional stream of advertising. The volume of information and messaging in this format, though, has reached a level that naturally, consumers have grown tired of.

With greater digital capabilities came the ability to identify and interact with the individual in completely new ways. Enter the experience age. Customers no longer just consume information, they fashion it, they curate it, and the data travels both ways. Technologies such as artificial intelligence, chatbots, and social messaging are opening up the intelligent experience economy, in which the relationship between customers and brands is turning from a one-way broadcast into a flow of ‘conversations’.

Multiple channels, greater competition

The experience age has brought with it a challenge to brands. Consumers have expanded their repertoire of consumption – adding multiple media channels spanning the online and offline worlds. They’re also less loyal, quick to move on to the next provider that offers them more satisfactory customer experience. Brands have to work harder than they used to, offer more than they used to and appeal to a different set of expectations and criteria than they’re used to.

What this means is that to survive in today’s business world requires a solution more broad than advertising or creativity alone: it involves greater investment in the brand strategy, it relies on stronger technical capability, and it demands business model innovation. These are the collective concerns of an enterprise, not just the marketing department.

Marketing and the C-suite 

A final element – and perhaps the most significant in this context – is how the focus of leadership is shifting within large organisations.

Traditionally, marketing has been a cost centre for the C-suite, and a rather opaque one at that. It was difficult to get a handle on return on investment: how much revenue does a billboard or TV advert generate? As a result, marketing was often seen as a black box by CEOs, and not their focal point.

The new reality is that businesses are facing disruption and harder economic times. The first place they’d usually look to make cuts is marketing. However, with a lot more spend now going into digital channels than traditional ones, results are more measurable. Strong data analytics capability allows a better understanding of effectiveness – and this has grabbed the attention of those who’ve been seeking greater transparency all along: the CEOs and CFOs.

There’s another element to this. It could be argued that the chief marketing officer is morphing into more of a chief customer officer role. It’s turning from ‘How do we sell this product or service?’ to ‘Where do we find the customer, how do we get them and how does our brand keep them?’ – which is a more strategic line of thinking than a campaign-driven approach.

With businesses becoming more customer-led, the first port of call is marketing. Therefore the C-suite is increasingly taking the view that brand is a whole-of-business concern, and marketing is a top-line growth area, not just a cost centre.

Which brings us back to consultancies such as PwC. What is our role? We’re often accused of being number crunchers but, here, that’s a vital element. The importance of data in informing business decisions can’t be underestimated, neither can the value of data in enforcing rigour and return. Those forensic assurance skills are something we’ve built over a very long time, and they’re what the C-suite is asking for.

Where strategy meets creativity

The experience age has delivered brands a more complex set of challenges than ever before, demanding a breadth of capabilities all the way from brand strategy across corporate strategy, operations, technology and customer experience.

Whole-of-business transformation, customer experience and data analytics are things that consultancies are well versed in.

For the last 15 years or so, agencies have also stepped further into the growing strategic space, too: it’s more of a meeting in the middle than an encroachment on each others’ territories, with consultancies consolidating on any overlap with a pointy end that few are moving into and an execution capability that agencies don’t have.

Yet, there’s great opportunity for interplay. Agencies have a talented and unique skill set, with their own approach to creativity and lateral thinking. The role of consulting is very much a strategic lens to drive and initiate change in the right way and help organisations on their growth path. Agencies play an important role in interpreting that brand strategy into creative connectedness but don’t usually go beyond that. The power of the two combined can be phenomenal.

 

1  http://adage.com/article/agencies/ten-agency-facts/308784/

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