Hot on the heels of Musk and Zuckerberg announcing that they’re going to get their little willies out for a cage fight, I bring you news of a less interesting but more consequential battle…well, if you’re into brand strategy, that is.
I’ve been banging on about the synergies between brand strategy and management consultancy for years, mostly to a thoroughly disinterested audience. To be fair, the ad agencies have tended to be more enthusiastic whilst the management consultants have just been, well, typical management consultants who already think they know it all. But it just seems so logical to me. I first got the bug back in 2004 and tried to talk to McKinsey about it but got no traction. I tried to take the agency I joined in London in 2009 in that direction. When that failed I approached all of the big four about the obvious opportunities but nobody responded.
I’m not naive or arrogant enough to think I’m the only brand strategist who believes this but it bothers me that it hasn’t become a massive thing. The relationship between brands and business strategy is so blatantly obvious and yet very few agencies or consultancies have had a proper go.
However, maybe it’s starting to happen? Earlier this month I was doing some revenue analysis and discovered that, for the first time, I’ve done more work with management consultants and auditors than I have with ad agencies in the last 12 months. It’s a trend that has accelerated since the pandemic. Has anybody else experienced this? Are we finally at a tipping point?
Either way, something’s happening. In the last year, I’ve had detailed conversations with three of the world’s top ten professional services firms about brand strategy. Serious grown up conversations around how to incorporate branding into their suite of services. I’ve attended meetings with some of their clients, who were previously protected and strictly off-limits, and am now regularly sub-contracting to one of them as their resident brand strategist. At the same time, a few brand strategists have joined investors and private equity houses to oversee their portfolio of brands, most notably Jonny Bauer as Head of Brand Transformation at Blackstone. Brand is going upstream.
There are a range of reasons but the most notable is that these companies have woken up to the financial opportunity. Last year the average value of a global best brand in Brand Finance’s brand valuation survey surpassed US£3 trillion. Whatever you think about the merits of brand valuation (and there are many issues – check out some of Mark Ritson’s comments on it), that’s one heck of a number. Brands are amongst a company’s most valuable and impactful assets – it makes absolute sense that they should be a fundamental part of business strategy rather than confined to the marketing and creative margins.
The ad agencies and brand consultancies aren’t standing still either. They mustn’t. They know that somebody wants their lunch. Some are employing more business focused strategists but even when combined with their creative superiority they are at a disadvantage. They don’t have the same deep pockets or c-suite relationships that the large professional services firms have. This last point is important – the latest CMO Survey (Duke University/American Marketing Association/Deloitte) has identified a decline in both the influence of CMOs in the C-Suite and the likelihood of a CEO having a marketing background. When you consider that most ad agency relationships are with the CMO at best, it means that in the battle for brand supremacy, whilst the professional services firms might be playing catch up they have two extra weapons – relationships and money. The big consultancies are also acquiring creative capability by buying agencies, like Accenture’s purchase of Droga 5 and Deloitte’s acquisition of ACNE, or officially partnering with them, as Oliver Wyman has done with Lippincott. These are smart commercial moves.
The stakes are high. Ad agencies and management consultancies are competing for a global brand services market that is worth almost US$40 billion a year. Brands have always been big business and, despite reports to the contrary, they’re getting even bigger.
It’s going to be interesting to see how this develops. My head says that the management consultancies will use their stronger c-suite presence and deeper pockets to edge ahead but my heart hopes that the ad agencies will find a way to respond in kind. No matter how powerful the consultancies are, they are nowhere near as good at communication, empathy or engagement, all of which are critical to brand success.