This news should be welcomed by everyone in the ad agency business who has ever feared the encroachment of consultants on their turf. Since the 1990s, when consultancies such as McKinsey & Co. and Booz, Allen & Hamilton became big, agencies have suffered from an inferiority complex about them: What if they steal my clients, and replace my advice with theirs?
Yet agencies need not suffer from consultant-phobia. While clients may periodically swoon in their presence, they ultimately return to agencies when they actually need to get the job done. The lesson here is that specialization and good old-fashioned inertia can actually be an agency's friend, and that there's a value in being a rote provider of ad services and not a "strategic partner," as most agencies prefer to think of themselves.
Let us look at the history: A long time ago, in a galaxy far, far away*, a fabled New York agency called Ammirati Puris Lintas became so afraid of competition from consultants that it actually hired a McKinsey man, Rick Hadala, as its CEO. How did that work out? Terrible. He lasted seven months before he quit. APL no longer exists, having been folded into the Lowe Worldwide mess.
This, in fact, is a repeated pattern in the business. Here's an old article about agencies fearing that account planners will be killed off by consultants (and here's another on the same theme). Here's one about media agencies fearing they'll be replaced by consultants. This is one about agency holding companies being so afraid of consulting firms that they want to buy some of them. (Articles about consultants in the ad biz are a bit like buses -- if you miss one, don't worry. There'll be another one along in a few minutes.)
Consultant-phobia reached its hilarious zenith in 2000, when the CEO of Razorfish went on 60 Minutes and was asked what his agency actually did. He was so wrapped up by his obsession with management-speak that he was unable to answer the question. Instead of saying, "We make web sites for advertisers," he burbled, "We've asked our clients to recontextualize their business." (It's a hilarious piece of gotcha! television if you ever get the chance to see it.)
Fast-forward to the present day and it turns out that Razorfish and R/GA, both digital agencies, are still ashamed of the business they're actually in and would like to be regarded as partners or advisers rather than as makers of digital advertising stuff.
Agencies should remember that they do the one thing that consultants don't do: make advertising. It's a humble but valuable task. Clients need it. And even if there's a consultant hovering over the client with a PowerPoint show, someone still needs to come up with something that consumers will actually find useful or entertaining.
It's one of the easiest success strategies to employ in the agency business: Stick to your knitting. If a client is given the choice of hiring an advertising agency that's pretending to be a consultancy or an actual advertising agency, which do you think they'll pick?
*Oh, all right. It was 1998. Image by Flickr user C1ssou, CC 2.0 Related: