Tom Denford and David Indo from ID Comms: the rise of the consultants

In this week’s #MediaSnack Tom and David discuss the rise of the consultants and ask where do they go next in the battle against the holding companies.

They look at the latest Ad Age analysis of the advertising market. The figures show the speed at which the management consultants have gained revenue from marketing services. In just five years, they have moved from 0.6 per cent share to a 12 per cent share.

The management consultancies are also growing significantly faster than the holding companies so would expect to continue to gain share in the year to come.

Tom and David point out that that this growth comes entirely from strategic thinking and creativity, arguably commercialising an area where the holding companies have failed.

These numbers come out at the same time as the big holding companies announce their Q1 results. By contrast they are a mixed bag with an average 1.7 per cent organic growth year on year. Sir Martin Sorrell warned that competitors had been making commitments to advertisers that were unrealistic.

The next step for the consultancies is to start buying media. Tom and David argue that they are likely to come up with a smart and more transparent offer than that currently on offer from the holding companies.

However, they will have to address some perceived conflicts. Tom and David believe that their current business of auditing is unlikely to be commercially attractive enough to stop them making the decision to move towards buying.

The result of all this change, they argue, is more choice for CMOs. The challenge for brands will be to be much clearer about their scope of work and the way they choose to stress test new and old entrants to the market.

Ultimately, the holding companies will have to raise their game because the rules and the competitive set are changing dramatically.

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