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First half holding company results will tell us their likely fate at the hands of the consultants

Publicis Groupe is releasing its first half figures on July 20 when, amongst other things, we might discover if it needs to save the money it’s not spending next year on awards – whatever happens to A1 assistant Marcel.

In some ways Publicis has been the boldest of the holding companies, spending $3.2bn on IT consultancy Sapient in a bid to challenge the consultants, currently stalking the ad jungle. But, so far, it doesn’t seem to have extracted the value from Sapient that it hoped for, rather as it didn’t with the gaggle of digital agencies it’s expensively acquired over the past decade.

The consultants, on the other hand, are sitting pretty it seems. They provide so many services for clients that they don’t need to worry about being fired. They may lose some business from time to time but, unlike agencies, they’re never three phone calls from disaster.

Accenture has been busily buying agencies, notably Karmarama in the UK, and claims to be the world’s biggest digital agency although much of what it does could hardly be described as advertising. But, as consultant Michael Farmer, author of Madison Avenue Manslaughter, noted in a comment here the other day:

The consultants are 100 per cent dedicated to helping their clients figure out how to get brands growing again — and how to make the brands more profitable. The consultants will do a lot of analysis to develop the strategic plans, and then they will deploy the agencies they bought to do the marketing communications work.

The concept is simple: strategy, then implementation. The consultants do the strategy; their ad agencies do the implementation.

By contrast, what do standalone agencies do? What do they say they’re “all about?” Improved client results? Not at all. Instead, “we’re creative. We win awards. We develop Big Ideas.”

This narcissistic agency focus — what I call “the creative business” — is a failing business, characterized by declining fees, short-term relationships, downsizings, low salaries, poor morale, lack of client respect, and..most of all..a failure to deliver improved results for clients. The creative business is vulnerable to competitors who focus on delivering improved results.

Ouch. No wonder WPP’s Sir Martin Sorrell has said recently (in relation to his media agencies) that it’s all become too complicated for clients to understand although SMS himself has been one of the architects of that.

Campaign’s Gideon Spannier reports that there was a rumour in Cannes that WPP had approached Accenture – or the other way round. This was rubbished by Sorrell and doesn’t look very likely, at least in WPP’s case as it’s so big and diverse. Why would Accenture want all of it when they can cherry pick the creative (and, maybe, media companies) from elsewhere?

But it shows the problem the holding companies face. When Publicis and its rivals report their first half figures we’ll know more. No growth, as in Q1, will turn a problem into a shareholder crisis.

PS: There’s another rumour going round, to wit that Accenture, which was originally the creation of imploded accountancy firm Arthur Andersen, is thinking of going back into auditing. Is it running out of things to do?

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