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Mini management consultancies: marketing’s next hot startups?



Much has been made over the past few years of the threat posed to traditional ad and marcomms agencies by the management consultancies.

This was especially true when Karmarama, one of the last remaining London indies of any scale, was snapped up not by a WPP or Omnicom, as one might expect, but by consulting giant Accenture in November 2016. The result was perhaps the first 'cagency'.

However, the expected rash of similar 'big four' ad group takeovers never really happened. The reasons for this are complex and we’ve written about them before, so I won’t go into depth on those here.

But suffice to say that there are few big entities left to acquire. Accenture’s big rival, Deloitte Digital, acquired no fewer than nine marketing services agencies last year, but the likes of Market Gravity and Acne can hardly be said to be McCann or O&M-size operations, whatever other qualities they may have. And there is undoubted resistance among creative types to being gobbled up by a management consultancy.

I don’t think the consultancies’ interest in advertising is over, or that a big move or takeover won’t happen, I just don’t think the world is quite ready just yet, but there is an increasing number of brand owners showing a greater interest in the consultants’ approaches.

Instead of going over that old ground, I’d like to put a different spin on things. What if the next generation of hot shops to be circled by the M&A world were not traditional funky London, Amsterdam or Portland startups, but mini management consultancies?

It’s not as outlandish an idea as it might first seem.

Just recently my Green Square colleagues and I have been working with an impressive disruptor operation called ORCA, and the way in which they work got me thinking about what the hotter than hot, eminently M&A’able startup of the near future might look like.

ORCA describes itself not as a marketing services agency… but a “brand growth agency”. It doesn’t fixate on making old-fashioned ads, but instead begins with a set of fundamental and challenging questions around brand and business, operating to five key ORCA principles, all designed to deliver clients growth and help them manage change in a fast-changing world.

It specialises in a number of areas, not all of which one would associate with the more old-school advertising agency: identifying growth areas and potential; business planning; brand strategy; “course correction” (helping a brand or client change its direction or strategy, if necessary); branded content, activation and “brand guardianship”; identifying future opportunities; tracking performance and planning/executing responses as necessary.

The ORCA founders – Craig Wills (an agency strategy leader and startup entrepreneur) and Simon Pont (a former agency group chief strategy officer and best-selling author) – say they don’t focus on creative output as such, but on “brand growth and competitive advantage” – which sounds like the sort of thing a consultancy would say it does.

Wills is singularly direct when he says, “The way brands can and should be built has changed. There are smarter ways of working, thinking that doesn’t follow the tramlines of past convention, and new ways of activating brand strategies with an urgency and impact that is commercially quantifiable and culturally profound.”

ORCA takes a very “scientific” approach, using all the technological goodies – AI, predictive mapping, data science – at its disposal.

So, in a four-step process, the agency gathers intelligence and analysis on the brand, its customers and the wide landscape; it then uses the intel to identify opportunities (or threats); creates a programme to deliver the opportunity; and monitors its progress, adapting if appropriate. Of course, many of the skills it brings to the table – such as copywriting or design – would be part of any traditional agency’s remit; but others (road-mapping, packaging, trendspotting, cultural change programmes) wouldn’t necessarily be.

As Pont candidly challenges: “It’s 2018, meaning clients want an evolved set of agency skillsets – and they want partnership on a different set of terms. As opposed to paying punchy monthly retainers, agency resources are something a client should be able to dial-up and down, based on commercial targets, budget and funding rounds. A true partner business needs to be smart, strategic and simpatico."

Interestingly it can offer both a “consultancy model” (a fixed-term contract) or the more familiar “agency retainer”, with a licensing model for the tools. How this is put together depends on the client, its needs, the task and the budget. It’s a flexible approach that will win you friends in an era of huge disruption.

The Orca approach seems to be working as it is experiencing positive traction with new clients operating in a broad range of categories from financial services to B2B, tech to education and global luxury consumer brands.

Why is this? I think it’s for a number of reasons. It will use – or seek out – everything (not just creative or strategy but market data, business intelligence, legal requirements) to shape the vision of all the stakeholders – and then put it into action.

The big management consultancies have been doing something like this for decades. They attempt to solve problems and manage change or transition. Where they don’t possess the internal skills to manage this, they’ll bring in external contractors or partners.

Some forward-thinking agencies do this as well. In some quarters this approach is known as the 'Hollywood model'. The 'agency' acts as a kind of movie producer or director, assembling the right team of talents to bring the project to fruition – it’s the way Hollywood has largely worked since the collapse of the old studio system in the 1960s, when most of the big stars started to sign up for individual projects rather than being tied into long-term projects with a particular studio. Movie makers realised it was much more profitable to draw on a vast pool of freelance talent than rely on a large in-house workshop.

And so it is with smaller agencies, especially startups. Marcomms outfits like Orca are morphing into miniature consultancies. They will be more (relatively) profitable than a big shop with fat payrolls and infrastructures, and they can be much more nimble, which, in a fast-moving digital world, clients like. The clients also like the greater transparency offered by the “consultancy” model – they can see who’s being paid how much and for what.

But Orca and shops like them also bring something to the table that the big consultancies usually don’t – an understanding of consumer or customer behaviour. There was an interesting piece in the FT recently about the long and largely ignoble history of rebranding and corporate makeovers (Post Office to Consignia, Dunkin’ Donuts to Dunkin’ et al). These expensive makeovers are usually well-intentioned and often done at the urging of consultants; what one ends up with is usually something meaningless, and or long-winded (it actually takes longer to say “WW” than the pre-makeover “Weight Watchers”) and unpopular with the most important of a brand’s stakeholders – its customers.

A decent ad shop would look at the strength of a brand, understand the customer’s feelings about it, and act accordingly. Consultancies tend to look at other metrics and stakeholders, such as investors – a rebrand might lead to a short-term stock price hike, but overall, it has little effect; for consumers, the effect is often negative and usually results in much mockery from the media.

Earlier this month, researcher Forrester shared its CMO predictions for 2019. One of the interesting things Forrester found was that 2019 “will be the year CMOs prioritise strategies that harness their customers’ energy and then use that collective vivacity to reinvigorate their brand”.

The other thing Forrester predicts is that CMOs will be looking at “old school” marcomms – in other words, after years of focussing on tech and data, the way to cut through clutter is to concentrate on brands and their promises and essences again. Customer experience, not piles of data or split-second programmatic ad placement, will be what counts.

This is something the very best “old school” agencies do very well, and it’s something consultancies couldn’t. To do it, they are having to learn, or buy in. Buying in (or up) is easier.

There was another move in this direction last month (31 October) when PA Consulting acquired Essential Design for an undisclosed sum.

PA Consulting describes itself as a “global innovation and transformation consultancy” (with offices in the UK, Europe and the Americas) specialising in strategy, innovation, product design and engineering and manufacturing process improvement. PA’s clients include Virgin Hyperloop One (transport) Skipping Rocks Lab (sustainability) and Monica Healthcare (pregnancy monitoring).

As such, Essential is a perfect fit. Based in Boston, USA and formed in 2001, Essential has clients in the consumer (Shure, Altec Lansing, Dell), life science (Robot Futures) and healthcare (Philips) sectors. Its team of researchers, designers and engineers “inform and translate innovation strategy, to create breakthrough physical and digital products”. Essential’s work has won international recognition and received numerous industry awards for excellence in design research, design strategy and design development.

As a visit to its website will confirm, Essential does much more than just “design” products. It offers research, strategic consulting, quality and project management, engineering and, of course, industrial and service design. Pretty much a consultancy-style “end-to-end” solution. But with a healthy focus on customer experience and brand promise.

How, you might ask, are outfits like Orca and Essential marcomms agencies? The answer at its heart is simple. Advertising and marketing isn’t that complicated – it aims to do two things: solve problems (for the client and end user) and change behaviour.

For the end user, this might, for example, manifest itself as providing information or entertainment (or some other 'reward') so that they buy Product A, or buy more of Product B; or getting them to recycle more, or stop smoking or eating too much fatty food. For the client, this might mean changing internal or cultural practices so that identified problems can be solved, or that end users can be better engaged.

This is essentially what the consulting firms do (if they’re doing things right, of course), but there are crucial bits of the jigsaw missing, which is where the convergence we’ve been exploring comes in.

This morphing of startups into consultancies is an interesting development – but it’s just one of many mutations happening right now.

Barry Dudley is a partner at M&A advisory Green Square

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10 questions with… Anna Watkins, UK managing director of Verizon Media



In an attempt to showcase the personalities of the people behind the media and marketing sector, The Drum speaks to individuals who are bringing something a little different to the industry and talks to them about what insights and life experience they can offer the rest of us. This week's 10 Questions are put to Verizon Media's UK managing director Anna Watkins.

What was your first ever job?
It would have been washing my dad's car to earn my £1 pocket money each week. Smart man.

Which industry buzzword annoys you most?

Who do you find most interesting to follow on social media?
@POTUS is truly mind-boggling.

what is the highlight of your career (so far?)
Working with such a creative, inspiring and intelligent bunch of people every step of the way.

What piece of tech can you not live without?
It's baffling that I was born in London yet still seem to use Citymapper every day.

Who or what did you have posters of on your bedroom wall as a teenager?
Adam Ant and Count Dracula (aged 7). I'm not quite sure what that says about me.

In advertising, what needs to change soon?
We need a truly diverse workforce.

If you could change anything about a social media platform you use, which one and what would you choose to do?
It’s more a question of changing myself – I need to flex my creative muscles if I’m ever to make more than one friend on Tumblr…

What is (in your opinion) the greatest film/album/book of your life?
Scarface / Sign of the Times / War and Peace – delusions of grandeur, mine and theirs.

Which industry event can you not afford to miss each year and why?
The big awards bashes – it's like going to a series of weddings where you know half the guests.

The Drum's 10 Questions With… runs each week with previous entries available to view here.

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Mobile carriers end data sharing with location aggregators; should marketers worry?



The collection and use of real-time mobile-location data has emerged as a critical piece of the larger data-privacy debate. A recent run of negative stories have conveyed the impression that location data usage by marketers is tantamount to spying on consumers.

We’re also starting to see lawsuits, like one recently filed by the Los Angeles City Attorney against the Weather Company, for allegedly misleading consumers about how their location data would be used. More suits will likely follow.

Carriers cut off data sharing. The negative coverage and exposure of some high-profile abuses have motivated major U.S. mobile carriers to cut off location data sharing with third party “location aggregators.” The latest to do so is AT&T, following a story by Motherboard that indicated carrier data was getting into the hands of unauthorized third parties — bounty hunters, in this case — and being used for legally dubious purposes.

As a practical matter, these moves are unlikely to significantly impact use of location data by advertisers on major platforms or in the programmatic ecosystem. AT&T owns AppNexus; Verizon owns Verizon Media Group (the rebranded Oath). Location data will probably still be available to advertisers on these platforms — they’re not “third parties.” (We’ve asked Verizon for clarification on this point and will update the story if they respond.)

Calls for more regulation or legislation. Location data are so valuable and widely available that abuses are inevitable. Some of these increasingly frequent reports are adding momentum to calls for federal data privacy legislation. The carriers’ decision to cut off location aggregators is at least partly an effort to preempt investigations and potentially forestall regulation.

Some location data companies embrace the proposition of clear regulatory or legislative guidelines, however.

For example, PlaceIQ CEO Duncan McCall recently told me in email: “I think that the California Consumer Privacy Act and hopefully a similar federal law (as a state-by-state patchwork of different laws would be good for no one) will not only give consumers protection and confidence, but will finally give the digital data and location data ecosystem a well-thought out set of rules and guidelines to adhere to. This will bring stability and predictability to the industry, and help weed out some of the “wild west” players that have had no interest in investing for the long term good of the ecosystem.”

Most location-data companies also say they adhere to ethical data-collection practices and are scrupulous about being “good actors” in the ecosystem. Some are vocal about the responsible and/or socially beneficial use of location technology. And some organizations (e.g., NAI) are seeking to enforce transparent and ethical data collection standards. Foursquare told me in email that their apps and partners seek opt-in consent for use of location data.

Why you should care. Location data is available from a wide range of sources in the market, including app developers and the programmatic bid stream. The loss of carrier location is not a significant blow to the ecosystem.

However it is reflective of a trend toward the tightening of access to location information more generally. While it remains to be seen whether federal privacy legislation passes in 2019 (multiple bills have been proposed), California’s Consumer Privacy Act will go into effect January 1, 2020. Other states may enact similar or more strict laws, which would lend further impetus to comprehensive federal legislation.

The post Mobile carriers end data sharing with location aggregators; should marketers worry? appeared first on Marketing Land.

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Catalina adds first attribution tracking service



Best known as a provider of retail marketing intelligence based around loyalty cards and in-store printed coupons, Catalina this week released its first attribution service.

Called Catalina Multi-touch AttributR, it traces a path from digital advertising — in various channels on various devices — to a purchase made in a store with a loyalty card. The company is able to track purchases down to the UPC bar code level.

At the level of the Diet Coke flavor. Coca-Cola, for instance, can now track how a web site ad shown on a computer affects the purchase of a Diet Coke, as well as whether the flavor chosen is Twisted Mango versus Ginger Lime. Additionally, the attribution service can report if it’s the first time this consumer bought Twisted Mango.

Previously, Catalina measured how its printed in-store coupons affected buyer behavior, but it didn’t track the impact of ads. The new attribution solution is the company’s first effort to link digital ads to buyer behavior, and it plans to add addressable TV ads to the system.

Catalina tags the digital ad with its own attribution pixel, which is called when the ad is shown and provides data on the specific campaign deployments.

But the connection between the ads shown, the various devices used by a single individual, and the in-store purchases are actually made by consumer data firm Experian on Catalina’s behalf, through such persistent identifiers as phone numbers or email addresses.

“Not in the business of knowing who you are.” In the new attribution service, the retailer sends the loyalty card ID to Experian, which matches it with the digital cross-device profile of a given individual and with the ads shown to the user on those devices. Experiam then returns a report to Catalina that uses an anonymized ID.

Catalina CMO Marta Cyhan told me the company deals only with anonymized IDs because “we’re not in the business of knowing who you are,” although Experian does have PII.

The data is updated daily to a self-service dashboard for brands (see below) and, since Experian tracks profiles, the attribution can also include the effect of ads on repeat purchases, new buyers of a product category and other consumer behaviors.

Difference from NCS. Catalina, which filed for bankruptcy protection last month, is also known as a partner in Nielsen Catalina Solutions (NCS), which employs data from the in-store coupons and loyalty cards. But, Cyhan said, Catalina’s new attribution measures individuals across multiple channels deterministically, since the actual people are known through the Experian matching, while NCS is focused on measuring single channels through probabilistic modeled data.

Additionally, she said, Catalina’s new solution is updated daily, includes buyer behavior changes and provides granularity down to the UPC level, while NCS provides post-campaign reports on overall sales lifts.

Why you should care. Catalina’s shopper data is used widely by marketers, and this first attribution service will help brands determine the impact of their paid media spend.

Additionally, Catalina is providing a very fine level of granularity, down to the individual product bar code, with a very high level of certainty. This approach could provide the kind of accurate, return-on-spending results that major consumer brands have clamored for.

The post Catalina adds first attribution tracking service appeared first on Marketing Land.

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