Agencies beef up strategic services

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Responding to clients' needs for more strategic services, ad agencies are expanding their consulting practices, hiring more strategic experts and launching new strategic service organizations.

The change is driven largely by clients that are spending marketing dollars more cautiously and facing more intense competition, agency executives say.

"In a post-recession client environment, all marketing activities are obvious balance-sheet issues," said Courtney Buechert, managing director of McCann Erickson San Francisco. "The request to provide actual business results with direct and visible effects of marketing activity is the No. 1 guiding light in many client organizations."

MCCann shifts focus

In response to this, McCann has shifted its focus from advertising into more strategic consulting services. It has established a marketing council that brings in leaders from all of McCann's core businesses, including relationship marketing, advertising, online, media buying and brand strategy, to solve client problems.

Brian Powley, managing director of McCann's MRM Partners, the relationship marketing arm of the agency, said he recently received a call from a potential client asking if MRM would come in and do a capabilities presentation, which is typically the first step in a review.

"I respectfully said, `No, we don't do capabilities presentations,' " Powley said. Instead, he asked the prospect the following questions: What are you trying to do? Who are you facing with competitive pressure? How is your sector functioning? What are your current challenges?

"I told her that we would like to do some probing around those areas, and then we'd come back as a collective team and bring in the right resources and skills. That is our capability," Powley said. MRM is now in negotiations with the prospect, which Powley declined to name.

This strategic approach has resulted in some big wins for McCann. Last year, Microsoft consolidated all its relationship marketing with MRM and Wunderman. And travel site, which initially hired McCann for its media buying, recently awarded the agency its creative and relationship marketing business.

"Our job is to help clients move markets to solve problems," Buechert said. "If we can get hired in any capability to help them solve that problem, we have all won."

Other agencies are adding new service departments to meet client needs.

Butler, Shine, Stern & Partners, which acquired SF Interactive in 2003 to beef up its interactive services, has recently expanded its traditional direct marketing capabilities and formed a strategic consulting group.

"Strategic development, consulting and research are key to new business efforts," said Greg Stern, CEO of Butler, Shine. "We have brought in clients that may already have had advertising agency relationships and were looking for strategy, brand positioning or trade research."

For example, about four years ago Butler, Shine did some advertising work for Nuance, a software company that develops speech recognition systems. The agency lost the account during the downturn, then won back some strategic consulting work, which led to online media work and then traditional media work.

"Through strategic services, we are creating additional doors through which clients may enter," Stern said.

OgilvyOne restructures

OgilvyOne Consulting, the consulting practice of OgilvyOne North America, in September restructured its organization, bringing analytics, marketing technology, teleservices and relationship marketing into the group. Previously, those services had operated separately within OgilvyOne.

"The benefit is leveraging the lessons learned, particularly within b-to-b," said Michelle Bottomley, general manager of OgilvyOne Consulting, North America.

OgilvyOne Consulting also created a "b-to-b community of practice," which is a council of marketing executives from the agency's key b-to-b accounts, such as IBM Corp., SAP, Cisco Systems, American Express and DHL.

The council meets a few times each quarter to talk about best practices in CRM, lead generation, analytics and database marketing.

"What has emerged is not just defining best practices but starting to combine thinking and capabilities in new ways," Bottomley said.

For example, she said, every b-to-b client is trying to figure out its partner marketing strategy, so the consulting group brought in experts in that field to work with the communications and analytics teams to come up with best practices.

Doremus is another agency that has made a mark for itself in strategic services, with a heavy emphasis on research targeting the C-suite.

"The marketplace has changed dramatically," said Carl Anderson, president-CEO of Doremus, pointing to changes in the regulatory and competitive environments, M&A activity and corporate management.

"All of that lends itself to a corporation reassessing what their position is in the marketplace and how they go to market and compete. From our research, we have to find ways to deliver that new platform to their stakeholders in compelling and creative ways."

Rick Segal, chairman-CEO of HSR Business to Business, said strategic consulting is the fastest-growing area for the agency, expanding by more than 300% in the past four years, with an average annual growth rate of 156%.

Its assignments in this area include brand consulting for Hayworth, a furniture manufacturer, and a brand architecture and change management assignment for Kennametal, a tooling manufacturer.

"We're finding ourselves competing with management consulting firms and big brand consultancies," Segal said. "What is differentiating us is our deep insight in business marketing." 

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