“Consulting in marketing: Accenture, others playing role in firms’ processes” by Matthew Creamer, Crain’s Chicago Business

Published June 12, 2006

Accenture Ltd. IBM Corp. McKinsey & Co. These consulting giants are casting a lengthening shadow on Madison Avenue. The day advertising execs have long feared — when management consultancies’ bean-counting, process-wielding barbarians will storm the marketing world’s gates — may well be nigh, as each of these titans is finding its own way to make money in the ad business.

IBM is the latest to get into the fray. It is advising New York-based fragrance maker Coty Inc. on what essentially amounts to a $65-million-plus ad review, as part of a wide-ranging procurement contract Coty inked last year with the consultancy.

A Coty spokeswoman is quick, however, to deny that IBM would actually select the ad agency. “I’m in the process of hiring a new communications agency and will have to run it by IBM, who has a process in place from a procurement standpoint,” she said, but added: “The marketing department is much better suited to making a judgment call on who we select as an agency.”

Meanwhile, McKinsey is said to be nudging its way into playing a role in Wal-Mart Stores Inc.’s advertising and media review and, according to execs familiar with the situation, has already been advising the Arkansas retailer on shapes its agency roster could take.

MAKING A SPLASH

These are the latest examples, but it’s Chicago’s Accenture that has probably made the biggest splash so far in the marketing seas. Following its purchase last year of Media Audits, its marketing-sciences division now audits about 15% of the U.S. TV market, including the budgets of major marketers such as Ford Motor Co. in Detroit and Wal-Mart.

The division’s CEO, Jeffrey Merrihue, says Accenture’s analysis is serving as “the foundation” for the media portion of Wal-Mart’s ongoing review.

The new players are here to stay. After all, they’re backed by increased vigilance over spending in all business functions, including marketing.

“They’ve always had marketing strategies that addressed organizational issues,” says Arthur Anderson, co-founder of Morgan Anderson Consulting. “Now they’re starting to nibble around the area of marketing communications. What’s truly surprising is they haven’t gotten in the space sooner.”

The most nightmarish of ad agencies’ doom-and-gloom scenarios — the one in which, say, a McKinsey starts to direct individual marketing programs — seems far off. Traditional management consultants appear more interested in managing marketing expenses, understanding return-on-investment and keeping costs down than in shaping strategy.

Accenture’s Mr. Merrihue says the firm has no plans “in the medium or long term” to expand its marketing-related offerings, now limited to market-mix modeling and media auditing.

IBM declines to comment on its client work, and a McKinsey rep didn’t return calls.


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