Home / Insights / Entry of Consulting Firms into Marketing Agency Business

insights-espresso-icon article

Entry of Consulting Firms into Marketing Agency Business

Espresso-live Speakers
by Keerthana Dulipkumar , Senior Research Analyst, Marketing Agencies
1 January 2017


Traditional marketing agency business has experienced major disruption over the past couple of years, as consulting and technology firms are starting to provide digital marketing and advertising services to their clients. This is done either by acquiring creative and digital shops or by starting an advertising arm. Such firms include EY, KPMG, Deloitte, Boston Consulting Group, Accenture, McKinsey, PwC, and IBM. Among these, Accenture, Deloitte, and McKinsey alone spent more than $1.5 billion on agency acquisitions by the end of 2018.

Multidisciplinary consulting companies continue to seek areas in which they can expand their operations. Since 2017, this saw aggressive expansion campaigns by several firms. Such firms boast huge headcounts, in some cases possessing staff twice the size of top firms in the advertising world. This, theoretically, gives consulting companies an upper hand in winning key business away from long-term market incumbents, as they have the potential of completing tasks in-house, across a variety of skill sets and sectors at a rapid pace, providing a quick holistic service. This article answers the following questions:

  • Why did consulting companies move into the marketing services space?
  • What are the key problems faced by marketing agencies that are being solved by consulting companies?
  • How aggressively are the consulting companies expanding?

Management Consulting Acquisitions-The Background

It all started when Accenture Interactive acquired the design consultancy, Fjord, in 2013, before investing in digital agencies around the world, like IMJ Corporation, AD.Dialeto, Pacific Link, and Chaotic Moon. It then bought Kamarama, one of the UK’s largest independent agencies, which counts the likes of BBC, Just Eat, and Unilever as clients. The acquisitions opened the floodgates for other consulting and tech firms to follow Accenture’s footsteps. For example, Deloitte bought out full-service advertising agency, Heat; IBM acquired digital agencies Aperto, Resource/Ammirati, and ecx.io to build up its IBM Interactive Experience studio offerings; and Capgemini bought the design agency Fahrenheit 212. The likes of EY, McKinsey, KPMG, and PwC have also either built a digital marketing arm or added an agency division to their core product offering.

In Asia Pacific alone, McKinsey bought Malaysia-based VLT Labs, a digital and design studio, while Accenture opened a digital hub in Singapore with a 200 headcount that provides digital marketing services it acquired from the likes of Fjord. It also bought an Australian creative agency, The Monkeys, and stated that the acquisition would lead to further growth in Asia Pacific.

Why did Consulting Companies Move into the Marketing Agencies’ Space?

Consulting companies like Accenture, Deloitte, IBM, or PwC, have been moving into the marketing agency space by acquiring boutique agencies and design studios. However, most of the acquisitions are usually of small boutique shops, which are not particularly known as creative powerhouses.

Linkedin Twitter Facebook
Leave a comment

Please enter a valid name

Post your comment

Please select captcha


Get more stories like this

Subscirbe for more news,updates and insights from Beroe

Get Ahead with AI-Enabled Market Insights Schedule a Demo Now

Schedule a Demo Now