The CMO of HP Inc is calling time on the traditional ad agency model: 'The disruption is real'
- Consulting firms like Accenture, Deloitte, and IBM are out in force at Cannes.
- These companies are offering brands capabilities that traditional ad agencies lack, said HP marketing chief Antonio Lucio.
- Lucio said that when it comes to getting great ads produced, "it is so friggin' easy to get it from anywhere."
There has been much consternation in the ad business about the threat of consulting firms like Accenture, Deloitte, and IBM encroaching on agencies. And these companies are hardly being shy about their ambitions, as each has a noticeable presence on the French Riviera at the Cannes advertising festival.
The consulting threat is significant, according to Antonio Lucio, global chief marketing & communications officer at HP Inc. And traditional ad agencies should be worried.
"The disruption is real," he told Business Insider.
Over a lunch at the Martinez Hotel in Cannes, Lucio said as a marketer he now has five priorities when it comes to choosing partners. They need to bring data expertise to the table, and they need strong analytical capabilities. They also need to be able to produce meaningful content.
In addition, partners need to legitimate programmatic ad buying capabilities. And they need to be able to track how advertising impacts business (i.e. 'attribution.')
For consulting firms, four out of the five skills "are right in their wheelhouse," he said.
Of course, consulting firms have been making inroads into the ad industry for several years. They bring a reputation for having a results-driven business approach, technological expertise and often direct connections with their clients' CEOs.
Meanwhile, ad agencies are seen as increasingly vulnerable as some marketers move programmatic ad buying and even creative in-house, or turning to publishers like BuzzFeed to produce content on their behalf.
If traditional agencies can hold onto anything, it's creative - i.e. the making of ads, said Lucio. That means increasingly, marketers won't need full service agencies that handle every aspects of their ad campaign executions. He sees brands working with consultants or doing a lot more of this work themselves.
And when it comes to getting ads made, brands can increasingly shop around without making a big agency commitment. "It is so friggin' easy to get it from anywhere," he said. "This reality will fundamentally disrupt the agency of record as we know it."
Anatoly Roytman is one of those disruptors. He serves as managing director of Accenture Interactive's Europe, Africa and Latin America operations. His team was comprised of 10 people just eight years ago. Last year Accenture Interactive pulled in $6.5 billion. It has acquired 22 companies over that time.
"It was actually our clients who led us [to advertising]," he added. "We were fast followers."
He said traditional ad companies are suffering because they for too long focused solely on making ads, and less about how products actually work in the real world.
Consulting firms are focused on managing customers' experiences, he says."This is what makes or breaks a brand right now," he told Business Insider. "It's not enough to attract people, you need to retain them. And you need to provide them services."
Roytman argued that the way traditional ad agencies are structured makes it difficult for them to connect creative work with tech and data. That structure leads to turf wars, he said.
"The agencies are led by big egos," he said. "We need teamwork. This is the biggest difference between us and those guys," he said. "Ego is not bad. But when ego is more important than outcome, those people are not good for us."