Consulting Firms Will ‘Decimate’ Ad Agencies: Confessions of a Marketing Consultant
As management consultancies move further into the digital advertising arena, they will make a play for media buying budgets even if they won’t openly admit it. That is the view of a marketing consultant, who spoke as part of Digiday’s Confessions series, in which we exchange anonymity for candor. This person believes consulting firms are quietly building their own media buying services which could “decimate agencies.”
Agencies have guarded their budgets against other threats before. What makes consulting firms different?
Agencies are talking to clients about low CPMs when it comes to how to buy media. That happens despite everyone accepting that’s a bad way to buy online media. Consulting firms are telling clients, “Forget about CPM; let’s talk about the cost per sale,” and asking, “How much are you willing to pay for that?” The reason that the advertiser is in digital is because they’ve been convinced by their media agency that they’ll save money, and it will be cheaper to reach their audience using digital. You turn that around and make that performance-based media, like the consulting firms want to do, and suddenly you can make great money on it because the client is willing to pay $1 per view and $100 per acquisition, for example.