Advertising company cannot transfer consultation

Recently, many advertising companies that are in a recession want to switch to the information business. But according to Professor Christensen, the resources, processes, and values ​​of the two types of companies are different. So should they transform? Let's take a look at the author's point of view.

Recently, all industries have been in a recession, and advertising companies are not doing well either. Business is getting worse and worse. Many companies are saying they want to switch to consulting or develop consulting business, perhaps because they feel that consulting makes more money?

But consulting is not something you can just switch to. I have almost never seen a company successfully transform itself, unless you set up an independent, brand new consulting company and completely separate it from the original advertising company. Although the two may have some overlap in business, the ability requirements are completely different, and advertising companies simply do not have that ability.

According to Professor Christensen in "The Innovator's Dilemma", the capabilities of an organization are influenced by three factors: resources, processes, and values.

1. Difficulty in Migrating Resources

For advertising companies, resources mainly include their own brands, personnel and customers, as well as upstream and downstream suppliers.

The brand reputation you have built up over a long period of time is based on advertising creativity. The company's cases and works are all creative. You issued a notice saying that you will switch to consulting, but the staff is still the original team, even the office and workstations are the same. Can you do consulting business?

How can customers believe this? Customers' expectations and positioning of you are to do advertising creativity. They will think of you first when they have creative needs. They will also introduce you to their friends who have related businesses. But when it comes to strategic positioning and marketing consulting, they will not think of you at all.

The bigger the advertising company, the harder it is to transform because they cannot give up their mature profit model. Previously, the assessment of the company's team and the formulation of business models were all based on the advertising business. If they suddenly said they wanted to do consulting, the team would have to be completely replaced.

Advertising is a passive order-taking business, which is about pushing a certain sub-item to the extreme within the marketing proposition set by Party A. The highest level of people who have contact with Party A are mostly brand managers or business directors, and it is difficult to even contact the CMO, let alone the big boss level.

Consulting is a proactive proposal that requires market research, analysis of client business, judgment of major decisions, and liaison with client bosses or high-level business managers. A team that is used to studying briefs in the office and thinking of all kinds of ideas will never do these things.

2. Different processes

In fact, many resources of advertising companies and consulting companies can be interconnected. In terms of personnel, the strategies and designs from advertising companies can generally be transferred to consulting companies. Suppliers such as production and photography can be used interchangeably. In terms of clients, many clients with creative needs also have consulting needs. However, resources alone are not enough, because the process of converting agency capabilities into deliverables such as value-added products and services is determined by the agency's processes and values.

Whether it is advertising or consulting, the main productive force is people. In the process of converting manpower into services, the modes of docking, coordination, brainstorming, communication, and decision-making are processes.

The processes of advertising and consulting are very different, and the focus is also different.

The operating process that advertising companies have formed over a long period of time will focus their work on brainstorming specific ideas. If one round doesn't work, they will conduct a second round, or even ten or twenty rounds. The boss or senior executives will judge the work results of employees based on the innovation or novelty of the ideas.

The operation process of consulting companies is more focused on solving customers' business problems and strategic needs, and the focus of work is on research, site visits, and the delivery of overall solutions. When evaluating employees, bosses pay more attention to their ability to solve practical problems.

Any process is only the optimal solution for a certain business . Any organization has a mature process for creating value. Processes are inherently resistant to change. Once they change, they will affect employee work efficiency and the company's operations.

3. Values ​​are fatal

An organization's values ​​are the criteria it follows when determining decision priorities.

What is the highest standard for advertising companies to judge the quality of a business? Whether it can win an award at Cannes. Whether it can solve the client's business problems and bring growth to the client's business is secondary. Some companies even package a separate version of the case just to win an award, because the judging criteria for the street version and the award are often different.

This is necessary. Although it may seem a bit magical sometimes to maintain such values, every company must have clear and unified values ​​to form cohesion and competitiveness, and use award-winning standards to lead and make advertisers feel proud of the industry - this is a sacred industry, and business is too cliché.

Values ​​determine the allocation of resources and the formation of processes. In a creative-oriented advertising company, the creative department must be very ambitious, and the salaries of creative personnel of the same level are relatively the highest. The strategy department is responsible for laying a few pages of nonsense before the creativity, and the account department is responsible for business and docking. In some companies, the strategy is also handled by Akang in the account department, which is not important anyway.

Consulting companies don’t seem to be very interested in winning awards, and their cases are unlikely to win the favor of Cannes. Consulting companies focus more on strategy and direction, and creativity is secondary. Getting it right is important. They don’t demand too much for the idea innovation of marketing sub-items, and no one cares about nitpicking on details.

Advertising companies have always respected creativity, but now they are switching to consulting and suddenly have to provide strategies. The boss in the creative department doesn't agree. Isn't this outrageous?

If the advertising company really wants to switch to consulting, what to do? Please refer to Professor Christensen’s advice:

1. Acquire another company whose processes and values ​​closely match the new mission (throwing money at it);
2. Trying to change the processes and values ​​of the current institution (with zero success rate);
3. Create an independent agency within which to develop a new set of processes and values ​​for new problems (getting out of the inertia of an advertising agency).

Author: Chen Wuyong

Source: WeChat public account "Chen Wuyong (ID: wuyongzhiyong2022)"