What is the difference between an advertising agency and a brand consultancy?

We define the two like this:

Advertising Agencies traditionally focus on the execution of creative strategies. That is, they will determine the best marketing vehicle to reach your target audience and will use compelling creative to make a connection and entice a reaction. The best ones are strategic in nature and see tactics as a second step.

A Brand Consultancy traditionally lives by this philosophy: Instead of trying to communicate a brands' features and benefits, they recommend studying the minds of the target audience first and then try to "position" the brand in the mind, taking advantage of the strengths and weaknesses of the brand and competing brands. This process ensures that your brand has selected the most powerful benefits to own and that it has developed the proof points and reasons to believe for those benefits. Brand consultancies also aid companies in any strategy-related brand decisions from brand equity measurement and management to brand extension.

Advertising Agencies and Brand Consultancies both strive to create brand insistence - creating a 'category of one' brand with no substitutes.

From time to time each will work together for the good of the client.