Accenture Interactive launches consulting invasion of Ad Agency space

19 June 2018 Consulting.us

The tech mastery cultivated by consulting firms keen to offer clients first-rate digital transformation services is generating a range of corollary benefits. Among them is the capacity to make inroads into the advertising space, as evidenced by Accenture Interactive’s bold move into ad-buying.

The notion that consulting firms were angling for a hostile takeover of the advertising industry was seemingly put to bed when Accenture CEO Pierre Nanterme said the margins in media-buying were too low and the space too competitive to pique his interest.

But now that a vacuum has popped up, with plenty of creative wiggle room for companies capable of merging media-buying with technology, Accenture is leading an arms race among consultancies who see glaring vulnerabilities in the ad industry.

That consulting firms have been gobbling up digital advertising, marketing, and design agencies is old news. This was done to improve their offerings to clients’ marketing departments and help them move advertising in-house. While this put them in a direct confrontation with ad agencies, it wasn’t an effort to take over their core business.

This has changed with the latest head-turning move by Accenture Interactive. Led by Brian Whipple, an analytics expert who kickstarted his career as a consultant in 1987, the Interactive unit has launched its Programmatic Services practice. The practice will buy, plan, and manage ads on behalf of clients, leaving no space for agencies to coexist with the consulting giant.

Accenture Interactive launches consulting invasion of Ad Agency space

Programmatic advertising is an entirely different beast from traditional ad-buying online or on television and print. It is a way for advertisers to buy up digital ad space while leveraging automation-driven technology which uses real time data analysis to determine where, when, and how much to buy.

It puts control back in the hands of the advertiser by making online advertising less a roll of the dice and more a highly-technical process that incorporates personalisation and can adapt on the spot to maximize outreach.

Rather than placing ads on a particular medium – say on television during the Superbowl – in the hope that they reach the target audience, programmatic advertising unleashes ads across a variety of networks where they are guaranteed to locate their targets, much like a homing missile.

The crucial difference as far as the industry is concerned is that advertisers are no longer buying ads, or even ad strategies. Instead they are buying technology. And that is where global management consultancies with high-grade digital capabilities and deep pockets like Accenture come in.

Brian Whipple CEO Accenture Interactive

Accenture Interactive saw its revenue swell by 35% to $6.5 billion last year. It boasts a head count of 25,000 which is set to expand with the new Programmatic Services division. At least 14 agencies have been snapped up by Interactive in the past five years and, in late 2017, it was selected by the Radisson Hotel Group to manage its digital ad-buying and develop an in-house IT platform.

“It cost us way more money to give control of our customer journey over to third parties than doing it ourselves, and that’s why we turned to Accenture Interactive to take back that control,” said Remy Merckx, Digital VP at Radisson. “There’s not a single marketing dollar that I’m going to give Accenture that they will not tell me in advance what it will deliver using a predictive model.”

Accenture Interactive also offers digital advertising clients a transparent fee, rather than commission-based payment structure. This comes on top of the guaranteed hits promised by automation technology, and the insights of Accenture’s Big Data scientists who can help clients interpret advertising results, and consultants with cross-functional expertise who can apply those insights to matters of strategy, process, and organization.

Nor is Accenture Interactive alone in spotting the vast opportunities in this new age of advertising. Deloitte Digital bought Heat in 2016 (the creative agency, not the magazine) and is now helping electronics giant LG and pizza brand Papa Murphy’s with their marketing strategies. IBM has now established a huge 36-studio agency named IBM iX, while PwC Digital Services is also getting in on the action.

In fact, these four advertising arms of consulting and IT firms are all among the top ten largest agency companies by revenue. Now the Accenture has crossed the Rubicon by engaging directly in media-buys, the stage is set for radical change in the interaction between consultancies and ad agencies.

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Accenture Interactive acquires ad agency Droga5

08 April 2019 Consulting.us

In its latest push into the creative sector, global consultancy Accenture’s digital arm, Accenture Interactive, has acquired international ad agency Droga5. Droga5 brings with it a bushel of titanic clients such as HBO, Under Armour, Amazon, The New York Times, and Covergirl.

Per the deal, all 500 of the Droga5’s employees, who are spread across offices in London and New York, will become part of Accenture Interactive’s $8.5 billion organization, which specializes in customer experience and marketing services. Droga5’s leadership will remain in place. “[Founder Brian] Droga will remain in his role as creative chairman of Droga5, Sarah Thompson will continue as global CEO and Bill Scott will remain as UK CEO, working alongside the rest of the agency’s management team,” according to a press release regarding the acquisition.

It was reported in 2013 that talent agency WME had acquired a 49% stake in Droga5 in a deal valued at $115 million. There is no news of WME’s plans, but rumors swirl of the agency’s exit, most likely through IPO.

Brian Whipple and David Droga“We have bits and pieces of brand creative here in North America, but we didn’t have the best of the best” Brian Whipple, Accenture Interactive CEO, said in an interview with tech publication Fast Company. “David and his team are the best, hands down, and now we’ll be adding that, which will just make our ability to make best-in-class experiences for clients – and communicate them to consumers – an incredible reality.”

The move is undoubtedly as bold as it is aggressive, and comes hot on the heels of two rather major acquisitions, each part of an M&A strategy that has seen Accenture Interactive, the world’s largest digital marketing agency by revenue, close more than 20 deals globally in the past few years. In mid-March, for example, the firm purchased Dutch marketing agency Storm Digital. Then came news of its acquisition of Hjaltelin Stahl, a leading Danish creative agency known for creating unique and consistent cross-media experiences.

Accenture Interactive and Droga5 were each named one of Fast Company’s 2019 Most Innovative Companies in Advertising, the release states. “Accenture was recognized for ‘leading the merger of strategic consulting, ad-tech, and creative work’ while Droga5 was lauded for its offbeat and transformative ad campaigns.” The firm recently made headlines (and social media waves) for its “Game of Thrones”-style Bud Light commercial, which aired during the Super Bowl. 

The deal was announced Wednesday, but terms are not yet disclosed. The acquisition has been ongoing for a year and is expected to close by the end of May, according to The New York Times. Both Droga and Whipple said maintaining Droga5’s culture was of utmost importance, and said there would not be any major staffing or office changes because of the deal.

“Since day one, we have worked hard to push our industry forward and, hopefully, make a positive impact for all,” Droga said in the release. “The world of advertising is changing, and we are excited for this incredible opportunity with a company that will add more dimension to our best ideas and push us beyond our existing ambitions. The proposition we can bring to market with Accenture Interactive will transform the industry.”

Further expanding the firm’s front-end innovation capabilities, and its ability to help clients reinvent themselves with experimentation-led approaches, Accenture in early March revealed it acquired UK-based innovation firm ?What If!