Accenture just bought an indie ad agency, as boardrooms get serious about creative marketing
- Accenture Interactive agreed this week to buy independent creative agency Droga5.
- Though ad agencies are wary of consultancies' interest in the ad business, experts say the deal is a vote of confidence in marketing services.
For years, the advertising industry has pondered the potential of big tech consultancies like Accenture and Deloitte to eat its lunch.
This week, one of those consultancies made clear its interest in taking on the creative industry.
Accenture Interactive, the consultancy's "experience agency," said Wednesday it has agreed to acquire Droga5, the independent creative agency behind work like IHOP's "International House of Burgers" stunt and this year's Super Bowl spot promoting "Game of Thrones" and Bud Light.
The deal could sound alarm bells for traditional agencies, which may worry about keeping pace when consultancies have historically had strong ties to the executive suites at major marketers. But some experts say the deal is actually good news for the advertising industry because it signals that companies are getting more serious about creativity in marketing.
As part of the deal, Droga5's 500 employees in New York and London will join Accenture, with Droga5 founder David Droga remaining in his role of creative chairman and Sarah Thompson remaining as global CEO. The parties did not disclose financial terms but said the deal represents Accenture Interactive's biggest acquisition since its founding in 2009.
Agencies shouldn't worry
While Droga5 isn't the first creative shop to be bought by a consultancy, this acquisition made waves in part because of the agency's creative prowess and its status as a sizable independent agency in a landscape where giant holding companies like WPP and Publicis dominate the market.
CEO Brian Whipple has said Accenture Interactive was formed 10 years ago because CMOs had become more responsible for business goals instead of solely brand goals. In the years since, the company has acquired digital design agency Fjord, London-based creative agency Karmarama and a slew of other companies — giving it chops in areas like programmatic ad buying, tech, data and experience design.
Agencies have frequently claimed that consultancies don't have the creative firepower or the flexibility to compete in advertising. "We don't see them very much in terms of who we pitch against, and when we do pitch against them we win because we're able to provide the integrated offering that they don't," Michael Roth, CEO and chairman of advertising holding company Interpublic, said last summer of consultancies.
Many may interpret the Droga5 acquisition as an omen for agencies, Forrester Research analyst Jay Pattisall said in a blog post.
But he said that's missing the point.
"Accenture Interactive's acquisition of Droga5 cements a renewed emphasis on creativity in marketing," he said, adding that chief marketing officers are wise to "take up the creative mantle and build differentiation and preference for their brands."
Instead of a death knell, the advertising industry should think of the deal as a sign that Accenture sees value in marketing services.
"It's a sign that the C-suite might be more receptive of marketing solutions," said Mike Duda, managing partner at a strategic creative agency and consumer investment firm called Bullish and a former executive of ad agency Deutsch. "Consulting is not good enough anymore — it's what you do with that advice."
Duda added that the agreement should be viewed as a positive for the agency business since it's an example of a sizable deal for a nondata firm.
"This is one of the most respected and prestigious agency brands, and Accenture saw that value and bought it," he said.
The deal could also mean marketers are about to see a lot more tattoos.
"This could be a trend where you see less blazers and wingtips in the boardroom and more sneakers and untucked shirts," he said.