Analysis: Accenture now firmly stamping on adland’s toes
Forget the earlier denial and scepticism, it was always going to happen: this week Accenture Interactive moved its tanks a bit further along the lawn of agency holding groups and set up an online ad-buying unit.
The digital and marketing wing of the wider consultancy business, which last year began a string of acquisitions in the marketing services space, wants another slice of adland pie – and a very lucrative slice it is.
Claiming it is responding to “significant” client demand, Accenture is now helping clients do online media planning and buying.
Accenture Interactive boss, Brian Whipple, is using the transparency line to sell this venture, knowing full-well that it is the undoing of the agency model. He said the service is designed to help marketers achieve greater business outcomes, enable cost transparency, regain control and ownership of their data, and design audience-driven campaigns.
Media consultant and analyst Alex DeGroote says this all equates to more bad news for the agency holding groups because clients are increasingly ‘in-housing’ programmatic and digital spend and will now look to the likes of Accenture to implement cost effective and transparent marketing technology solutions.
“This competition will affect the profitability and market share of WPP et al,” he says. “Media buying has historically been the highest margin activity of any marketing discipline, though this has been unravelling.”
Accenture Digital launched in 2014, and globally has 30,000 employees. It has been acquisitive in the Marcoms sector already, and long acknowledged as a competitive threat to the likes of WPP, Omnicom, Publicis and Dentsu.[advert position=”left”]
“On the back of GDPR and ever-increasing use of data analytics, their entry into programmatic will be client-led,” DeGroote says.
“Accenture Consulting itself has a market value of around $100bn, which is more than all the holding groups combined. They will be able to recruit aggressively from those groups, and prioritise investment in high end IT architecture at a time when the holding companies are struggling to justify their traditional business models.”
DeGroote says he and his team see this as “Goliath eating all the little Davids.”
Still, programmatic isn’t easy (or fun, by all accounts) and Accenture might find internal disconnects. Consider the next 12 months a test run, for both curious clients and the consultancy.
Higher costs for clients?
Meanwhile, consultant and media commentator Bob Wootton tells Newsline: “The media channels are determinedly client-agnostic and they don’t care which porthole the money pours into. Any expectations of residual loyalty to incumbent agencies are therefore foolish.”
Wootton says a process-focused business like Accenture must be very well-placed to step in to the space, especially as its relationships are anchored with CEOs and CFOs, not marketing or procurement.
“It will be the same top brass who ‘buy’ this service,” he says.
However, given management consultancies’ fee expectations compared to agencies’ operating in a hyper-competitive market, the consultancy route will likely turn out to be “spectacularly” more expensive.
And this is where things get interesting. Will marketing and procurement call senior management on it?
“I’m extremely doubtful,” says Wootton. “We may have near-full employment but the current environment sees too many clinging on to their jobs. Challenging even line, let alone senior, management is not seen as a route to success.”
Wootton says everyone involved should be very careful indeed as to what they wish for. “Long-term, agencies could get the last laugh, but that’s if they can hang around long enough to enjoy it.”
Conflict of interest?
For the IPA, the body that represents UK agencies, the entire venture represents “a great concern” because Accenture is a media auditor – by providing programmatic buying services to advertisers, there is a “direct conflict of interests.”
“As well as compromising impartiality, no business can legitimately offer competing media services to a market where it has a media auditor’s access to confidential client and agency media data and financial information,” says Paul Bainsfair, director general, IPA.
“In an era where transparency is under the spotlight, this self-evident conflict of interest is unacceptable.”
The IPA said it is now in dialogue with advertiser body ISBA about the development, particularly as the two organisations are exploring a Media Auditor Code of Conduct.
In response, Scott Tieman, global lead of programmatic services, Accenture Interactive said: “Media audits are conducted by a dedicated practice within Accenture Operations – an entirely separate business from Accenture Interactive – and confidential data/non-disclosure protections, firewalls and policies are in place to ensure that information is not shared with any other part of our business.”