Analysis: Accenture's Droga5 deal

04 Apr 2019  |   
Analysis: Accenture's Droga5 deal

Accenture's acquisition of Droga5 is a landmark deal in the onward march of the consulting groups. Here, our experts explain its significance.

Alex DeGroote

Droga5 is a well regarded creative agency in New York and operates at scale. It has more than $200m revenue, and has won many industry awards. It would be well sought after by all of the agency groups - and would have picked Accenture in an auction.

This deal also suggests that there is no cultural issue with creative agencies and consulting groups meshing together.

Last week Accenture reported blow-out revenues for Q2 19, and the group continues to take market share from the traditional behemoths, WPP, Publicis, Omnicom et al.

With an emphasis on data driven marketing, personalisation and UX, Accenture appeals to both the CMO and CIO, and thus a greater share of client wallet.

The acquisition of Droga5 will be seen as symbolic by clients and industry watchers alike. And Accenture has a strong balance sheet, so more M&A to be expected.

Bob Wootton

The industry – and Accenture itself – have mostly been trying to play down the significance of consulting groups acquiring agencies.

However, Droga5 is one of the most lauded creative agencies and therefore a major trophy for and statement of intent from Accenture. For an undisclosed, but likely chunky, consideration.

And this on top of numerous agency acquisitions (like Karmarama, not a shabby outfit either) and heavyweight personnel hires (like OMG’s Nikki Mendonca).

Meanwhile Accenture Interactive continues to claim to be the world’s largest digital agency as it attracts clients and acquires businesses, some of whose leaders speak favourably about their new owners at events like ISBA’s Annual Conference.

This page makes interesting, if scary, reading and they’re not alone. Deloitte, PWC, IBM are at it too and GooBook aren’t far behind.

Whether the mantra of “it’s all about experience” sticks and whether they can create cultures to retain and develop talent and make the margins they expect (and - clue - which agencies can’t) remain to be seen.

But they can and do parlay relationships at levels the incumbents can usually only dream of. Places where procurement don’t walk. Again, ask the big online players...

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Thank you for your comment - a copy has now been sent to the Mediatel Newsline team who will review it shortly. Please note that the editor may edit your comment before publication.

markhawkes, director, Stragenda on 4 Apr 2019
“Many thanks Mediatel, Alex and Bob. That link is a real-eye-opener, Bob - very much appreciate you pointing us to it.”

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18 Apr 2019 

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