As holding companies slump, Accenture Interactive grows.
The digital experience agency, a subsidiary of the consulting firm Accenture, grew 35% in 2017 to hit $6.5 billion in revenue, making it the biggest digital agency in the world. It’s acquired 20 digital and design agencies since its launch in 2009 to build up its offering.
As it’s grown, AI has snagged multimillion-dollar business transformation projects from blue-chip marketers like Marriott, Radisson and Whole Foods. But Accenture Interactive, which operates under a single global P&L, isn’t in the same business as agency holding companies, said CEO Brian Whipple, a former exec at IPG and Omnicom.
“We’re not banking on advertising and media for their own sake,” he said. “Clients are focusing on their overall experience. Advertising and media would be a part of that, as would AR/VR, campaign management and a lot of other things. The days of traditional ad and media budgets are something of the past for many clients.”
Holding companies with consulting and business transformation offerings may disagree that they’re in a different business than AI, which works closely with Fortune 500 CMOs on all aspects of marketing, including programmatic and customer experience design.
“[Holding companies] are changing, but the pace of change is woefully slow,” Whipple said. “And it’s not because of the intent. It’s because of the structure and the culture.”
Built on the back of Accenture, AI has the ear of C-suite execs in large organizations who are “used to paying Accenture hundreds of millions of dollars in renewable annual contracts,” he said. That makes it easy for AI to ink multiyear retainers with clients, unlike the short project work for which agencies are constantly pitching.
“Our best clients are the big Accenture clients where we have that trusted relationship,” Whipple said.
He spoke with AdExchanger.
AdExchanger: You guys are gobbling up agencies. How are you not a holding company?
BRIAN WHIPPLE: We’re not a founder’s culture. It’s not our media subsidiary versus creative versus digital. Management teams are not incented to grow their own agencies. They’re incented to grow AI overall.
Holding companies generally do not have clients. Agencies have clients.
They’re trying to change that.
There’s been a lot of talk about that. I was at Interpublic when Bank of America put out this giant pitch for one agency. Dell did that. They’ve been trying to do this for years.
But if you look under the sheet, [holding companies] contribute people to these groups as a mandate from the top. I used to receive this mandate at Hill Holliday. But you’re still rewarded on the performance of your agency.
What do you do that’s different from a digital agency? Walk me through a client engagement.
We’re redefining your experience through technology, process and marketing. All of the data, communication and campaign management around that is a huge business for us.
For example, we’re personalizing the vacation experience. With Carnival Cruises, [we’ve created] an intelligent wristband you can wear to sign up for activities and meals and [navigate] the ship. It provides data for you to customize and go after that same consumer again.
Where does media buying fit into that?
We are investing heavily in programmatic and rendering experiences digitally. We’re big partners with all the major platforms — Google, DoubleClick, Facebook, Amazon. We have many skilled resources who do that.
Typically, though, our preferred model is to in-source at clients so they can own and benefit from their data, instead of an ad tech platform gaining that and potentially reselling it.
Are you displacing agencies? If so, what kind – creative, digital or media?
If a client is putting their creative or traditional business up for review, it’s unlikely that we would bid on that. If a client is reinventing the dining experience and shifting half of a $30 million ad budget to Accenture Interactive to do that, that does probably displace agencies.
How do holding companies need to evolve to compete?
Instead of altering, they have to ignite and blow up the founder’s culture. That’s going to take a lot of time. You can’t change your tagline. You have to remove the disincentives.
And they have to massively invest in technology. For the market that we are in, they are overweighting creativity and awards. Creativity is immensely important, as is technology, as is innovation and design.
Agencies say you can’t execute or compete on creative work. How do you respond to that?
Look at their growth rate and look at ours. There’s pretty strong competition right there. We have some of the best creative talent in the world knocking on our door every single day from all of the places that are saying that.
When they say consulting firm, they should define what that is. I’m not sure that we are a consulting firm.
Accenture is not a consulting firm?
Accenture has consulting services, but AI has a very distinct culture inside Accenture.
What’s your approach to culture and talent? You have so many small creative companies.
It’s about rallying around our vision and regular communication. We have to come up with a compelling offer and career path. Focusing on innovative experiences for global clients is doing that. But we can’t just take groups of art directors and copywriters and bolt them into Accenture Interactive. We have to cherry-pick talent that’s aligned with our vision.
And that’s not everyone. If you want to be all about just the creative awards, I don’t know if I have a home for you here.
It’s hard to get consultants to weigh in specifically on tactical aspects of marketing and media. Are you too removed from the execution?
I have not heard that criticism before. We are amongst the top partners on Salesforce, Adobe, SAP Hybris and Demandware. We have many skilled architects.
Are we appropriately deep in everything? Of course not. That’s why we’re hiring. Are our AR/VR skills better than they five years ago? Yes. Are they exactly where we need to be? No.
We’re still growing. We’re investing in anything that helps us create the best experiences. And we have the capital to do that. At our scale, you should expect us to know what we’re doing, and we should hold ourselves accountable to that.
This interview has been condensed.
