Somewhat overshadowed by GDPR's go-live date was an announcement by Accenture Interactive, that it would officially begin to help brands plan, manage and execute their programmatic media buys across search, social, video, and display (but not TV, radio, or print) through its new offering - Accenture Interactive Programmatic Services. This offering compliments their existing services, including assisting brands in-house with their programmatic media buying. As this is a massive, well-capitalized company making a forceful entrance into the programmatic ecosystem, all programmatic participants should take note.
Accenture has been developing various digital and agency capabilities for years. It founded Accenture Interactive in 2009. Ever since, the division has been aggressive acquiring capabilities, geographic footprints, and, implicitly, customers. The division has traditionally focused on CRM, digital experiences and business transformation. It has made 18-19 acquisitions since 2013, including agencies focusing on creative, design, and innovation generally. Accenture Interactive spent over $1B in 2017 buying agencies, more than all traditional agency holding companies. Accenture Interactive now employs roughly 25,000 people and is considered the largest digital network (it's unclear what the precise definition of that term is, though). Unlike traditional agency holding companies, Accenture Interactive operates as a single P&L, meaning it will frequently phase out the brands of the agencies it acquires and operate as a single unit. Prior to announcing their media buying capabilities, helping brands build in-house capabilities and trading desks was a growing piece of Accenture Interactive's business - including helping brands understand the ecosystem and select the best participants for their business, develop best-practices around their data, and actually implement in-house trading. Thus, Accenture Interactive is effectively mounting two different threats to the agency model. Other consulting companies, like Deloitte Digital and PwC Digital Services have some of the same offerings as Accenture, but have not been quite as aggressive.
At DMS East (Luma's conference) this year, prior to the announcement by Accenture that it would be buying media for its clients, but after he left as CEO from WPP, Martin Sorrell was asking about consulting companies and their competition with agency holding companies. His answer was noteworthy in that it was decidedly incorrect - that consulting companies were primarily interested in large, transformational deals with brands but not the smaller work that might come with regular media buying. Dentsu Aegis Network's CEO, Jerry Buhlmann, was similarly incorrect on a recent earnings call. Agencies, meanwhile, have been moving more towards the larger, consulting type projects that the consulting firms have handling.
It is increasingly a view that the current structure of agencies may need to change as the digital landscape evolves in the future. Martin Sorrell himself said as much on his way out of WPP, while forming S5 (his new venture) - though maybe that's not without bias. It is indeed somewhat unexpected that consulting firms are entering a field rife with extra scrutiny around margins. That said, this new Accenture practice was ostensibly created in part because of ongoing concerns that brands continue to have around non-transparent agency practices, stemming back to the 2016 ANA report (discussed here). Notably, Accenture is moving to charge on a FTE (headcount) basis, rather than percent of media. It also indicated that it would not take principal positions in media. Through both positions, this would largely preclude the potential for the scenarios that arose in the ANA report (but, of course, also directly challenge agency margins). Part of the roll-out of this offering included an oblique reference to this, referencing how their service would allow brands to "take control and ownership of their data and technology, providing them with greater transparency and enabling them to achieve greater business outcomes and regain trust."
The response by agency holding companies to this new entrant is fairly aggressive. The 4A's (the American Association of Advertising Agencies) released a statement that "[w]e find this unacceptable and are concerned about whether Accenture will be transparent in ensuring that the massive amount of information it has collected from agencies—both as auditor as well as via the agency review process—is not leveraged for the benefit of its new practice." Their British counterpart, the IPA (Institute of Practitioners in Advertising), issued a similar statement, noting that "[i]n an era where transparency is under the spotlight, this self-evident conflict of interest is unacceptable." Further, the 4A's "urge[d] all agencies to take this moment to think critically about whether they will continue participating in any review that Accenture is leading and determine if they will allow Accenture to continue auditing their media." This is, of course, notwithstanding the traditional and ongoing assurances of separation that Accenture would seek to provide. Effectively, the agencies are threatening to undermine another part of Accenture's business, should it enter into their own. MediaCom's CEO echoed this position, stating that "I’m sure Accenture will promise all sorts of Chinese walls between the two bits of its business but as someone who now competes with one part of the company, I would be extremely reluctant to provide MediaCom’s proprietary data to another part."
This is of meaningful relevance to companies like TripleLift because, in large part, our business is to help marketers achieve their goals. If they choose to use a new class of service providers, then we will need to partner with these companies. Further, consulting companies like Accenture may work with the ad tech ecosystem through different types of partnerships, so the industry as a whole will discover the best way to work together - and it may look very different from how it works with traditional media agencies.