Accenture's deal is a sign of bigger things to come
A view from Gideon Spanier

Accenture's deal is a sign of bigger things to come

It is only a matter of time before others consider whether media buying should be part of an "end-to-end marketing solution" for clients.

Accenture’s takeover of Karmarama has sent shockwaves through the industry because it shows that the consultancies plan to eat the lunch of the ad holding groups.

Management consultants have had a hotline to the chief executive, chief technology officer and chief information officer for years. Moving into marketing services gives them access to the ear and budget of the chief marketing officer and chief experience officer. 

Joy Bhattacharya, UK head of Accenture Interactive, wonders aloud if the six holding companies will still be the "big six" in a couple of years’ time. "I don’t know," he says – but the fact the question is being asked speaks volumes.

Accenture Interactive isn’t planning to get into mass media buying and would use a third party if a client asks for it. That should help to avoid any conflict since another part of Accenture carries out media auditing.

However, given the way creative and media are coming back together as part of a wider trend to offer brands a "joined-up" solution, it is only a matter of time before others consider whether media buying should be part of what Accenture calls an "end-to-end marketing solution" for clients.

Indeed, Ben Bilboul, chief executive of Karmarama, likens its expanded offer with Accenture to how Omnicom has set up a combined creative and media "agency of the future" for McDonald’s and WPP’s push for "horizontality" between disciplines. The difference is that Accenture’s 384,000 staff – double the size of WPP – are thinking far beyond marketing services.

"We’re seeing vast budgets in most industries going into digital transformation," according to Simon Nicholls of GP Bullhound, the investment bank that advised on the Karmarama sale, although he won’t comment directly on that deal. "By next year, the CMO will be spending more on technology than the CTO."

Doubts remain about the cultural fit between Karmarama and Accenture. Yet the consulting giant talks the right language about building a "culture of cultures" and respecting the independence of the agencies it has acquired. The experience of Fjord, which has kept its name and quadrupled in size since Accenture bought it in 2013, reassured Karmarama.

Bankers are talking up "an unprecedented wave of M&A" as the ad groups, consultants and IT giants battle to buy agencies. However, as Bhattacharya notes, there are few independents left to buy.

The next acquisition might have to be bigger for rivals to catch up with Accenture.

gideon.spanier@haymarket.com 
@gideonspanier