‘Accenture’s acquisition of Droga5 gives it an edge in consultative sales’

Early last week, Accenture announced that New York-based agency Droga5 would become a part of Accenture Interactive, which Accenture calls its experience agency

e4m by Tasmayee Laha Roy
Updated: Apr 8, 2019 8:45 AM
AccentureDroga

Accenture Interactive has sure accelerated its mission to bridge the gap between brand promise and customer experience through transformative experiences by acquiring creative agency Droga5. According to experts from both IT and advertising fields, the acquisition would give Accenture an edge in consultative sales.

Talking about the acquisition, Sanchit Vir Gogia, Chief Analyst, Founder and Chief Executive of IT Research firm Greyhound Research, says that digital acquisitions are the flavour of the season for IT services firms looking to diversify.

“The focus on design thinking is a significant move away from traditional outsourcing deals and models that focus only on infrastructure projects or application-led deals,” remarks Gogia.

Referring to research at Greyhound Research, Gogia says that 50 per cent of the IT budget will lie with a non-CIO (Chief Information Officer) person by 2020.

“So you’re (most likely) talking to a CMO (Chief Marketing Officer), or CHRO (Chief Human Resources Officer) or CFO (Chief Financial Officer) for business. If you have to speak to a CMO, you need to be able to speak experience and immersion, and not just IT,” he explains.

Early last week, Accenture announced that New York-based agency Droga5 would become a part of Accenture Interactive, which Accenture calls its experience agency.

In an official statement released by Accenture, Brian Whipple, Global CEO of Accenture Interactive, said, “We’re excited to work with David Droga and his team of brand strategists and creative minds to further our ambition to improve the full human experience with brands. As we celebrate the 10-year anniversary of Accenture Interactive, joining forces with Droga5 will be a game-changing milestone for us and the industry as we continue to assemble the right mix of capabilities for the modern-day marketer.”

While the acquisition will give Accenture Interactive a distinct marketplace position, Droga5 and other creative agencies that follow suit would also stand to gain from associations like these.

Harjot Singh Narang, President, Dentsu One Pvt Ltd, feels that for Accenture, this will be an acquisition of a strong right brain thinking prowess that they can apply to the problems of clients that they are addressing.

“If done right, it could be a key differentiator from their competition. Additionally, the first mover advantage will mean that their learning curve on this alignment would be higher than anyone else,” adds Narang.

“For the creative agency, it will open up a whole new world of problems to apply creative thinking to, along with higher exposure and grounding in a deep analytical base of thinking that business consultancy firms have traditionally built for themselves,” Narang says further.

“I think the essence lies in the difference in approach to problems that the two sides bring to the table. A creative agency is tuned to think outside the box and ensure that whatever it creates is beyond others and is still deeply connected to human insights that result in great results. Now imagine this approach being applied beyond brand and communication to other business/process/ efficiency/strategic problems. It could open up a whole new world and way of working for the consulting organisation,” he adds.

Looking at it from another side, George Kovoor, Group Creative Director at Ogilvy, says that consulting firms have never been a threat in a creative pitch, but with the Droga merger, that's going to change for sure.

“Accenture has been looking to take on the advertising industry for quite some time now. Droga joins a slew of design and tech powerhouses like Fjord, Monkey, Adaptly and Karmarama. For Droga this is a new lease of life. It opens up a whole new world of possibilities. Droga has done what a lot of advertising networks have been trying to do-- become a truly new age advertising agency,” he adds.

According to experts, Droga's substantial creative talent coupled with Accenture's already substantial bouquet of services will make this combination one to lookout for in the future.

But does the move have an impact on the Indian market? The impact on the Indian market will depend on the requirement of clients to apply a combination of logic and creativity to problem solutions.

According to Kovoor, in fact, Indian advertising agencies have been feeling the impact of the changing advertising marketplace for some years now. Clients are no longer looking for traditional advertising and branding solutions. They are looking for experiences that tap their consumers at multiple touch points of their customer journey. In that light, this merger is definitely showing the way our world is moving.

But is India ready for such acquisitions?

“The Indian market is way behind in terms of strategic acquisitions by large consulting firms. Majority of the large current M&A deals in the media and creative space are limited to US, UK and rest of Europe. Indian agencies need to up their game in order to be attractive targets or differentiate convincingly if they choose to remain independent,” says Saurabh Uboweja, Chief Executive Officer at Brands of Desire.

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