Accenture just scooped up Droga5 , AdAge and AdWeek’s "agency of the year.” It rounds out a digital experience design capability featuring others like Fjord that has easily become the envy of the industry.
With high profile accounts like HBO and popular ads like the Bud Knight Game of Thrones TV spot, there’s no questioning that Droga5 is bringing the best and the brightest to Accenture’s already significant marketing and advertising capabilities. While Accenture and its consultancy peers have been disruptive to the advertising industry, gobbling up design and creative agencies for digital design while bringing a technology and scale to support execution (see Exhibit 1).
Accenture has been the clear leader in these efforts, challenging traditional agencies like WPP, Publicis, McCann and Omnicom, where these traditional firms are simply unable to execute digital at the same scale. This is clearly good news for enterprises to access these expanded digital marketing and advertising capabilities, but are they ready to leverage them? And do the traditional advertising providers have a complete narrative that spans across all their capabilities - or will they continue to sell point solutions, frankly underselling themselves?
Exhibit 1: M&A activity - January 2018 to December 2018
*Others include Conduent, DXC, TCS, Luxsoft, ADP, CACI, HP, etc.
Source: HFS Research M&A Database as of December 2018
With Droga5, Accenture goes beyond disrupting the agency model
Accenture Interactive is creating a competitive juggernaut that really spans the breadth of digital customer experience. Where the system integrators (including consulting firms) and creative agencies were previously at opposite ends of the spectrum with lines blurring in the middle (Exhibit 2), Accenture has developed significant capabilities across the entire spectrum. The Droga5 move is mold-breaking in sense that it’s not regionally or niche focused like many of its other acquisitions, and with its global high profile is really the icing on the cake for driving home its model of creative digital services supported by technology and labor execution.
Exhibit 2: The Spectrum of marketing activities
Enterprises need to find a way to kill their silos to create the seamless customer experience.
David Droga, Droga5 founder and CEO, clearly gets the concept, putting it perfectly:
“CEOs, CMOs, and CIOs all need to be on the same page, because they all affect each other now. This isn’t a nice-to-have. I think it’s going to be crucial for any brand going forward. This is future-proofing.”
Long term, Accenture’s bet here is that buyer siloes will break down across the enterprise as companies align to the HFS OneOffice. Instead of buying in silos and fragments, companies today should be looking for transformational partners who can help them connect all the pieces of the CX journey. Accenture’s approach is one that can guide customers to agile and intelligent CX capabilities.
But, in order to take advantage of the capabilities, enterprises need to break down their silos and align to the customer. All too often, we see organizational siloes, competing priorities and cultural divides inhibiting the progress to true customer centricity. Our HFS’ holy grail of customer and experience centricity is the OneOffice paradigm, and a recent survey showed competing internal priorities as the biggest barrier to achieving that kind of seamless experience-oriented organization.
Exhibit 3: Competing priorities highlight buyer siloes that are an impediment to digital CX
What barriers are holding your organization back from achieving your OneOffice goals? (from low impact to high impact)? N=248
It’s no longer about how capabilities are sold. It’s about how enterprises buy
As we move towards the continued convergence of marketing, sales, customer service with IT and back-office (or the OneOffice), a hyperconnected future state (or HFS) will emerge. The CIO agenda gives way to increasingly influential business buyers. Customers are much less interested in a provider’s identity as a consultant, software provider, systems integrator or outsourcer, or even a creative agency instead expecting a broad representation of all of capabilities to help them innovate and meet their business needs (as shown in Exhibit 3). In particular as customer experience converges across legacy siloes under the digital umbrella, companies will need to care less about what a service provider’s “offer” is, versus what value they can provide. So, Accenture has managed to accumulate not only distinctive and quality creative talent and acumen, but also has the horsepower under the hood to execute that agencies and most other BPS firms don’t. This puts the company in a distinctive competitive position to be able to pivot to client needs in the hyper-connected future state.
Exhibit 4: Higher performing companies are seeking valuable partnerships beyond a company “offerings”
The Bottom Line: Enterprises must shed their legacy siloes and align priorities in order to take advantage of Accenture’s broad digital marketing and advertising capabilities
Accenture has been creating waves for the last few years of its 30-plus digital agency acquisition binge and is poised to be a partner which can change how customers partner for experience design and execution. The agencies as standalone assets are certainly valuable and differentiated – but the success of this for Accenture, as a whole, hinges upon the OneOffice and the way that buyers within the enterprise are aligned. Having both the design capabilities and the horsepower to execute intelligently on marketing activation and customer experience will make Accenture the undisputed powerhouse for holistic experience design and execution. Accenture is betting big on breaking down its customers’ silos to help them be completely toward differentiated customer experience aligned in the hyper-connected economy.