Consulting giant Accenture’s acquisition of creative agency Karmarama will open up new opportunities for brands looking for a one-stop shop for all their marketing needs.
The deal, announced yesterday (29 November), will see Karmarama join Accenture Interactive, part of Accenture Digital. Karmarama is the third largest independent agency in the UK, with clients including Unilever, Just Eat and the BBC. Details of the deal were not disclosed.
Speaking about the acquisition, Brian Whipple, senior managing director of Accenture Interactive, says: “Our immediate mission is to seek and destroy and dominate the market. We want the Karmarama DNA injected into our DNA.”
On the surface the move will help Accenture stand out from rivals such as Deloitte but Whipple says it is also part of a shift to prioritise technology, commerce, content management and advertising as one rather than focusing on a specific segment. The aim, the company says, is to create and deliver integrated customer experiences to brands in the UK and beyond.
Opportunities for marketers
The big consultancies are increasingly moving into the marketing space, most notably in digital. Three of the top five digital agencies – IBM iX, Accenture Interactive and Deloitte Digital – are subsidiaries of the big consulting firms according to Econsultancy’s top 100 digital agencies report.
Accenture also opened a global strategic consultancy firm in New York back in June in a bid to develop advertising and marketing creative for its clients, while there have been other acquisitions of more creative agencies – notably McKinsey buying design firm Lunar and Deloitte purchasing San Francisco-based agency Heat. The Karmarama deal is, however, the first of this nature in the UK.
Instead of fearing the top consultants, marketers and their agencies should join the movement and bring marketing right back into the C-suite.
Thomas Barta, former McKinsey partner
ISBA’s media chief, Mark Finney says he believes this creates new opportunities for clients. He explains: “Their clients will potentially have the choice of hiring management consultancies for the whole journey and may not have to rely on choosing other providers.”
And Oystercatchers’ Richard Robinson agrees: “This is a continuation of the ongoing alignment of brand owners looking for ways to make their third-party networks more efficient. Deloitte set the pace earlier this year with its purchase of Heat, creating a new market category we call ‘creative digital consulting’.”
But former McKinsey partner Thomas Barta believes it is a sign that marketing is moving closer to the c-suite. “The brand is ultimately the CEO’s job. In too many companies, however, marketing is a step too far removed from the C-suite. The recent mergers show: there’s a strong CEO push to establish world class end-to-end marketing. Instead of fearing the top consultants, marketers and their agencies should join the movement and bring marketing right back into the C-suite.”
Why Accenture bought Karmarama
Selling to a consultancy might seem like a strange move for a creative agency to want to make. Yet past mergers show that consultancies tend to leave the agencies they buy to work autonomously, unlike if they are bought by one of the big ad holding companies such as WPP which tend to want to stamp their mark on any agencies they buy.
It also opens a whole class of clients for Karmarama, and gives them more international clout.
For Accenture the benefits are just as clear. While it is already responsible for the behind-the-scenes digital experience at many brands, it does not have as much customer facing expertise. Karmarama should bring that.
Barta explains: “McKinsey and Boston Consulting Group aren’t actually doing much strategy work anymore. I’d say 60% or more of their work can be of operational nature yet for most companies the biggest value creation lever is revenue as that’s the space where most strategy consultancies have struggled to get a foothold. With marketing becoming more measurable, that’s changing.
“To seriously help clients drive revenue end to end, venturing into the creative space is only logical. [This] won’t be the end of it.”
Econsultancy’s senior research analyst Donna-Marie Bohan agrees, saying that with creative agencies focused on consumers and consultancies on clients, the move is about an industry where both mentalities are converging.
“Clients now expect to be guided through transformations due to the vast amount of tech associated with marketing and the need to be agile. In addition, they want better coordination between their marketing activities and business performance. And so agencies are having to take a consultative approach to meet these changing client expectations,” she explains.
“Part of the attraction in joining a traditional consultancy lies in the opportunity of becoming the ultimate full-service agency that can support creative execution, marketing transformation, technology management and strategic consulting.”
Can consultancy and creative work together?
But is bringing together an advertising agency and a management consultancy really a good idea? Robinson has some doubts.
“The conundrum is of course – will management consultancies value the free thinking and the perceived lack of structure that allow agencies to deliver brilliant customer insights? Creative agencies are hard-wired very differently to consultancies and need to be liberated to perform at their best.”
Barta, meanwhile, insists that while agency and consultancy mergers seem like a good idea, the deal is still a “road into the unknown”. While Accenture and Karmarama won’t be the last merger, he raises concerns over whether consultancy and creatives can ever really work together.
He concludes: “The marriage of marketing and strategy firms is still a road into the unknown. McKinsey’s 2001 acquisition of brand firm Envision, for example, ended with most brand experts leaving. Getting rational ‘Logos’ consultants to work well with creative ‘Eros’ leaders can be a tall order.”