Banking On Creativity

Management consultant company makes an unusual move.

Accenture Interactive has made another major investment in the advertising sector, with the acquisition of global creative agency Droga5.

The New York–based agency will become part of Accenture Interactive, boosting its capabilities as an agency able to design, build and run customer experiences. It will become the “world’s largest experience agency,” the company claimed in a press release.

Many observers were left wondering what the two companies might have in common and why Accenture would want to purchase Droga5 in the first place. But Greg Paull, principal and co-founder at R3, a consulting firm that works with Madison Avenue agencies and marketers, says it was a bold move that represents how business could be done in the future, calling the acquisition a “seismic shift for the industry.”

“I really think it’s going to change the mindset of how consultants are perceived,” says Paull. While Accenture Interactive has bought several creative agencies overseas, those were “nothing of this scale, and nothing as US-centric as this.”

According to Fast Company, this is the industry’s highest-profile deal in recent memory. In 2017, the two companies brought in around $8 billion in collective revenue. Completion of the acquisition is subject to customary closing conditions, including antitrust clearance. Financial terms of the agreement have not been disclosed. Australian founder David Droga will stay on as creative chairman, as Accenture works to accelerate its mission to “reinvent the agency model.”

“The future of brand-building is not just about creating great ideas,” Accenture Interactive global CEO Brian Whipple said in a press release. “It’s about creating great experiences.”

Droga5 last reported annual revenue for 2017, when it exceeded $200 million, according to The New York Times. The firm has produced ads for such notable companies as Under Armour, Newcastle Brown Ale and Bud Light.