Accenture triggers adland earthquake. Effects unknown

From decoding the macho business talk, to predicting how other management consultancies will react, Dominic Mills assesses Accenture’s surprise purchase of Karmarama

I don’t think Karmarama’s chairman, Jon Wilkins, is much given to complacency. But he can be forgiven for looking back on the past week with a quiet sense of satisfaction.

Wilkins moved into Karmarama in January 2014. It wasn’t an auspicious time; Karmarama had just lost its biggest client, £40m B&Q, causing a flutter or two in what passes for the heart of its private equity owners.

This left Wilkins with two monkeys on his back. One, a gaping hole in the business plan; and two, a nervous owner he knew would sooner or later look to sell up, that being the modus operandi of private equity.

Almost exactly three years on, the B&Q-shaped hole has been filled and Karmarama has new owners.

Better still, the deal with management consultancy Accenture has effectively triggered an earthquake in adland. Yes, Accenture and its peers – the likes of Deloitte, IBM and PwC – have been truffling around the space for a while, acquiring digital agencies here and there and venturing into the space between technology and customer experience.

But this marks a step change, the first time a management consultancy has acquired a mainstream agency whose core proposition is creativity, even if Karmarama has added on skills in mobile, social and adtech that might overlap with Accenture. Not surprisingly, the speculative tremors are reverberating around adland.

Does this herald a new form of competition? Will its peers follow Accenture’s lead? How will the agency business model change? How will CMOs react?

Who wouldn’t enjoy causing a stir like that? To top it all, it was also a week in which Wilkins celebrated his 50th birthday and which ended with his beloved Chelsea sitting atop the Premier League.

But first a word of caution. Those who’ve been to Karmarama’s Farringdon Road offices know it has a fondness for neon signs. One says ‘Good Karma This Way’. Another says ‘Kein Wixer, Bitte’, which translates as ‘No Wankers Here, Please’.

Wilkins (pictured, below) should stand at least one of his new partners under the new sign, cough politely and point upwards. That is Brian Whipple, head of Accenture Interactive, Karmarama’s new parent unit.

Interviewed last week in Business Insider, Whipple displayed a taste for speaking management wank. However moribund, he couldn’t avoid trying to breathe new life into clichés at least two decades old. Thus he talks blithely of Accenture as “laser-focused” (yawn), the “bleeding edge” (fingers down throat) and Karmarama as a “media agnostic, technology agnostic, experience-first agency concept” [sic] (WTF?).

A concept? I don’t think so, Brian. Karmarama isn’t a concept, it’s a living, breathing entity.

Just for good measure, dear old Brian also – as is obligatory for any ‘laser-focused’ management consultants – talks macho. For Accenture had, he said, no less than an “immediate mission to seek and destroy and dominate the market”.

I don’t know about you, but this doesn’t make sense. What’s the point of dominating a market that’s been destroyed?

Use of this kind of language suggests to me that, for all the expressions of mutual love and shared cultures, the two parties are not as aligned as they like to think they are.

Anyway, the carping aside, does the deal make sense? Of course it does.

From Accenture’s point of view it gets access to the kind of talent, skills and creative and planning thinking it might normally find hard to attract. Much of Accenture’s work – whether through the consultancy arm or its Interactive unit – is commissioned by the CEO, CIO or CTO.

Rarely, or certainly not regularly, does it deal direct with CMOs. The addition of Karmarama means Accenture can now start talking meaningfully to the latter group and gives it another point of entry into client organisations. Accenture’s top consultants who, such is the strength of their hold on the client are like big-account barons of yore, have something new to bring to the party.

As I understand it, most of the work done by Accenture Interactive agencies is a layer on top of what the consultancy arm already does – i.e. digital transformation, focused (sorry, ‘laser-focused’) on data, e-commerce and fulfilment. As such, it is internally oriented. Karmarama gives it credibility in more consumer-targeted work such as brand communications.

The other side of the coin applies to Karmarama. In its conversations with clients, it has something new and different to offer. No longer is it just another ad agency. It too has access to, or can acquire, skills and thinking it would have found hard to attract before.

The real question, from its point of view, is whether there is a cultural fit, and whether it can retain its identity. I certainly understand Wilkins’ insistence that, compared to Accenture, Karmarama would not have been as comfortable a fit had it been sold to one of the big holding companies. From their point of view, it’s just another agency – albeit one with a few quirks and differences – and would have been shoved into an anonymous corner of some mighty empire.

Will the likes of Deloitte, E&Y and IBM follow in acquiring creative agencies? I suspect they will, but if they’re looking for independents of any scale and (importantly) tech-savviness, they are mighty hard to find. Even Karmarama, one of the largest in that category, is pretty small.

So while the indies might see flashing dollar signs, nothing is going to happen fast. Indeed, in the meantime, the holding companies might snap up a few if only to keep them out of the hands of the management consultancies.

One final point: if Accenture wants to deepen its relationships with CMOs, will it venture into media? Given the suspicion that lurks around media agency and trading desk practices, some clients might like it to. The barriers to entry are far lower than they used to be, the likes of Accenture are more than comfortable with the tech, and they are generally held in high trust by their clients. As we also know, the margins are far higher than in digital and creative work.

This might be tricky, however. The management consultancies are big in media auditing – Accenture itself claims to audit $40bn worth of spend – so there’s an obvious conflict of interest.

But, hey, there’s no-one as skilled as management consultancies at facing both ways at the same time.

So the earthquake has gone off. As yet, however, the Richter Scale can’t be measured, and the after-effects have yet to ripple through.