Accenture folds media audit arm: ‘You can’t be an auditor and a competitor’

Accenture is shutting its media auditing arm Accenture Media Management. An Accenture spokesperson confirmed to Marketing that the company has decided to ramp down the area of its business that performs media auditing, benchmarking and agency pitch services by the end of August 2020. As part of the plan, it will work with clients to fulfill existing commitments and support their transitions. While the spokesperson declined to disclose headcounts by location, she added that Accenture is working with the employees in impacted areas to redeploy them to other roles across Accenture. 

Currently, Accenture’s website states that it audits more than US$40 billion of global advertising spending each year and invests more than US$5 million annually in proprietary tools and media research. Services offered by Accenture Media Management are agency pitch management, media strategy and consulting, media verification, savings trackings, media benchmarking, and financial compliance. 

Simultaneously, its digital marketing business Accenture Interactive has also been steadily ramping up its advertising offering and bagging accounts such as BMW Group, Maserati, and Radisson Hotel Group. Notably, it has made several significant acquisitions of ad agencies such as Droga5, Rothco, The Monkeys and Maud and Ho Communication, amongst others over the years. In 2018, it also increased investment in programmatic in-housing as well as media planning and buying by launching Accenture Interactive Programmatic Services. Meanwhile, according to Accenture’s 2019 annual report, Accenture Interactive surpassed US$10 billion in annual revenue the past year.

The unraveling of events concerning Accenture Media Management saw a fair amount of unhappiness and backlash from traditional agency holding groups such as WPP taking a stand against Accenture-led audits, as reported by Digiday. In fact, WPP said that it would no longer participate in pitches or media audits led by Accenture in 2020 as it would allow Accenture a way to dig up trade secrets, intel and talents. Marketing has reached out to WPP and Omnicom Media Group for comment.

With the news of the media auditing arm now winding down, Vishnu Mohan, APAC CEO of Havas Group told Marketing that the move was a long overdue one and should have come much earlier given the forays of consultants into the advertising business. Mohan added that he hopes a similar outcome might happen to the “pitch consulting business which is also stripped of conflicts as many consultants are currently actively engaged concurrently with their communication business”.

“This will bring transparency and raise the benchmarks of the advertising business,” he added.

Meanwhile, Ashish Bhasin, Dentsu Aegis Network’s (DAN) APAC CEO and chairman of India, said it was a step in the right direction and something like this had to happen as there was a clear conflict of interest. “You can’t be an auditor and a competitor for the same service. From the perspective of agencies and clients, how can you be assured of impartiality if you have a similar service to offer?” he said.

According to Bhasin, while Accenture’s focus has largely been in the West, a company that large in scale and size will always remain a competitor. Although some might see consultancies as a threat, Bhasin said it is a huge opportunity for agencies.

“Clients in Asia Pacific do not want to pay only for power point presentations or directions that consultants tend to give. Instead, they are looking for ideas that can be implemented at scale but yet are price sensitive,” he said. Bhasin added that unlike Europe or the US, Asia Pacific is a price sensitive region, so for consultants to be able to handle implementation at scale at a valuable price point like agencies, is “going to be virtually impossibly because their cost structures are so different”. Bhasin added that while consultancies may get small assignments, the real test is if they are able to implement the ideas at scale, which is something agencies are better placed at doing.

“Agencies have intelligent people and it is a good opportunity for us, with our talent pool, to go up the food chain than come down. If we can do that, our renumeration will improve which means our margins will improve,” he explained.

Reactions from competitors

R3 co-founder and principal Shufen Goh said Accenture was a “significant competitor” for the auditing side of R3’s business in Asia. She deemed the company’s move into programmatic buying in 2018 “was a harbinger” of where it competed head on with agencies. So, this is an “inevitable conflict” Accenture would need to address.

She added that clients in Asia are now more concerned about transparency and accountability. Moreover, procurement and finance professionals are now also more knowledgable about the risks in compliance and governance as media dollars get diversified into more channels online and offline. As such, clients are concerned “about holistic efficiency and effectiveness of their media spend, not just how their TV rates compare to a pool”.

“With more spends flowing to digital, clients are now asking very good questions about digital performance benchmarks,” she added.

Also weighing in on the conversation is David Indo, co-founder and CEO of ID Comms, who said this represents a huge opportunity to reshape the audit market to ensure that it properly serves advertisers. Some of the methodologies used by the well-established media auditing firms, including Accenture Media Management, are now out-dated. According to him, pool-based auditing, which was satisfactory in the days when broadcast TV dominated and pricing was easier to calculate, is now increasingly less relevant as media-buying has become biddable and auction-based.

“The time has come to update the auditing offer so that it covers more media channels and identifies value rather than price and becomes actionable and informative for marketers to optimise future media decisions,” he explained.

Like many industry players, Indo said the move has not come out of the blue and that Accenture’s presence in the auditing business has been an issue for agencies ever since it started competing more directly for client business. He explained that big agency groups were concerned that it allows a rival too much valuable information, particularly when it came to client pitches which would give them access to highly valuable intel about the processes, talent and pricing models of the world’s leading agencies.

“Accenture has always promised that the auditing and agency arms of its business were ring-fenced but that hasn’t been enough to reassure the agency groups. Closing down the auditing business is easy, however, given its small size compared to the more than US$10 billion in annual revenues already earned by the agency arm of Accenture Interactive,” he said.

Meanwhile, Leela Nair, managing director SEA, Ebiquity told Marketing the move is “spot on” and that Accenture is demonstrating a good example of the importance of ethical business practice. An independent consultancy, Ebiquity is known in the industry with the largest auditing offer in advertising, and is one of Accenture’s main competitors. According to American internet company Owler, Ebiquity has an annual revenue of US$88 million.

“Conflict of interest is a relevant consideration for industry stakeholders,” she explained.

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