Rise of consultancy-ad agency blend
Accenture’s purchase of King James follows global marketing trend
Accenture Interactive SA is tapping into the R14.5bn local advertising industry with its acquisition of creative agency King James.
This is the first acquisition by the consulting firm in SA in its 50 years in the country.
The deal is in line with Accenture’s global strategy to build its creative skills capacity and enable it to offer a comprehensive service, from product design to development, marketing, communications and advertising.
Over the past few years Deloitte and PwC have also stepped onto advertising’s turf through acquisitions — a trend driven by changes in technology that enable digital advertising and market services.
There is also a demand from companies to enhance the customer experience by having access to real-time information, changing trends and the needs of consumers.
“Clients have been asking us to give them ways to connect to consumers in quick ways. The data and content that we are collecting from consumers and clients is shaping this shift that we are seeing between consulting firms and creative industries,” said Haydn Townsend, Accenture Interactive’s SA MD.
Asked about Accenture Interactive’s decision to buy King James rather than develop its own creative capabilities, Townsend said his company is strong in the design and building of new products and services, but weak in areas such as advertising media campaigns and social media — and King James is a leader in these.
“We did debate whether we grow the communication and run [advertising campaign capability] but it would have probably taken us five years … and to get that same reputation King James have in the industry, five years will at best get us the foundation.”
SA’s design and build, and communicate and run market is estimated to be worth R51bn. Of that, R14.5bn is the estimated size of the advertising industry.
Explaining the changes that led to the convergence of consulting firms and creative companies, Townsend said as technology moves closer to consumers, technology solutions and innovations are becoming much more consumer-facing.
The internet is no longer one-way; consumers and companies are able to interact, in some cases in real time.
“Customers are becoming so obsessed with talking to consumers and having consumers talk to them … the data that comes out is telling us what consumers like and dislike.
“Starting to deal with human beings that are emotional, you need insight and creativity. [To] touch a part of a human being, that requires empathy. There is a soft side that the creative industry are good at and then the hard stuff that consultancies are good at,” said Townsend.
Industry expert and founder of PR Powerhouse Lebo Madiba said it will be interesting to see the trend being rolled out in the South African context, where the advertising/creative agency-client partnership is still a popular model. This traditional model, though it still works to some degree, has not adapted to how the world is changing, and has yet to embrace the full impact of digital marketing, she said.
Madiba said consulting firms have realised the value of bolstering design and digital skills as a means to drive growth in the advertising and marketing space, which was likely a key motivator for the Accenture/ King James acquisition.
It benefits King James, too, as the consulting firm brings the sharper business acumen and consulting rigour that agencies sometimes lack.
Globally, Deloitte has also bought creative companies in recent years.
Celeste Koert, director, customer & marketing lead at Deloitte Digital Africa, said clients are challenging consulting firms for new, imaginative and creative ways to bring brand experience to life, and this is also driving the shift in industry in how it serves clients with creative and modern digital capabilities.
“At the end of the day, our clients expect us to create and design immersive brand experiences in a human-centred way that is digital, data-led, and future-fit, that will ultimately improve the way consumers experience the brand, and drive a meaningful result in their marketing efforts,” said Koert.
Madiba said having been on both the agency and corporate side of the coin, “I think that this new blended business model is the future of marketing”.
She, however, cautioned: “Both parties should just not get bogged down in bureaucracy that makes them forget why they came together.”
Koert said the local industry will no doubt monitor what’s happening with the deal between Accenture Interactive and King James.
Asked if Deloitte might pursue a similar deal in SA, Koert said: “Deloitte Digital is always looking for opportunities to grow in this space, globally and locally, and will continue to do so.
“We are always open to more partnerships and collaboration that make strategic sense and add the right business value for both.”
King James, which was founded in 1998, will retain its brand but will operate within the Accenture Interactive consumer-facing division.
King James will also strengthen Accenture Interactive’s plans to expand in the rest of Africa. “While our initial ambition is to lock down South Africa, if our clients want to cross the borders, we will go with them,” said Townsend.
The deal also gives King James the opportunity to work with Accenture globally.
Townsend said Accenture Interactive uses skills from anywhere in the world on projects and goes to where the best people are.
“With King James, we can service the global market creatively.”
Turning to other new trends, Koert said the biggest trend Deloitte is seeing is that clients are asking for assistance on how to create and deliver immersive brand experiences, how to future-proof their marketing functions, and how to drive growth in their portfolios.
“The world is moving to a place where the importance of capturing the imagination of people through creative capabilities, combined with digital, tech data and customer insights, is becoming more and more prevalent. You really need top-notch creative capability, combined with digital, analytics and tech, to serve clients best in this modern creative world,” said Koert.
Clients are also expecting consulting firms to uncover new sources of growth, develop new market propositions, and help optimise their marketing efforts.
“Whilst some clients are happy for us to work with their incumbent agencies, others expect us to offer an end-to-end service.”
Koert said one of the lessons learnt from Deloitte globally when it bought creative agencies in is that when creatives and professional services are combined, one has to bear in mind that these are two distinctly different cultures being brought together, and it does take some time to integrate.
“We have to create the right space for creatives to coexist within a professional services firm, and continue to nurture the creative talent.
“We have to be deliberate about how we integrate the creative proposition fully with that of the strategic consultancy. And that is easier said than done.”
Helen McIntee, president of the African Marketing Confederation, said the Accenture/King James deal is a game changer as it recognises that creativity is not an add-on to strategy, technology or process — creativity has to be inherent in all areas of the mix. This acquisition is a clear indication that consulting firms will need to start focussing on more imaginative solutions to their clients’ needs, and that creative agencies will have to up their game in the business department, she said.
McIntee said there will always be room for the independents, especially for those with smaller budgets. “I believe this will, however, change the conversation. The independent creative industry should take heed of this bold move and look at more integrated creative solutions, perhaps even backward engineering these solutions into their clients’ … vision, strategies and operations.”
Our clients expect us to create immersive brand experiences Celeste Koert
Director, customer & marketing lead at Deloitte Digital Africa
There is a soft side that the creative industry is good at Haydn Townsend
Accenture Interactive’s MD for SA