Why you would never see the world's largest digital ad agency making ads for Olive Garden, according to its head
- Accenture Interactive is the largest digital agency in the world in terms of revenue, and continues to expand at a frenetic pace.
- Business Insider caught up with the company's leader Brian Whipple during SXSW.
- Marketing chief must operate differently, he says, because brands are now built through a collection of experiences, not advertising, said Whipple
- Artificial Intelligence is poised to play a huge roll in marketing's future
The ad agency model continues to be under threat from from management consultancies, who claim that they can meet the needs of modern CEOs and CMOs by integrating traditional creative with business and tech strategy far better than classic ad agencies can.
Accenture Interactive, the agency wing of consulting giant Accenture, is no different. It is not only the largest digital agency in the world in terms of revenue, but continues to expand at a frenetic pace, making 12 acquisitions in the past 15 months and opening new offices across the globe.
While Accenture's existing relationships with Fortune 100 companies have helped steer Accenture Interactive business, it has plenty of other things going for it, says Accenture Interactive head Brian Whipple.
Business Insider caught up with Whipple during the South by Southwest Interactive conference last week for a chat. Here's an edited version of the conversation.
Tanya Dua: You've been on quite the acquisition spree over the past few years. What's the rationale behind these moves?
Brian Whipple: We are not like other financial entities where you're buying companies to just grow by revenue. That's not at all our strategy. There's really only two scenarios: one where we need to add a new capability, and the other is to scale something that we already do in other geographies.
So for instance, we bought Fjord in 2013 because we saw the connection between service design and all the technology-enabled work that we can do - and that has turned out to be a hugely successful play for us. Whereas buying PacificLink in Asia was an example of scaling geographically. So it's not quite an acquisition spree - where we decide where can we spend Accenture's money - it's more like if we need a new capability because that all be relevant to our clients in the future, we will invest in that.
Dua: But those post acquisition integrations must not always be easy. How hard is the process? Are there any cultural clashes, particularly in global deals?
Whipple: It would be accurate to say that - take a Pacific Link at Hong Kong - is very different from Accenture. But it's not very different from Accenture Interactive. If you go through the Accenture Interactive studio in Hong Kong you won't at all feel like you work for an old accounting firm or technology firm or anything like that at all. We believe in what we internally call the "culture of cultures" where the culture of these companies together makes up the culture of Accenture Interactive. We are kind of our own thing inside Accenture and we have been given great latitude in creating our own culture.
Dua: So the larger corporate culture of Accenture never seeps in or dominates the culture at Accenture Interactive?
Whipple: Accenture is a big company and it does a lot of different things, like infrastructure outsourcing and business processes and big IT consulting projects and all that stuff. And they're very successful at that.But it doesn't have much to do with us. What it does have to do with us is that CEOs of large companies are used to spending hundreds of million dollar sums in multi-year arrangements with Accenture and have a very trusted, high-quality type of relationship with it. And now, we're porting those relationships over to marketing services. That is the part of the mothership that is relevant: the role of being the trusted advisor to these companies.
Dua: What about traditional ad agencies? How similar to or different from them are you?
Whipple: You're not going to see us pitching for the new Olive Garden creative. We could do that, but we just wouldn't choose to do that. They may be great assignments for a lot of agencies, and there's absolutely nothing wrong with that. But they're going to negotiate for a $6.5-7.5 million retainer for the year, and it's going to be print and TV. We would never ever do that. But if Olive Garden wanted to invest in reinventing the restaurant experience - of which advertising would be a part - that is something we would be all over. We would rather deploy our resources in helping Maserati reinvent the car-buying experience than doing a TV spot. That's how we look at it.
Dua: And how do you think consultancies and this kind of an approach fits in with the current advertising landscape?
Another way that our business is different - not better or worse - just different, is that we not only design these experiences and architect them through technology and processes and systems, but we also manage them. It's not just about creating the tech, someone's got to manage that mobile tech, someone's got to come up with the upgrade. You can see what a powerful business model this is for Accenture. Ad agencies are not even in that business at all.
Dua: How much are these changes being driven by the changing demands of clients? How are they approaching you differently and why do you think you are better suited in responding to them?
Whipple: It is still the job of CMOs and CMO-type people, whatever you may want to call them, to build and maintain a brand. However, how that's done has changed massively. Brands were built through advertising, marketing and messaging - where you could tell someone that coffee tastes a certain way and it means happiness and sunshine and a fresh start to the day - and that coffee is Dunkin'. If you keep saying that on the radio, in the Patriots' games and on television and your signage, pretty soon, people were going to believe that.
But what has started happening, thanks to companies like Uber, like Spotify, like Paypal, is that brands are now built through experiences. Uber has transformed transportation, reinvented technology in a way that you can do everything from your device, and did not advertise for the longest time. But everyone knows that their brand is about efficiency, choice and user empowerment.
CMOs are now doing things differently because they know that brands are now built through a collection of experiences, not advertising. Advertising is relevant, for sure, and will always be, but it does not drive a brand and is one of many things that do. That coincidentally fits in well with what we want to do.
Dua: Do you think traditional agencies are justified in being threatened by you guys?
Whipple: We are absolutely not out to put them out of work at all. We will never have massive creative capabilities for the sake of creative - but we will invest in creative to the extent that it is necessary for creating those experiences, just as we would invest in AR, VR and other things. What will put them out of work though is not having a business that addresses the shift in the industry and the ability to not run experiences. They traditionally have not moved much, they might move one chess piece around, but most of them still have their founders' culture. When we do our strategy meetings and I bring all my top guys together, we don't talk about them. Ever. Not because they're not great, but they're not relevant to what we're doing.
Our competition is the inertia that thrives in every industry till today. Think about all those experiences that haven't changed in years: getting a mortgage sucks, shopping for a car is horrendous, eating at a restaurant or how you try on clothes at a department store hasn't changed. Our competition is CEOs of these corporations wanting to be risk-averse and wanting to do the same thing that they did last year. We spend more time working with CEOs to transform and disrupt much more than we ever do comparing ourselves with ad agencies.
Dua: What are some things you can categorically say you do better than traditional agencies?
Whipple: Without a doubt, owning an experience from start to finish - through design to management - we're 100% number one. Number two would be managing complicated things on a global scale, and that's where we leverage the mothership. Pick a part of the world, say Tokyo, and we have people that know the culture at Accenture Japan, people who know how to do business there, people that know how to get real estate, people that understand the work laws. We don't have ot send people on a two month project to stick a flag, the flags are already there, we just take it an expand and bring in all the digital and marketing expertise. Having that global presence and being able to help along every part of the process is something that no one else does. And thirdly, if a client wants to focus on the experience, that is uniquely us.
Dua: Another criticism that agencies level at you is that they see you at client pitches, but never end up seeing actual work. How do you respond to that?
Whipple: Depends on how you define work. What is work? And ad? Typically they would say that because they want to point to a print ad or a TV ad or a campaign at Cannes - and that would only be a piece of what we do. We're basically advising on a client's business and how to reinvent that - not on their advertising. What we do is at the center of their business strategy, which is not something they typically launch a press release around. So in that sense there is no "work" to show. But that being said, there are many examples on how we're working on the future of the shopping experience, with Whole Foods, for example, or how you're going to buy a car in the future through a car configurator. It's not like we don't have award-winning advertising. But that's small potatoes to us. Our client is the CEO, not the brand manager.
Dua: So what is it that keeps you up at night?
Whipple: What I would lose sleep on is that Fortune 100 client electing not to proceed not to proceed on transforming the retail business. And that's not happening. Another thing that I would lose sleep over is if we were one day not being able to attract the best talent in the industry. And right now, we have our pick of the litter.
If you work at an agency that does $300-400 in revenue, that's a media-sized agency. For us, that's two projects. If you're a creative director or an account planner or a strategy person, you could work on award-winning stuff for us, travel wherever globally, and some people want to be a part of that kind of a bigger picture scenario.