One of the world’s biggest consultancies, Accenture – home to arguably the largest media auditing operation – has announced it would be leaving the business. Presumably, this is because the firm sees more opportunity on the media buying side of the equation, which it has pursued in earnest via acquisitions and other investments in recent years. For media companies, the implications are varied and sometimes conflicting.
Pro: one less watchdog on the job
For too long, Accenture was able to play both the “objective” auditor and media buying provider. However, the tension finally became too much, in part due to the refusal of some of the world’s largest ad agencies to be audited by the company any longer. And, with a media buying operation that generates more than $10 billion annually, it just didn’t make sense to run the comparatively smallish auditing operation any longer. Media companies benefit by having one less aggressive and well-known watchdog lumbering around the marketplace. And, let’s face it, no one likes auditors.
Con: more pervasive data-driven media buying themes abound
Companies with roots in management consulting that buy media for advertisers apply rigorous, data-driven methodologies to their offerings. That’s why digital media buying was so appealing to them in the first place, because it played to their strengths. Accenture Interactive is arguably the largest digital media buying operation in the world today, and will now have no reason not to invest even more aggressively in its ad buying activities moving forward. This in turn will spur others in the category like Deloitte Digital or even IBM to think about bolstering their media buying chops as well — after all, if Accenture is doing it, it’s at least worth consideration. Media concerns will need to respond by continuing to bolster the quantitative benefits of their products in packaging, promotion and delivery — something the duopoly excels at.
Pro: strategy and planning priorities can be streamlined
Accenture has more than 500,000 employees roaming the world and counts 75% of the Global 500 as customers. Though the company isn’t literally everywhere, it covers more ground than just about any other non-government, non-retail company on the planet. (By comparison, IBM has 350,000 employees. And WPP, the largest advertising agency, has 130,000.) Accenture’s staff is also well-trained to identify opportunities to cross-sell different services into the client base. With media auditing off the menu, media companies can focus their efforts exclusively on figuring out how to deal with Accenture’s ad buying operation. That, of course, is a no small job in itself.
Con: Accenture’s media buying advantages will accelerate faster
Media buying has always been a tricky business, which is why so many big advertisers opted to farm out the activities to agencies like WPP, Omnicom, and Publicis. The introduction and rapid growth of the digital channel has increased complexity substantially, and emphasized the reliance on data and analysis. This, in turn, opened the door for newcomers like Accenture and Deloitte to enter the sector.
Formed in 2009, Accenture is by most accounts the largest digital media buyer in the world today, employing more than 25,000. Having been a major player for a decade now – as well as auditing the operations and books of likely dozens or even hundreds of large global advertisers – Accenture is ideally positioned to understand the weakness and pain points of media companies in a unique and disruptive way. Without having to worry about conflict-of-interest concerns related to the soon-to-be-defunct auditing business, media executives should be on the lookout for inventive new media buying negotiating tactics.
At the end of the day, Accenture’s exit from the media auditing game should be a net positive for media companies, if only because of the ability to focus on one aspect of Accenture’s offering moving forward: the media buying operation. More predictability typically results in fewer surprises and better outcomes.
That’s not to say the media auditing business overall will contract much. Media buying remains a volatile segment and not long ago was the target of an FBI investigation. Indeed, most market analysts agree that the explosion of the digital channel has resulted in more inefficiencies in the marketplace, many of which remain unaddressed. If nothing else, this event is yet another reminder that traditional media companies need to continue to invest in packaging products and their features and benefits in a data-centric manner, as the impact of quantitative-based buying methods will become increasingly pervasive in the future.