Accenture Interactive sees faster recovery amid ‘hotter’ demand

Accenture Interactive agency Karmarama created this recent British Army ad
Accenture Interactive agency Karmarama created this recent British Army ad

All staff below managing director get bonus of one week's pay.

Accenture Interactive grew at a “high single-digit” rate in the three months to February 2021 and its consulting parent company has seen “hotter” than expected demand from clients as the global economy shows signs of recovery from the pandemic.

Accenture, the owner of Accenture Interactive, said it would give all members of staff below managing director level a week’s salary as a one-off bonus in recognition of their efforts – after its quarterly results beat expectations.

Accenture Interactive, which owns a stable of agencies and production businesses, including Droga5, Karmarama, Fjord, Creative Drive and The Monkeys, previously suffered a “low single-digit” decline in the six months between March and August 2020. It moved back into “low single-digit growth” between September and November.

“Interactive improved and grew high single-digits as companies continue to shift to digital channels, need cost efficiencies around sales and marketing to invest in new capabilities, seek more data-driven marketing campaigns and compete for customers and employees on the experience they provide,” Julie Sweet, chief executive of Accenture, said on its earnings call.

She did not discuss the performance of agencies but Droga5 had a strong, new business record at the end of 2020, winning Airbnb globally and Molson Coors in the United States, and was ranked second globally in the annual new business league for creative agencies, compiled by R3 Worldwide.

Accenture has been on an agency acquisition spree in the past five years as it seeks to expand in marketing services as part of a broad focus on digital transformation for clients.

On the earnings call, Sweet cited its work for BBVA, the Spanish financial services group, as an example of how Accenture Interactive works with other parts of Accenture’s management consulting operations.

BBVA “wanted to increase their digital sales and that brings together Operations, all of our Interactive capabilities like paid media, search engine optimisation, analytics and marketing operations, plus our deep industry experience”, she said. 

“And with our support, over the past 12 months they’ve grown their digital sales [to more than 50% of total sales] and they saw an increase in [new] digital customers of more than 50%.”

KC McClure, chief financial officer, added that across Accenture’s portfolio, it has experienced “increased demand that came back hotter than we expected” during the last quarter.

Sweet expects travel-related costs to rise as the pandemic eases but said it was “too early” to know how much clients would want to meet in person.

“Companies are really kind of all over the map” in terms of their thinking about travel and it could take another six months, she said.

Accenture Interactive has been increasingly competing with the big six agency groups, which all reported organic revenue declines of between 4% and 11% in the last quarter.

Accenture does not disclose any numbers about Accenture Interactive’s revenues or organic performance.

The parent company told investors in 2019 that Interactive was growing at a double-digit rate and had passed $10bn in revenues – making it roughly the same size as Interpublic, the world’s fourth biggest ad agency group. 

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