Accenture Interactive 'significantly impacted' by coronavirus slump

GoCompare: advertising handled by Accenture Interactive's Droga5
GoCompare: advertising handled by Accenture Interactive's Droga5

Clients focused on 'shoring up what they had', owner of Droga5 said.

Consulting giant Accenture has warned that its digital marketing services arm, Accenture Interactive, which includes agencies such as Droga5 and Karmarama, has taken a big hit because of the coronavirus economic slump.

Accenture Interactive "was significantly impacted" in the three months to the end of May as clients "focused more on shoring up what they had, as opposed to thinking about the next generation of customer experience", Julie Sweet, chief executive of Accenture, said on the company's quarterly earnings call.

"We’re now seeing those conversations begin again," she added, noting that "B2B companies" – what she called "the industrials" – were particularly keen to get help in shifting from field sales and face-to-face operations to online because of the crisis.

The coronavirus outbreak began in China in late December, before going global in March.

Accenture’s quarterly revenue growth slowed to 1.3% in the three months to the end of May, from 8.4% for the same period a year earlier.

The parent company said some parts of its business, including cloud computing and security, were "up" in the quarter but did not comment directly on Accenture Interactive’s growth beyond saying that it was "significantly impacted".

Accenture Interactive had previously seen "significant growth" before the virus crisis and passed $10bn in annual revenue last year, Sweet pointed out.

That made Accenture Interactive roughly equal in revenue as Interpublic, the world’s fourth-largest agency group.

The consulting giant launched Accenture Interactive in 2009 and has bought more than two dozen agencies in an increasingly aggressive move into digital marketing services as it seeks to challenge big agency groups such as WPP, Omnicom, Publicis Groupe and Interpublic.

Accenture Interactive has positioned itself as an experience agency of record that can manage every aspect of a client’s customer experience, not just advertising and marketing.

"The need to digitally transform" remains "strong", Sweet said, referring to Accenture’s client base.

In a sign that consulting and creative services are colliding, WPP recruited Andy Main, global head of Deloitte Digital, a rival to Accenture Interactive, to be global chief executive of Ogilvy earlier this week.

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