Accenture Interactive returns to growth after six-month decline

Accenture Interactive, the owner of Droga5, Fjord, Karmarama and The Monkeys, moved back into revenue growth in the last quarter, after a decline in the previous six months because of Covid-19.

The digital marketing services arm of consulting giant Accenture reported “building momentum, with a return to low single-digit growth” in the three months to the end of November.

Accenture also disclosed for the first time that Accenture Interactive suffered a “low single-digit decline” across the previous half-year between March and August during the worst of the coronavirus lockdowns.

The company did not give a breakdown of the decline in each of those two quarters.

“The crisis had a significant impact [on Accenture Interactive] due to severe disruptions in industries like travel and retail, and due to our clients being focused on shoring up their businesses, rather than the next generation of experiences,” Julie Sweet, chief executive of Accenture, told investors on its earnings call.

Revenues have picked up again “as clients focus on creating new experiences in the new environment” and “need to accelerate their digital transformation”, Sweet added.

Accenture, whose financial year runs for the 12 months to August, does not publish financial numbers for Accenture Interactive but told investors last year that it was growing at a double-digit rate and had passed in $10 billion in revenues – making it roughly the same size as Interpublic, the world’s fourth biggest ad agency group.

Accenture Interactive has bought dozens of digital agencies and other related businesses in recent years as it has muscled on to the territory occupied by the big agency groups such as WPP, Omnicom, Publicis Groupe, Interpublic Group and Dentsu.

Sweet pointed out on the latest earnings call that its digital marketing services business does not operate in isolation and the parent company is “embedding” Accenture Interactive’s capabilities “in all of our services” across the consulting giant.

Clients are often looking for broad business “outcomes”, rather than looking to use Accenture for just one service, and “experience is a really important part of it”, she suggested.

Accenture Interactive has described itself as the experience agency of record that can manage every aspect of customer experience, not just advertising and marketing, in a connected, digital world.

It recently updated its positioning around what it called “the business of experience” to reflect how clients need to focus their whole organisation, not just their customer operations, around experience.

Accenture Interactive’s return to growth is the latest sign that marketing services have been recovering from the worst of the coronavirus slump after the nadir of Q2.

Some agency groups, including Omnicom and Dentsu, suffered double-digit revenue declines in both Q2 and Q3 in the middle six months of the year.

WPP said at its investor day last week that trading conditions continued to improve in October and November, although its revenues still fell 6.7%.

Mark Read, chief executive of WPP, took a fresh swipe at consulting firms. Agency groups are well placed “in a world where there is a premium on inventing the future” – “not how we implement according to a spreadsheet or a manual”, Read insisted.