5 Things To Know About Accenture’s Droga5 Acquisition

Not Just Another Acquisition

Accenture has previously stated that it planned to spend as much as $1.5 billion this fiscal year on M&A, and so far it has made good on that, spending at least $500 million in the first two quarters, the company said after its most recent earnings call.

This, while Accenture is still reeling from the death of longtime CEO Pierre Nanterme, and continues its search for his replacement. Interim CEO David Rowland has said that the leader search will have no bearing on the company’s operations including acquisitions. With a new top executive expected to be named before the end of the fiscal year, Accenture moved forward Wednesday with its high-profile purchase of Droga5.

The advertising agency boasts 500 employees in offices in New York and London. While the terms of the deal were not disclosed, Droga5 would be Accenture Interactive’s largest acquisition since the group was founded in 2009.

Why buy Droga5?

According to Accenture Interactive, the acquisition will give the company a “distinct marketplace position,” which will allow it to help the brands it works with deliver forward-looking strategies. Accenture Interactive said this is the evolution of its journey to build a new mode with “the power to engineer transformative brand experiences

“The future of brand building is not just about creating great ideas; it’s about creating great experiences,” Brian Whipple, global CEO of Accenture Interactive said in a statement. “We’re excited to work with David Droga and his team of brand strategists and creative minds to further our ambition to improve the full human experience with brands. As we celebrate the 10-year anniversary of Accenture Interactive, joining forces with Droga5 will be a game-changing milestone for us and the industry as we continue to assemble the right mix of capabilities for the modern-day marketer.”

Who is Droga5?

Droga5 was founded by David Droga in 2006. The highly-acclaimed creative agency -- with more than 500 employees in New York and London -- has been lauded for its “industry-challenging work.” Clients include Amazon Prime Video, Tourism Australia, The New York Times, IHOP and Game of Thrones’ Super Bowl ad. According to a statement, Droga5 was named agency of the year 20 times by Adweek, Advertising Age, Cannes Lions International Festival of Creativity, and the North American Effie’s, among others. Droga5 said it also partners with brands such as Chase, Prudential, Kraft, Hershey, Hennessy and Under Armour.

“Since day one, we have worked hard to push our industry forward and, hopefully, make a positive impact for all,” said David Droga, founder and creative chairman, Droga5, in a statement. “The world of advertising is changing, and we are excited for this incredible opportunity with a company that will add more dimension to our best ideas and push us beyond our existing ambitions. The proposition we can bring to market with Accenture Interactive will transform the industry.”

Why will these two companies work well together?

Accenture Interactive and Droga5 said in a statement that both companies were born in the “digital age” and have thrived in an industry that experiences sudden, radical changes. Both companies, were named “2019 Fast Company Most Innovative Companies in Advertising,” Accenture said in a statement. While Accenture Interactive was lauded for blending strategic consulting, ad-tech and creative work,” Droga5 was recognized for its ad campaigns.

“Customer experience is a proven driver of competitive advantage and sustained business growth – and, we are delighted to bring Droga5’s highly differentiated capabilities to help Accenture Interactive transform experiences for our clients’ customers and continue to be a catalyst for disruption across the industry,” David Rowland, interim chief executive officer at Accenture said in a statement.

Who will stay and who will go?

Accenture said on the Droga5 side, company founder Droga will remain in his role as creative chairman of Droga5, Sarah Thompson will continue as the company’s global CEO and Bill Scott will remain as U.K. CEO, working alongside the rest of the agency’s management team.

“This is the start of an exciting new chapter in Droga5’s history. Accenture Interactive is one of the most disruptive forces in the industry, and we have always been a safe space for audacious ideas,” Droga said in a statement. “I’m confident they are the best partner to grow our business and provide greater opportunities for our clients and our people. Why live off past glories when you can get busy trying to create new ones?”

What are the other Accenture Interactive buys?

Once the deal clears regulatory hurdles, Droga5 will represent Accenture Interactive’s biggest acquisition since its founding in 2009. Early acquisitions include design firm Fjord and e-commerce specialist Acquity Group in 2013. More recent deals include, such as creative shops Karmarama and The Monkeys, as well as expanding into technology areas such as extended reality and other services that the company said keep Accenture Interactive ahead of the ever changing needs of today’s CMOs.