* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *

Accenture

Profile subscribers click here for full profile

Accenture is a leading global management consultancy, but also increasingly a marketing services provider in its own right. Although it offers business consulting in virtually every sector of industry, the group developed a particular emphasis in the 2000s on assisting clients with the integration of IT services and outsourcing. Far from being damaged by the 2008 economic downturn, Accenture's performance improved as clients rushed to cut costs by outsourcing or improving their internal efficiency. Arguably more marketing-conscious than its competitors, it developed an unusually high profile for its industry through a long-running marketing campaign featuring, until the end of 2009, superstar golfer Tiger Woods. As a result it was one of the first management consultancies to begin itself offering marketing services to its clients. A dedicated marketing sciences unit which aimed to help clients get the maximum effectiveness from their own advertising and media strategy has been expanded through the acquisition of a succession of third party units, including digital agencies Acquity Group and Javelin Group. In 2016, in a first step into full service marketing, it acquired London creative agency Karmarama; followed in 2017 by German digital agency Sinner Schrader and Australian creative shop The Monkeys and Ireland's Rothco; then MXM and others in 2018. Its most prestigious deal to-date was the purchase of admired agency Droga5 in early 2019.

Advertising

Who handles advertising? Click here for agency account assignments from adbrands.net. The group declared advertising costs of almost $81m in 2016.

Competitors

See Business Services Sector index for other companies

Brands & Activities

Accenture now has more than 200 offices across 56 countries. It offers a wide range of what it calls "high performance business" consultancy services including strategy, customer relationship management, financial management, human resources and supply chain management to technology implementation, deployment, maintenance and outsourcing. The company's literature states "We identify new business and technology trends and formulate and implement solutions for clients under demanding time constraints. We help clients identify and enter new markets, increase revenues in existing markets, improve operational performance and deliver their products and services more effectively and efficiently." Although it has strong rivals, Accenture is regarded as one of the frontrunners in the global outsourcing sector.

Accenture is structured as 19 industry-specific consulting practices, grouped under five headings of Communications, Media & Technology; Financial Services; Products (such as automotive or consumer goods); Resources (including Chemicals and Energy); and Health & Public Service (including government departments). These work in conjunction with five cross-group service offerings of strategy, consulting, technology, operations and digital.

The most significant cross-group unit as far as the marketing industry is concerned is Accenture Digital (originally Accenture Marketing Sciences until 2009). This is an international business, which was originally launched to help companies develop analyse brand value and measure marketing effectiveness, primarily in digital marketing. In 2005, the group purchased Media Audits, a global consultancy which had specialised in analysis of returns on investment in advertising, and it has supplemented its profile through a series of acquisitions of other local companies. The unit began to also offer specialised consultancy in areas such as media management, digital, marketing analytics, merchandising and trade marketing.

At the same time, Accenture widened its offering to creative services, developing and optimising marketing campaigns for clients including P&G, American Express and BMW. It has also assisted marketer clients on a consultative basis with agency reviews. In 2012 it acquired digital production services firm AvVenta, followed in 2013 by UK design agency Fjord and then US agency Acquity.

Established originally as a tech consultancy in 2001, Acquity evolved into something of a digital allrounder, although it has a particular reputation for B2B, ecommerce and mobile marketing. It acquired search marketing agency Anova Group in 2011. A majority shareholding was acquired in 2008 by Hong Kong-based investment fund 2020 China Holdings, although Acquity continued to be led by founder Chris Dalton. The agency was associated for several years with Chinese sportswear brand Li Ning, but those ties were largely severed in 2013. Acquity issued an IPO in Spring 2012, and revenues jumped by almost a third that year to $141m. The following July Acquity was acquired by Accenture for $316m, becoming a unit of what is now marketing services division Accenture Digital. The Chinese operations were wound down and Dalton left the business.

Other acquisitions have followed. UK ecommerce agency Javelin, Swedish digital developer Brightstep, Australian digital shop Reactive Media and Hong Kong's PacificLink network were all acquired in 2015.

However Accenture Digital's most aggressive crossover into the domain of traditional marketing services groups launched at the end of 2016 with the acquisition of London-based creative shop Karmarama for an undisclosed sum rumoured to be £50m. In early 2017 it also added leading German digital agency Sinner Schrader, followed a few months later by noted Australian created agency The Monkeys (for a reported sum of up to US$48m). Leading Irish agency Rothco joined the portfolio at the end of 2017.

The group continued with its acquisition drive during 2018, commencing with content development and CGI company Mackevision in January.

During 2016, Accenture Digital was restructured into three separate divisions. Accenture Interactive houses the creative services businesses like Acquity, Karmarama and Sinner Schrader. It is partnered by engineering unit Accenture Mobility and the performance-monitoring consultancy Accenture Analytics.

Accenture has long been more marketing-conscious that its main rivals, placing a much higher emphasis on corporate branding than other professional services suppliers. In 2003, Accenture struck what is thought to have been a three-year endorsement agreement with golfer Tiger Woods to feature in its global advertising as a symbol of high performance. That relationship was renewed and continued until the end of 2009 when damaging revelations regarding Woods' apparently numerous extra-marital affairs prompted Accenture to pull the plug on their relationship. The company remains a major sponsor of golfing tournaments, including the Match Play Championship. Other sponsorship partnerships include the Royal Shakespeare Company and the Louvre Museum in France.

Financials

For tax reasons, Accenture became a Bermuda-based company after renouncing partnership status in 2001. It transferred its place of incorporation to Ireland in 2009, although its executive headquarters remain in New York.

Group net revenues have risen steadily year-on-year. Topline exceeded $30bn for the first time in year ending August 2014, and then rising by another 6% in ye 2016 to $32.88bn. Net income soared by almost a third that year to a record high of $4.35bn. That included a $849m one-off gain from divestitures, primarily of airline consulting business Navitaire, which was sold to Amadeus. Revenues were split 54/46 between consulting and outsourcing services. Products has been the group's biggest practice for several years, generating almost 26% of revenues in 2016, and 27% of operating income, slightly ahead of financial services (21% and 23% respectively). North America accounted for 48% of sales and Europe for 35%.

Accenture's total net revenues for the year to 2018 rose 14% to $39.6bn, while net income was up 10% to $4.1bn.

The group doesn't break out revenues from different services. However, AdAge estimated revenues from digital marketing services of $4.41bn in 2016, including $1.74bn from the US.

Background

The firm was originally established in 1989 as a breakaway from the once-great accountancy firm Arthur Andersen. Under the name Andersen Consulting, it arguably created a new niche by blending traditional IT services with management consultancy techniques and customer relationship management systems. It was unusual in its field when it began offering large-scale outsourcing contracts in 1991, including a landmark deal to take control of all BP's accounting, finance and support functions, and then launched technology R&D centres in the US and Europe in 1994.

Although the business had continued to operate under the overall control of the Andersen Worldwide board, the relationship with its former parent became increasingly uncomfortable, and in 1997, Andersen Consulting CEO Joe Forehand began legal steps to separate the business completely from Arthur Andersen. That process was completed at the end of 2000, but as part of the divorce the company was prohibited from using the Andersen brand. Instead it adopted the name of Accenture, launching an entirely new identity from scratch with a huge worldwide advertising campaign.

Daunting at the time, the exercise was later to prove enormously beneficial. There was no impact whatsoever on Accenture when the Andersen brand was subsequently disgraced as a result of its involvement in the Enron financial scandal. Meanwhile, Accenture transformed itself from a collection of local partnerships into a corporate entity and was floated in July 2001 in a very successful IPO. Bill Green replaced Joe Forehand as group CEO in 2003.

Last full revision 7th July 2017

* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *


All rights reserved © Mind Advertising Ltd 1998-2020