Accountancy giant Deloitte Touche Tohmatsu set up its own dedicated digital unit in 2012 to offer strategic and design services to mainstream consultancy and audit clients. It had already offered these services informally under the arm of its management consulting unit, and has expanded its range of services through selective acquisitions, including Seattle agencies Ubermind and Banyan Branch, as well as international agencies (including Sweden's Mobiento in 2015). In one of its most aggressive pushes into more traditional marketing services it acquired San Francisco-based creative shop Heat in early 2016. By the beginning of that year, Deloitte Digital had studios in 16 countries globally, in North America, Europe and Asia. It offers traditional web design and content, social media and mobile, but also more technical areas such as security, ecommerce and analytics, and of course business consultancy, logistics and tax planning via its parent group. Like rival Accenture, which has an even broader offering, and also KPMG and PwC, Deloitte has begun to carve out a significant presence in the marketing services industry, competing in pitches against traditional digital agencies, especially for technology-based, less creatively-led services. Mike Brinker is founder and global leader, and he has expanded the team by poaching several senior managers from traditional digital agencies such as SapientNitro and AKQA. Andy Main heads operational duties. AdAge estimated global revenues of $1.65bn in 2015, including $865m in the US. Subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
Capsule checked 16th January 2017
Adbrands Weekly Update 17th Aug 2017: Consultancies continued to expand their operations into traditional marketing services. Deloitte announcer the acquisition of Swedish creative agency Acne - perhaps best known internationally for the recent high-profile ad it made for Ikea promoting the retailer's blue shopping bag as a fashion accessory. Deloitte also recruited former Havas London ECD Andy Sandoz as partner and UK chief creative officer.
Adbrands Weekly Update 20th Jul 2017: In another sign of the rise of the consultancies, San Francisco creative agency Heat, a unit of Deloitte Digital, was awarded global creative for financial services company Manulife, including its US subsidiary John Hancock. The account had been managed by Interpublic's Hill Holliday. Heat president Mike Barrett told AdAge, "Being part of Deloitte allows us to tap a set of resources that right now are not matchable by any ad agency. There is no ad agency that knows the financial services industry better institutionally than Deloitte as a firm." It didn't go entirely the way of the consultancies. WPP's Wunderman and M/Six will manage global media and analytics, taking over from Mindshare.
Adbrands Weekly Update 5th Jun 2017: Management consultancies PwC and Deloitte took further steps to bolster their marketing offering with acquisitions of traditional agencies. Deloitte's target was design agency Market Gravity. The two companies have already been working together on the launch of Yorkshire & Clydesdale Bank's digital Studio B service. Headquartered in London, Market Gravity also has offices in Edinburgh, New York and Toronto. Earlier in the week, PwC signed a deal to add Swedish product and service design agency Pond. Deloitte and PwC currently lag behind Accenture in the acquisition-led crossover into traditional marketing services, although Deloitte has also been linked to a possible bid for WCRS parent Engine Group. However, in an interview with the WSJ, PwC's global digital chief Tom Puthiyamadam was actually rather dismissive of traditional marketing agencies. Asked his views on Sir Martin Sorrell's recent comment that WPP agencies had not generally found themselves up against consultancies in pitches, he said “You know why? He’s in the wrong pitches. He’s actually solving the wrong problem. He’s solving yesterday’s problem on driving more leads, through better campaigns and better creative." Yet, that, said, Puthiyamadam, is an area where spend is actually decreasing. Instead PwC aims to solve more fundamental problems like customer support, logistics and distribution.
Adbrands Weekly Update 18th May 2017: In a development that would potentially alter the dynamics of the marketing industry, management and accounting consultancy Deloitte was reported to be considering a bid for Engine Group, best known for its UK ad agency WCRS as well as a collection of other units. The story was first reported by The Drum. Currently, Engine is owned by US private equity fund Lake Capital. Its managing partner, and Engine executive chairman, Terry Graunke refused to comment directly on the speculation, but told The Drum "We continue to enjoy being an independent group with a strong entrepreneurial culture... we continue to focus on growing the group organically and by acquisition and remain robustly financed. It’s business as usual." In other words, not unless the price is right. A deal would, arguably, catapult Deloitte ahead of Accenture as a force to be reckoned with in traditional marketing. However, it would still sit behind Accenture and PwC in marketing-related revenues, according to AdAge's estimates. Deloitte's most significant purchase in the field to-date is San Francisco creative boutique Heat.
Adbrands Weekly Update 4th May 2017: Some intriguing soundbites from the article in this week's AdAge about the rise of the consultancies. "We don't believe brands are built from advertising any more," says Accenture Interactive senior managing director Brian Whipple. "They are built from an amalgamation of customer experiences, so that is what we are focused on." And Leo Burnett's new North America CEO Andrew Swinand told AdAge, "I don't see my competition as WPP and Omnicom, I see my competition as the consultancies." That may certainly be the case as far as data analytics and strategic positioning is concerned, or digital services, but we haven't yet seen Leo Burnett lose a major creative pitch to a the likes of Accenture or PwC. However, admittedly, all it would take for the competition to become explicit would be another acquisition similar to Accenture's of Karmarama in the UK. Perhaps the most accurate viewpoint was that expressed by Coca-Cola's SVP strategic marketing Ivan Pollard. "The big consultancies are underestimating the value of creativity and the agencies are underestimating the value of business analytics. Someone's going to crack that soon because data plus creativity is the future." For the first time, four of the major consultancies were listed among AdAge's estimates of the top ten agency companies worldwide. Accenture, PwC, IBM and Deloitte now hold the next four slots below the traditional big five groups, ahead of challengers like Havas and Hakuhodo DY. AdAge placed Accenture as the world's biggest consolidated network, above Young & Rubicam. Agency-side executives suggested that key to the consultancies' growth has been their ability to find alternative routes into corporate marketing budgets. Rather than compete with established marketing groups by pitching to the CMO via traditional channels, they are entering the fold through direct contact with the CEO or IT director or non-executive members of the board. Another advantage, according to R/GA's CSO Barry Wackman, is that "consultant work is much less prone to being scrutinised by procurement".
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