‘Conflict’ questions as Accenture shuts media auditing arm

25 February 2020 Consultancy.uk 4 min. read
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Multifaceted professional services firm Accenture has announced plans to shut its media auditing business, as it looks to pick up programmatic media planning work via its Interactive brand. The news comes in the wake of allegations of a conflict of interest for the consultancy, particularly from advertising giant WPP.

Since commencing its billion-dollar drive into the lucrative advertising industry, Accenture Interactive has consistently demonstrated its ambition to be the globe’s most trusted advisor to chief marketing officers, with a holistic offering that combines its newly added creative capacity with the clout of its established advisory and analytics capabilities. According to Accenture’s Interim Chief Executive, this approach saw the firm growing largely organically, at a rate in excess of 20% by 2019, even amid sustained hostility from the advertising industry. The firm’s arrival in the sector has not been without controversy, however.

Creative sector incumbents remain hostile to Accenture’s encroachment on the market, and despite a mounting pile of evidence heralding Accenture’s growing role in the advertising industry, sector giant WPP has maintained that the marketing revenues of consultancies entering the sector have been “wildly overestimated” by analysts and the press. The particular spat between WPP and Accenture took on a new dimension in mid-2019, with the agency group now refusing to share media data with Accenture for a media audit, suggesting it could use that intelligence to undercut WPP’s prices on pitches for lucrative advertising budgets.

Accenture Media Management

The criticism drew on a running theme in the professional services industry; that top auditing firms also doing consulting work for clients represents a conflict of interest, due to the need to emphasise the financial impact of their advisory work. While this has typically been directed toward the world’s largest auditing firms – especially the Big Four of PwC, Deloitte, EY and KPMG – the criticism of Accenture’s continuing auditing function for clients taking advantage of its growing creative profile seems to have stuck hard.

As a result, Accenture has announced that its media auditing arm – known as Accenture Media Management – will be shelved in the coming period. The small operation is thought to only have several dozen members of staff, but according to the firm, it is now discussing how to "redeploy them to other roles across Accenture," in a move many in the industry have been anticipating for some time.

While an Accenture spokesperson played down the idea of avoiding conflicts of interest – instead insisting that the decision to “ramp down the area of its business that performs media auditing, benchmarking and agency pitch services” was part of a “broader initiative to position Accenture in the most strategic, high-growth areas of the market” – rival firms have suggested otherwise. According to Sam Tomlinson, a Partner for marketing and media assurance with PwC, changing client demand with an emphasis on risk management likely drove the move.

Tomlinson told advertising news outlet Campaign, "I’m sure Accenture have kept their media auditing well segregated from Accenture Interactive but agencies have been vocally sceptical, so its exit is not a surprise. In any case, media auditing is fundamentally changing. In today’s media world, clients are increasingly looking for a new approach and a different standard of assurance professionalism, risk management and governance."

ID Comms is another competitor of Accenture Media Management, and its Chief Executive also told Campaign that he had been expecting Accenture to extract itself from the media auditing space “for a while.” David Indo explained that while he was “surprised” Accenture was not looking to sell the business rather than wind it down. According to Indo, Accenture Interactive’s shift into programmatic buying saw it become “a real conflict of interest,” making it impossible for the firm to continue doing media auditing and benchmarking while running agency pitches.

Accenture Interactive has over $10 billion of annual revenues, after buying agencies such as Droga5, and has been increasingly competing with the agencies that its media auditing business was auditing and benchmarking. As a result, it seems that the potential to manage many billions of dollars of programmatic media planning and buying far outweighs the value of Accenture Media Management – making the decision an easy one at face value.

Indo added, “This is Accenture Interactive making a statement to the market: ‘We’re ready. There’ll be no more concerns about inviting us onto pitches, there’ll be no conflict of interest, we’re going to go after your business on your territory.’”