When Accenture acquired Karmarama nearly a year ago, it was big news: management consultancy tanks were parked on AdLand’s lawn.
A year on, and advertising has had it rough. From WPP to Publicis groupe, the big ad networks have battled disappointing revenues, the finger of blame pointed in all directions – from Brexit to Google.
But not for Karmarama, says chairman Jon Wilkins. In fact, despite the adjustment of giving away some independence, it’s all going quite swimmingly.
“The business is growing dramatically, we’ve grown about 30 per cent in a sector that is moribund and flat, if not in decline,” he says, chirpily.
Much of the growth has come with standing under the Accenture umbrella, sheltered from the storm battering other firms. It’s dry under there. Accenture works with a sizeable chunk of the world’s biggest brands, giving Karmarama almost unlimited scope.
“They said if you don’t want to competitively pitch ever again, you don’t need to. They said, ‘we have all these doors open: you obviously need to pitch them ideas, but you don’t need to competitively pitch’. So a vast majority of our growth has come from non-competitive pitching to their existing clients, off a foundation of work where they’re already deeply embedded.”
This may vindicate some of the many sceptics who forewarned of losing control. But Wilkins says that it’s allowed the firm to be far more discerning in what they pitch for. Instead of being in a perpetual cycle of expensive pitching, they pick the most appealing work, and save a fortune not chasing dead leads.
“If someone said, ‘do you want to work with top 100 companies in the UK and the top 500 in the world?’, you’d say ‘yeah we do’. And the fact they represent 75 per cent of them, well, there’s clearly synergy.”
Wilkins admits that at a management level, there has been major changes, but that was to be expected. For most of his staff, the acquisition has brought nothing but new opportunities. They decided to stay at the quirky Farringdon den, surrounded by colourful plastic deer and alpacas, rather than moving to grey Fenchurch Street. Protecting their company culture – which he describes as “all we have” – was always a priority.
“We’re very hermetically sealed, so we didn’t physically move. The day-to-day employees have relatively minimal interaction with the big machine – let’s not forget Accenture is 450,000 people. They’re very aware that the culture is all we’ve got. So if anything, they’re almost scared of our culture. If we say there’s a problem, they’ll sort of back off. That isn’t an issue.”
Another criticism often levelled at the acquisition is that creative and systemic thinking is incoherent. This apparent dissonance between “left and right brain thinking” is nonsense though, says Wilkins. They have to work together in the modern marketing climate. “If they don’t, then agencies are going to become bit players, and fairly peripheral to growing the client’s business. Trying to bring the best of data systems and mathematics with creativity and strategy – I’m not saying that’s easy, but I do say that’s what we have to strive towards.”
The spate of acquisitions by firms outside of the industry isn’t the threat the naysayers make it out to be, he says. There are far more pressing things that should be keeping them up at night, he says.
“You’ve got clients spending less, you’ve got issues around trust and transparency, you’ve got the fragmentation of channels. There’s so much going on, I would say probably this is a distant threat If it was me, I’d be thinking: ‘they might come and steamroller us, but we can’t focus on that – we’ve got our own challenges’.”
One of the best outcomes of the acquisition so far has been the opportunity to internationalise Karmarama’s client base. Big networks have bodies in every market and existing client relationships – something an independent does not. The global nature of Accenture provides puts the world in Wilkin’s hands:
“Budgets aren’t going up, but we’re being asked to produce more content. And the interesting thing with Accenture is that they can produce thousands upon thousands of high quality pieces of content in places like Mumbai at a hundredth of the cost of an ad network. They’ve got a lot of advantages built into their model already.”
The move to management consultancy seems to have paid off so far, although it’s early days. Wilkins says that actually, it’s nice to be back in a winning team.
“There is a feeling that, no disrespect to the networks, but if we had gone in and become part of a network, knowing how they’re faring, with a lot of downward pressure, budget cuts, and challenges they’re facing – it’s quite nice to be riding something going the other way.
“It doesn’t mean it’s any easier, but the journey has just begun. One year has gone ridiculously fast. I don’t think we’ve even started to really capitalise on the potential, and I think our offer in some ways is ahead of some clients’ ability to purchase. Next year will be even more exciting.
“Definitely no regrets.”Let's