Industry reaction: Accenture media move a major 'conflict of interest'

24 May 2018
Mark Ritson

Industry leaders are concerned that Accenture’s move into media buying presents a conflict of interest when paired with the media auditing and advisory services they already provide to the market.

Accenture Interactive, the consultancies digital arm, announced on Thursday it would be offer planning, strategy, buying, management of programmatic ad campaigns and ad tech support, as well as help clients move their programmatic in-house – a service it has offered for some time.

AdNews approached Peter Horgan, Mark Ritson, Virginia Hyland and Darren Woolley, four of the leading thinkers in advertising - as well as others - for their views on Accenture’s move into programmatic buying.

The common thread among the group is that Accenture could struggle to convince the market that it can avoid a conflict of interest when providing clients with advice on their media effectiveness and bottom of the funnel execution.

TrinityP3 founder and global CEO Darren Woolley understands more about media buying business models than most. His firm runs media pitch process and helps advise clients on how effective their media strategies are.

Woolley told AdNews that many media agencies have tried to go back to a commission-based model because it is something that they feel comfortable with, even “if the amount of work it takes is not related to the amount that is being spent”.

The major concern that Woolley has is how Accenture avoids a conflict of interest.

“They’re around telling people what their existing media arrangements are like from a financial point of view,” Woolley said.

“If they are benchmarking or advising on media, don’t they have a conflict of interest because they will be putting people into their own (buying) services.

“How do you separate those two? No matter how many ‘paper walls’ you put up, there is always going to be a business imperative to be putting as much opportunity through your own business and maximising revenue and profit.”

Accenture Interactive provides consultancy services that advises clients on where they should place their media investment.

Peter HorganPeter Horgan

AdNews understands that Accenture is auditing the media spend of major companies in Australia, which includes running the rule over programmatic trading, tech fees and other services. This is not the same as a financial audit of a business, but still requires a level of independence.

One senior media buyer, who wanted to remain anonymous, told AdNews: “it would be a fantastic enabler if you were competing in a pitch against a media agency to win programmatic”.

“They’re not just a digital or supplier service, they are providing strategic advice on the way they set up their marketing arrangements, how they structure their marketing function – they’re all over it from a consultancy point of view as well,” Woolley said, adding that it is reasonable for a large global consultancy like Accenture to be tempted to execute on media strategy.

“Controlling more of a company’s spend gives you more influence over that company.”

Woolley’s concerns are mirrored by media agency leaders speaking to AdNews.

Omnicom Media Group CEO Peter Horgan tells AdNews the move by Accenture into media buying represents the “slightly insidious nature of consultancy cross-selling”.

When asked if there is a conflict of interest in Accenture’s move into programmatic interest, Horgan was blunt.

“There is a fundamental conflict of interest. They need to decide whether they are in the execution business or the auditing business. There’s a governance issue with marking your own homework that hopefully their clients should be sensitive too.”

Omnicom Media Group chief investment officer Kristiaan Kroon points out that Accenture have just signed a deal to provide the video platform for media broadcasting network Turner.

“So, essentially, they are the auditor and their buy and sell side, which is even more conflicted,” Kroon said.

Horgan, who is also the chair of the Media Federation of Australia, added: “Trying to be all things to all people is where you quite quickly run into trouble.

“The other I would point out, is while we think they have had the capability for execution for some time, this gives them bottom of funnel capability versus the tech they might have implemented for clients.

“What we’ve found is where clients divorce top of funnel execution – mainly through broadcast media – from bottom of funnel online execution, the rusts are sub-optimal.

You lose all of your cross-channel attribution and all of the live optimisation that happens by executing through the line and entities that have pursue that have come unstuck.”

When AdNews asked Horgan how charging by the hour for media buying would work in reality, he responded: “We know they are good at charging so clients will need to get ready for that”.

However, he added that OMG agencies charge clients labour costs on a full-time equivalent basis, which is essentially a similar model.

“One of their big pitches is that they will be more transparent and agencies have eroded trust with their behaviour in the programmatic space,” he said. “But agencies like us have an absolute platform of transparency throughout the whole digital supply chain – from tech through to execution and charging.

“All you are getting from them is bottom funnel capabilities without any cross-channel understanding.”

 C-Suite buy-in

The advantages Accenture will have over traditional media agencies is that they can exert influence on the board and through the C-Suite, rather than the CMO.

While they might gain buy-in from the C-Suite, the perception that they will be more transparent than traditional media agencies may not work out in reality.

“While their remuneration model is going to be based on hours, hours are not necessarily transparent and, as well all know, the whole supply chain has a lack of transparency. It’s not just about the agencies, it’s all the ad tech intermediaries along the way,” Woolley added.

“While they may say this is a way of giving you more transparency, that is not necessarily the case unless they come up with a way of cleaning up the whole digital supply chain.”

Hyland Communications founder Virginia Hyland understands the reasons why Accenture Interactive is entering the programmatic trading space – she launched a specialist consultancy that advises clients on how to manage programmatic media buying.

While welcoming Accenture’s move into this space, she also has concerns about its independence.

“My main concern is that Accenture will then on-sell other Accenture products once they are in the four walls of the client’s business which may not be the best interest of the marketer as new products enter the market at speed,” Hyland tells AdNews.

ADNEWSMM2017-0062-DSC_3692-HIGHRES.jpg Hyland founder Virginia HylandVirginia Hyland

“Clients do need to understand the implications of allowing another company to come into the four walls of their business and how they will control their data and infrastructure when they are not independent in their ability to develop the best market solution.

“This can leave the marketer in a weaker position versus their own competitors in market. It is important for business to seek agnostic and independent advice. Advice that is not skewed towards selling specific products because they are offered by one company.”

Kaimera founder Nick Behr is another who is concerned about a conflict of interest.

"My first thoughts is 'marking your own homework' given their consultancy and auditing stance, so definitely a conflict of interest in some areas but agency groups have managed client conflict for years so I don’t see a problem for them in navigating this," he said.

"At Kaimera, we are an independent media agency who often talks about transparency, I would like to think Accenture will help drive this within the industry, not just talk about it but actually do it." 

Melbourne Business School adjunct professor Mark Ritson, one of the most respected commentators in the industry, told AdNews that Accenture’s move into media buying is not unexpected and – if they are able to pull it off – presents a genuine threat to media agencies.

“For many months, there has been a big debate about why the big audit and consulting firms like Accenture, Deloitte and PwC are moving so fast and so deep into marketing. Well now we are starting to see the game plan,” Ritson said.

“The big advertising spenders of Australia, the 20% of companies that spend 80% of the advertising dollars, are the only clients that these big consulting firms deal with. As more and more clients move their digital media capabilities in-house, the big consulting firms are hoping to offer them the systems and services to enable them to do this and the auditing on top that will reassure the C-Suite that millions are not being misspent or badly invested.”

But can Accenture pull it off?

Ritson isn’t so sure, but says their move into media buying should not be dismissed.

“Most advertising people quickly dismiss the consulting firms because of lack of creativity and experience in advertising planning, but they miss the point,” he explained.

“These services never paid the bills, its media money that represents the big earner and if, and it is 'if', these big firms can make this work they are a genuine threat to the existing advertising ecosystem.”


Accenture has issued a statement in response to media bosses:

"Our media management business is run independently and is not part of our marketing services business (Accenture Interactive) in Accenture. It is part of the Accenture operations procurement business as their offerings are aligned to the procurement client buyer profile and procurement business characteristics," an Accenture spokesperson says.

"Media audits are conducted by a dedicated team within Accenture operations procurement and confidential data/non-disclosure protections, firewalls and policies are in place to ensure that information is not shared across other parts of the Accenture business."

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