Credit: Christian Harb via Unsplash
Global consultancy Accenture and advertising group WPP are not quite dating yet but are reportedly talking about potentials, about ways of working together, or perhaps a takeover.
However, Campaign said the nature of any potential M&A deal and the timing of the discussions are not known.
Accenture’s Song division, until recently led by Australian David Droga, is a $US19 billion business.
WPP, with revenue of about £14 billion, was once the world’s biggest advertising group until that position was taken by France’s Publicis Groupe, is currently now looking less expensive than it has for many years.
Its shares are down by about half and this month WPP issued a profit warning in the face of weak sales, client losses, a pull back on spend and a shrinking pitch runway.
The UK-based WPP now forecasts full year revenue further in the red, -3% to -5%, from a previous flat to -1% guidance.
WPP’s weakened position, including a new CEO starting soon, makes the company a possible takeover target.
The key to any deal would be media buying where WPP is making its biggest chunk of sales and Accenture is only getting started.
WPP Media, formerly GroupM, at last report, and despite cuts to client spend, makes up 40% of WPP's revenue.
At Cannes Lions this year, David Droga said Accenture Song wants a contemporary version of media. “As everything’s becoming more commodified… the thing that’s going to separate us is going to be that layer of creativity – what it does,” he said at a breakfast event
In Australia, Song poached three media account rainmakers -- Initiative’s Melissa Fein, Sam Geer and Chris Colter -- to start a new media unit. Their first big win was the Optus account in combination with winning the creative work.
The trio have created what they believe to be the "most ambitious media proposition in the world".
At the core, the media offering has several proprietary tools including media trading, has ambitious acquisition plans and will avoid principal media buying.
Any WPP-Accenture tie up would create a business in a better position to compete against the new entity to be created by the Omnicom takeover of IPG, expected to close later this year.
That marriage of rivals brings together the third biggest advertising group, Omnicom, with the fourth, IPG, to form a company with 100,000 people and revenue of $25.6 billion (net revenue of $20 billion), with 57% of that in the US.
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