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Accenture Buys Ad-Agency Droga5, Making New Strides on Madison Avenue

Ad agency Droga5 recently helped create a commercial that showed a popular Bud Light ad mascot being mauled by a character from HBO’s “Game of Thrones.” Now much of Madison Avenue is  wondering if Droga5 might help its new owner conquer the advertising industry.

Accenture, the global business consultancy, will buy Droga5, one of Madison Avenue’s most buzzed-about “hot shops” in a move likely to stoke new concerns about the inroads large business advisories might make upon an industry that has thrived for decades under the rule of entrepreneurs. An Accenture spokesman did not respond immediately to an inquiry about the deal.

“Droga5 occupies the top echelon of brand agencies and is a great fit for us due to its world-class creativity, strategic rigor and brand experience capabilities. We’re beyond excited about the possibilities of what we can achieve together,” said Brian Whipple, global CEO of Accenture Interactive, in a statement. “We’re excited to work with David Droga and his team of brand strategists and creative minds to further our ambition to improve the full human experience with brands.” Droga founded the agency in 2006, and WME took a minority stake in the business in 2013.

Accenture’s Accenture Interactive unit has snatched up other advertising business in the past, including Fjord, a design firm,  and Acquity Group, a specialist in e-commerce. And it has purchased creative shops before, such as Karmarama and The Monkeys, all in a bid to build a business it values at $8.5 billion.  But it does so as more traditional operators of advertising services are grappling with seismic changes in the business.

The advent of digital technologies has taken Madison Avenue by storm. Once an industry where the main product was commercials made for big audiences whose primary media diet was linear TV programs, newspapers, magazines and radio, the ad sector has had to move quickly into new disciplines, such as social media, guerrilla advertising. consumer-data collection and analysis and mobile promotion, all the while trying to maintain the revenues it generates from more its more traditional businesses.

Now, the mainstay ad-agency operators – big holding companies with names like WPP and Omnicom Group, have been working to infuse their mainstay operations with more digital and data savvy. WPP, currently under its first new CEO since longtime chief Sir Martin Sorrell left in a disagreement with the company’s board of directors, has combined Y&R, one of its mainstay ad agencies, with digital specialist VML, and another longstanding ad firm, JWT, with Wunderman, which has worked for decades in direct-to-consumer marketing. Omnicom Group, meanwhile has recently named chief media officers at two of its biggest media-buying operations, PHD and OMD, who hail from the world of performance marketing.

Accenture will look to Droga to deliver work that helps it stand apart from rivals while helping advertisers boost results. ” Accenture Interactive is one of the most disruptive forces in the industry, and we have always been a safe space for audacious ideas,” said Droga in a statement. “I’m confident they are the best partner to grow our business and provide greater opportunities for our clients and our people. Why live off past glories when you can get busy trying to create new ones?”





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