Why the Droga5 acquisition is a good thing for advertising

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Consultancies have been creeping into agency turf for years now. But even in light of Accenture Interactive’s purchase this week of award-winning creative agency Droga5, the idea that they'll will wipe out ad agencies altogether has been overplayed. And what’s disproving that all-too-common narrative of recent months is the increasing success of smaller shops. In 2019, the ad business centers on offering a mix of data and creativity, and small and nimble agencies seem to do it best at—a lower cost.

Rising agency players like Giant Spoon, gyro, Heat, Oberland, and Phenomenon are leaving their marks on the industry by combining speed, data, creativity, digital products (apps) and marketing optimization. Rest assured that Accenture Interactive and Droga5 will do their level best to provide a similar combination of services as soon as possible, and they will likely succeed.

One of the bigger, obvious benefits of smaller shops is the efficiency that comes with having the entire team under one roof. The fact that people show up at meetings and actually know each other creates an irreplaceable sense of camaraderie among creatives, data scientists, product developers and measurement specialists.

Having each important service in one place allows smaller shops to tell cohesive stories and win notable accounts. This advantage is how five-year-old Giant Spoon, with less than 200 employees, has already garnered notable clients, including HBO, Uber and HP. It’s also why Dentsu Aegis bought gyro in 2016. Gyro, previously known as a B-to-B specialty shop, has nabbed consumer clients, such as American Express and Fuji Film in recent years.

Accenture’s acquisition of Droga5, which made $200 million in 2017, shows the opportunity for smaller, more nimble agencies rather than signaling the end.
Read more at Ad Age

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