Accenture's incursion in Programmatic: What could it mean for the media business?

Late May, Accenture Interactive made a move towards the media business by announcing the launch of their Programmatic Services practice, with the approach of helping clients develop their programmatic stack and skills through the following services:

• Programmatic In-housing and Consulting,
• Media strategy, planning and activation
• Ad Tech Implementation and support.

This caused an uproar in major agency holdings and trade groups such as the 4A's, as Accenture has been participant in many agency reviews as consultant as well as an auditor selected by clients to monitor the activity of partner agencies, bringing concerns on how transparent would the new unit be considering the massive amounts of data its parent company has acquired throughout the years. Accenture's response, in a word, was exposing that separate units are conducting the reviews and auditing vs programmatic services.

Moving from a conversation based in cost efficiency to one about value is long due.

Statements aside, it is important to understand the reasons behind this new paradigm:

It has been some time since the idea of Programmatic in-housing has been around, pretty much ever since Programmatic started being a word, about the same time Trading Desks started becoming an important part of the Digital Media planning and buying processes. The concept of automation and platform-based optimization is too interesting for a consultant not to jump in and for clients to not see an opportunity of in-housing, and there is no lack of studies to show that.

The major caveat to it has been the clients' ability to invest not only in talent dedicated to trading and platforms, but also to build a stack from a vast and ever-changing Ad tech landscape. Accenture's experience as a consultant allegedly comes in to play helping make the process more efficient, and quite obviously, also opens the opportunity for the business to be handled by the Accenture itself in the meantime or permanently.

Cost transparency is by far one of the most important factors for this to happen, as a significant % of the overall investment ends up in non-media costs: DSP fees, SSP fees, Ad Verification costs, data costs and the like, while the pressure to keep or improve cost based productivity YoY remains, the obvious outcome being less revenue for the publisher.

This new paradigm might be the key to revitalizing the industry.

Accenture seems to be capitalizing on this factor, but the key aspect here is understanding that moving from a conversation based in cost efficiency to one about value is long due. Programmatic as a way of buying media has not quite been embedded in the overall communication strategy for brands as much as it should have, including attributable value to media, communication and business results.

If we then jump on the risks of separating Programmatic from direct media buying we would see them being directly detrimental to efficiencies:

• From a media negotiation perspective, it is always more likely to push for higher discounts and added values when budgets from multiple clients are driving this negotiation, this will not only not be possible if clients handle programmatic budgets in-house, but also could determine lower benefits for the share that does stay in the agencies, causing a double inefficiency.
• If we bring it to people and resources, the costs of moving from a managed services model to a programmatic model comes with extra costs tied to talent which in return bring larger value in efficiencies, yet clients have been pushing to keep those structures as lean as possible. With this new paradigm, that cost of talent and training will take place directly in the company itself, with the aggregated need of keeping talent motivated when working for a single brand/group, having to work out ways of reducing turnover. Add in data analysis and clusterization, attribution, media landscape research, etc,
• Tech costs, stranded and variable, all in house as well: DSPs, Dashboards, etc

At this point, it is still too early to know what will come out of this, a couple of questions remain in the air:

• Will this new paradigm push clients to have a clearer vision of the value the agencies provide, including cost transparency?
• Will Accenture be forced to choose between their recent intervention in the media business and their consultancy role, based on the exposed conflict of interest?

One thing is for certain, and this is probably one of the more interesting topics about this whole thing. It is evident a more sistemic, process-based approach towards agency and media advertising business is about to take place. Consultants have the leverage in process-building, agencies have the leverage in understanding the business and relations keeping the industry going. This new paradigm might be the key to revitalizing the industry.

-

Cristian Figoli is an experienced Advertising professional, with an expertise in Latin America and US Hispanic markets working for Fortune 500 clients from a planning, strategy and operations perspective for over 7 years. Currently he is part of Dentsu Aegis Network as Managing Director of Amnet -programmatic services unit- in Argentina and Regional President for a global client of the group.

This disclaimer informs readers that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.