Covario clients Accenture and P&G quietly launch important digital marketing initiative

Last week, amid the major announcements of Adobe buying Omniture and Google launching Doubleclick Exchange 2.0, a third and very important announcement occurred that most people missed:  Covario clients Accenture and P&G announced a new practice called Accenture Interactive, with P&G lauded as the first anchor client. Accenture Interactive is “a new business that Accenture has established to help companies develop world-class digital marketing capabilities and optimize online/offline investments.

Accenture Interactive will bring together advanced technology platforms with consulting, analytics, Web development and digital managed services capabilities in an integrated model.”

Why is the Accenture Interactive announcement important?

It’s important because:

• Procter & Gamble, the world’s largest marketer, has decided to work with Accenture, the world’s largest technology outsourcer, to do all their web design and management- instead of using a global creative or digital agency.

• Accenture’s entry into the mostly agency-controlled, high-margin web design and development business brings a level of process efficiency, low-cost global resourcing, and cost effectiveness that will prove compelling to enterprise-scale customers.  Unlike most interactive agencies, however, the Accenture Intelligent Digital Platform offering includes the technical infrastructure (hardware, software, support) and the design and development services needed to create a fully outsourced web marketing operation.

• As Accenture markets this capability and gains customers, they will put significant pressure on digital agencies that are late transitioning to low-cost geographies for their development services.

• Expect Accenture to sign preferred agreements with leading web-related software vendors including CMS (content management system) vendors, Web Analytics vendors, and hosting/streaming media providers as part of their Accenture Intelligent Digital Platform.

• This announcement marks the actual fulfillment of the Howard Draft prophecy made almost three years ago at the 4A’s conference.  Howard Draft, the executive chairman of DraftFCB, which is one of the big agencies inside the Interpublic Group (IPG) warned his traditional agency peers:  “If we cannot calculate our return on investment, don’t worry- someone else will.  We know the McKinsey’s and the Accenture’s of the world are standing in the wings.  They’re ready to help their CMOs manage their unwieldy agency rosters, clean their data and measure their return on their marketing dollars.”

Actionable Insight 1: Demand lower costs from your agencies.  All of your agencies, should be leveraging low cost resources wherever possible to provide the best possible pricing without sacrificing quality.  This was done in the IT arena after the 2000/2001 tech bubble and should now be a standard offering by agencies.  Expect 20% or more cost savings on website development and production costs.  If Accenture can execute offshore web development, why can’t they?

Actionable Insight 2: Demand transparency from your agencies.  All of your agencies, but especially your digital ones, should be providing clean, granular data on a near real-time basis across all of your marketing campaigns – with actionable insights to boot.  It’s still surprising to us at Covario to see how many marketers settle for multi-week or even one month lags in reporting on search, display or other media types.  This transparency will help you measure and manage even the creative parts of your business.  More importantly, it will drive better optimization as poor performance can be identified and addressed readily.

Actionable Insight 3: Demand accountability from your agencies.  There’s been more news recently of P&G, Coca-Cola and others moving to a pay-for-performance model to better align incentives and increase accountability.  Covario fully supports those types of models and has implemented them with several clients.  In order to make that happen, though, your agency must first deliver transparency as discussed in Actionable Insight 2.

Actionable Insight 4: Look beyond your digital agency.  For larger corporate web strategy development projects, consider players other than your digital agency; Accenture now has its Accenture Interactive practice and Deloitte has a Marketing Sciences Group, among others.  With Accenture leading the charge as a new model for the accountable agency, one should definitely consider them and other global consulting firms with a digital marketing, web development and analytics practice in any potential digital strategy and infrastructure project.

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