Month: January 2022

Droga, a newer addition to Accenture after the consultancy acquired Droga5 in a surprise deal in 2019, wasn’t the obvious choice. However, by naming Droga, Sweet seemed to be signalling to the ad industry that she wants Accenture Interactive to be seen as a true creative player. And Droga, just a few months into the role, is starting to make moves to turn that into a reality, according to industry observers. 

“David takes over and one of the first things he does is he brings back Neil Heymann as global chief creative officer of Accenture Interactive,” said Avi Dan, founder of Avidan Strategies. Droga appointed Heymann to the newly created position last month; Heymann had worked for Droga for over a decade before moving to Publicis Groupe. “David is going to take what’s good with Accenture, which is data, consulting and strategy, but wrap around it a high level of creativity. That’s the meaning of Neil coming back. I wouldn’t be surprised if David pushed it more in that direction.” 

Finding a way to position Accenture Interactive as a creative leader makes sense, but it’s also an uphill climb. Just a few years ago, the consultancy had boasted that it could potentially replace agencies. At the time, fear of consultancies at large doing just that had the ad world abuzz — but that hasn’t come to fruition. As previously reported by Digiday, advertisers awarded some $15 billion in media billings this year and consultancies weren’t among the big winners. Overall, consultancies have “struggled to pitch themselves as creative resources,” said Ann Billock, partner at search consultancy Ark Advisors. 

To wit: this past August, White Claw tapped VCCP to take over its creative account from Accenture Interactive’s Rothco agency. Rothco had run the account since 2016. In September, Accenture Interactive was reportedly eliminated from Coca-Cola’s massive agency review. Putting Droga in charge could help “turn Accenture Interactive into a creative powerhouse,” said Dan. “He knows what clients want.” 

That’s not to say that Accenture Interactive is struggling by any means. Quite the contrary: Over the course of the last fiscal year, Accenture Interactive grew revenue by 15% to become a $12.5 billion business. The company also won new accounts including L’Oréal Middle East and Jaguar Land Rover. And Accenture Interactive-owned Droga5 also won new accounts, including Petco and Molson Coors, over the course of 2021. 

But industry analysts say that Accenture Interactive hasn’t carved out the creative identity to make the waves it had boasted it would in advertising. 

“The Droga agency is still winning a lot of business, but it’s always being ascribed to Droga5 rather than Accenture,” said Billock. “Accenture doesn’t seem to be realizing the benefits of Droga because the Droga identity is so strong, and that’s how the press covers them.” 

Getting the industry to see a behemoth like Accenture Interactive as a creative entity will take time. Much of Accenture Interactive’s work doesn’t fit squarely into the usual agency buckets of creative, media and digital. Often Accenture Interactive’s clients are seeking out the company for product innovation and marketing transformation as well as sales and commerce transformation. Finding a way to communicate that that work is creative in nature too will be key to getting the industry to see Accenture Interactive as a true creative player. It’s a tall order, especially as the ad industry will likely point to Droga himself as a bellwether for creative leaders. 

“There’s a lot of responsibility that comes into this new role as a creative person,” said Droga. “I feel like I want to prove that the world at large needs more creative leaders. I really believe it does, which is one of the reasons I absolutely said yes to the challenge.” 

Even as Droga recognizes the challenge and the impact of his ascension for both the industry and Accenture, he says he’s doing so with the same mindset he’s always had. “I’m the same person,” said Droga, adding that he’s not going to start conforming and wearing suits (though he does wear blazers). “I haven’t changed my belief system, aspirations or ambitions. But certainly the size of the steering wheel and the levers are much, much bigger.” 

How much bigger isn’t entirely clear. Accenture declined to disclose employee figures for Accenture Interactive and noted that they have more employees than can be found on LinkedIn. Per LinkedIn data, Accenture Interactive has roughly 5,850 employees to Droga5’s just over 700.  Accenture didn’t comment on Droga5’s employee numbers per LinkedIn either. 

David Rubin, chief marketing officer for The New York Times, said he’s worked with Droga throughout multiple corporate structures, Droga5, WME and now Accenture, without feeling a shift in the working relationship. 

“All businesses’ relationships with customers are emotional,” said Rubin. “We tend to forget about that because we can’t measure it. The reason we worked with Droga5 is that we never forget that fact. People make choices for emotional reasons. Droga helped us make sure we’re tapping into those emotional reasons.” 

Droga’s reputation for seeing beyond an ad campaign will likely help him amid the transition from working with clients as Droga5 to working with clients on behalf of Accenture Interactive and its many capabilities. “More so than many in the industry, David has always been able to prove his seat at the table with the clients because he doesn’t look at the answers being an ad,” said Nancy Hill, founder of Media Sherpas and former 4As president. “Consultancies don’t ever start with an ad.” 

The long-term impact of Droga taking over Accenture Interactive and what that means for the ongoing agencies-versus-consultancies debate in the industry is unclear. While industry observers recognize the possibilities of Droga evolving Accenture Interactive into a more creatively-led business, some believe it will be challenging for him to get clients to see it that way. 

“[Accenture Interactive is] a small part of Accenture,” said Billock, adding that even as there’s movement to change the way Accenture Interactive is seen, “Accenture is going to be looked at as this consulting behemoth.” 

For his part, Droga said he believes the distinction between a creative agency leader versus a consultancy leader isn’t something that advertisers care much about. “Clients don’t look at the distinction of where [an idea] comes from thinking, ‘Oh, I need a creative agency’ or ‘I need a consultancy,’” he said. “They just want the people who are going to deliver for them.” 

Digiday surveyed 120 publisher professionals with knowledge of their company’s financial health and questioned them about a number of different topics, including how 2021 went for their respective organizations and what they expect for 2022.

The 120-person sample represents organizations of many different sizes, including statistically significant numbers of people who work at large, medium-sized and small publishers; in this case, Digiday defines those with annual revenues over $50 million a year as large, those with annual revenues between $10 million and $50 million as medium-sized, and up to $10 million as small.

Three-quarters of the survey’s respondents said that their organization’s revenues went up in 2021 compared to 2020, and for more than half, the increase was in the double digits. More than a quarter of respondents said their organization’s revenues increased more than 25%.

That same sample has an optimistic outlook about 2022. More than 80% of respondents expect revenue to increase in the new year, and more than one-fifth expect revenue to increase by more than 25%.

Anecdotally, this optimism prevails even among those that didn’t have a great 2021; over 40% of the two dozen respondents who said their revenues were either flat or declined year over year in 2021 said they expect their revenue to grow by double digits in 2022.

This optimism largely reflects the rosy forecasts put out by researchers including GroupM’s Brian Wieser, who upped his growth projections for 2022 in a report published in December. Wieser projected a 39% growth in digital ad spending, but also projected robust growth in traditional channels such as television, thanks in part to political ad spending driven by the coming midterm elections.

In its tenth year of being in business and after a string of publisher purchases — which have included The Players’ Tribune and FanSided — Minute Media made its first tech-centric acquisition in 2021 with the pickup of publishing tech platform Wazimo in November. The acquisition reflects how tech is becoming a bigger component of Minute Media’s overall business and how its B2B tech revenue is becoming interwoven with its advertising revenue

“The B2B side of our business, it’ll end up [in 2021 having accounted for] 60-ish percent of our revenue. It’s a big part of that business. We’re as much of a tech company as we are a publishing business,” Minute Media president Rich Routman said in the latest episode of the Digiday Podcast.

The lines between Minute Media’s tech and publishing businesses are even blurrier than that. That percentage of overall revenue represented by B2B actually includes advertising revenue. While Minute Media does some deals in which it licenses its technology to companies for a fee, it also structures deals to include an advertising revenue-share component, which can also result in Minute Media selling ads for its tech clients.

“As we become more flexible in our business model, the B2B revenues have grown significantly on the back of being B2B deals on a rev-share basis supported by advertising or B2B revenues on a license-fee basis. But the B2B business as a whole is larger than the [owned-and-operated] brands,” Routman said.

Here are a few highlights from the conversation, which have been edited for length and clarity.

Build vs. buy

When it comes to technology, we’ve been in build mode. We felt like, with the team we have and the expertise we had in house, there wasn’t really anything we were focused on that we couldn’t build. And as we started working more closely with Wazimo — and obviously it’s really important for every publisher to get their heads and arms around first-party data — it could be a great bolt-on to Voltex. The development pipeline around something like that, it’s not two months, because otherwise we would have built it ourselves. It was going to take us a long time to catch up.

Margin vs. profitability

At this stage of the business, we’re more interested in margin than profitability because we’re not done making acquisitions. Anytime you acquire a business, it’s not just acquiring the business and its profitability; it’s how much you’re going to invest into that business, once you acquire them, to get them from point A to point D. If you buy a business solely on the basis of its profitability today, it’s probably not going to be that profitable tomorrow. We’re not a private equity firm.

Breaking even

Break-even is really where we’re focused on being right now. The days of investing millions of dollars to grow the business every year and shredding that capital are kind of behind us at this point. It’s more about how we choose to deploy the capital. We’re deploying it through M&A. We’re deploying it in technology. And we’re deploying it through beefing up our teams.

An operating margin mindset

I’m really interested in understanding the operating margin of each of our individual assets. How does FanSided look on an operating margin basis? Because it has a lot of shared resources. It has finance and HR that come from central. So yes, we can look at overarching profitability, but because we’re in a number of different areas, you want to look at is this tactic or this asset or this technology performing well on an operating margin basis? Are the people that are charged with it doing the smart things for the business in order to make it profitable today or in the future?

Below is a running list of media companies’ sustainability pledges and initiatives. One thing to note: Some companies use the term “net zero” while others opt for “carbon neutral.” These are similar concepts; the goal is to balance out a company’s greenhouse or carbon emissions by reducing an equal amount of emissions.

BBC

BBC wants to be net zero by 2030. Part of the process means transitioning to green energy with a focus on energy reduction, efficiency and electrification/hydrogen. Targets were approved by the Science Based Targets initiative, an independent, global organization that assesses corporate plans to reduce emissions. By 2030, BBC wants to reduce its emissions in its direct operations by 46%.

Bloomberg

Bloomberg Media is a division of Bloomberg L.P., which has committed to net zero carbon emissions by 2025. It wants to transition to 100% renewable energy by that year, according to its 2020 Impact Report. 50% of Bloomberg’s energy currently comes from renewable sources.

Condé Nast

The publisher wants to be carbon neutral by 2030. As of September 2021, its offices in London, Germany, Italy and Spain have transitioned to 100% renewable energy. Pilia, who oversees sustainability efforts across the company, said the cost difference in moving to renewable energy was “negligible.”

The Economist 

The Economist has set a goal to cut carbon emissions by at least 25% by 2025, a plan approved by the Science Based Target initiative. The nonprofit works with over 2,000 businesses around the world to develop and verify a business plan to reduce greenhouse gas emissions.

Gannett

Gannett will share more information around the company’s sustainability goals in 2022, according to a spokesperson.

Hearst

Hearst Tower, Hearst’s headquarters in New York City, is a “green” commercial building with a Platinum LEED Rating, a points-based certification system created by the U.S. Green Building Council for construction projects. There are four LEED certification levels, with Platinum being the best, and the levels are based on categories like energy and water efficiency, ventilation, location, materials and resources. Icefall, a three-story waterfall in the building’s atrium and lobby, circulates recycled rainwater collected from the roof, saving 1.7 million gallons of water annually that serves to cool and humidify the space and saves power.

The New York Times

The New York Times Company is reviewing its environmental impact and sustainability-related initiatives. No timeline has been set yet for when that review will be complete, a Times spokesperson said.

“Until the WHO officially declares an end to this pandemic, planning for a return to in-person anything (industry events, offices, etc.) will continue to be a gamble,” said Lucas Piazza, CMO of video production shop Quickframe. “For the time being, the safest approach remains hybrid experiences and smaller industry gatherings in more isolated venues where attendee lists are limited and vaccination and testing requirements are more easily enforced.”

Piazza continued: “Unfortunately, we cannot change our current reality, so companies must continue to plan accordingly and not let the pandemic hinder the industry’s progress and growth.”

Ahead of this week’s CES, major marketers like Microsoft, Google, Meta, T-Mobile, AT&T, Twitter, Amazon, TikTok, Pinterest and GM have reportedly backed out of attending the conference in person. All which complicate the annual event’s path to normalcy — even as it looked pre-Omicron. Attendees of CES will have to wear masks and be vaccinated; there will also be rapid test kits available. As a safety measure, CES will end a day early due to Omicron.

“The most interesting dynamic that all of us are watching is how governments, cities, and event organizers will react to this in the coming months,” said Jon Dupuis, CEO of dentsu Creative, Americas when asked about the future of in-person events. “We’re seeing this dynamic unfold currently with CES, as major companies decide not to attend in person due to the surge in Omicron cases, yet plans for an in-person event are proceeding following local guidelines.”

Dupuis added: “The more varied the decisions and behaviors, the more difficult it is to find some version of a newer, new normal.”

The new normal — a term that seemed to be overused in 2020 but already has life in 2022 — is still undefined as marketers and agency execs continue to adapt with the pandemic. Some believe that a return to the normal prior to the pandemic may not be coming.

“Either in the case of our industry returning to events or in that of ‘return to office’, I don’t think we’re going back to the way things were entirely,” said Deutsch LA’S CEO, Kim Getty. “If we want to be successful, we need to meet clients, talent, and partners where they are. This will mean having a flexible approach that bridges physical and remote experiences. What was once considered a successful experience will need to be redefined.”

3 Questions With Brooks Running CMO Melanie Allen

How has Brooks’ approach to DE&I changed both internally and through marketing efforts?

Brooks had been steadily increasing our focus on [diversity, equity and inclusion] over the last few years, but in 2020 we spoke out publicly against racism and in support of a world where we all run on equal ground for the first time. This was a galvanizing moment for us. We put a laser focus on how our marketing across the board, from images and stories to our ambassadors to our partners, has the power to make running more inclusive for everyone.

Most recently, as part of our larger mission to make running more inclusive, we partnered with Camp4 Collective and directors Tim Kemple and Faith Briggs to launch “Who Is A Runner,” a video series that explores and amplifies the stories of a diverse array of groups and individuals who use running as an outlet to educate others and build community. The goal is that the series will spark a discussion and become a tool for lasting change in the running world, as we look to make the sport more inclusive so that everyone can run on equal ground. We believe one of the first steps to real change is to engage with people who run and understand their stories.

Why does it matter?

We believe running is a source of positivity that can change people’s lives — and even create social change. So when we use our brand voice and our channels to create a more welcoming, diverse running community, we can help more people tap into that positivity.

As we look ahead this year, how should brands be thinking about DE&I?

At Brooks as we look ahead to 2022 and beyond, DE&I will continue to be an ongoing commitment and we will keep pursuing our long-term goals for the diversity of our team, our partners and the running community. — Kimeko McCoy

By the numbers

Plans to return to the office have waxed and waned throughout the pandemic. As Omicron cases surge, those plans are once again in flux as many companies backtrack to curb Covid-19 transmission. According to a new poll from Ipsos-World Economic Forum, a market research and consulting firm, most workers support vaccine and mask mandates. Although a return to the pre-pandemic workplace is unlikely, poll respondents report protections would make for an easier transition. Find more key points below:

• 78% of employed adults agree they and people in their workplace should be fully vaccinated against Covid-19.
• 74% of respondents polled in favor of staff undergoing frequent testing if they are not vaccinated.
• Meanwhile, 81% of those surveyed agreed with requirements to wear a mask in common areas when in proximity with other people. — Kimeko McCoy

Quote of the week

“We could easily sell products, and that’s something we are testing. You can imagine that, further down the line, we will have formats that are more like experiences, and the ability to sell products that could even be NFTs within the game.”

— Samuel Huber, CEO, Admix, an in-game advertising infrastructure company that serves publishers and advertisers, told gaming reporter Alexander Lee for a piece on the history of in-game advertising.

What we’ve covered

• Predictions of what would come in 2021 versus the reality.
• As part of Digiday’s new Masters of Uncertainty package, a profile of Meta’s Vivek Sharma.
• How publishers experimented with NFTs in 2021.