IPG’s Michael Roth makes timely U-turn on threat of management consultancies, saying he’s open to partnerships
Interpublic Group (IPG) boss Michael Roth has seemingly back-peddled on how much of a threat he perceives management consultancies to be, saying in a few years the holding company could “partner” with one.
IPG's Michael Roth
Last month, at the 4A’s Transformation Conference, Roth suggested that the likes of Accenture are trying to get into advertising "because their own business isn't doing particularly well." Accenture has acquired a raft of digital, creative and analytics agencies in recent years under its 'Interactive' division while Deloitte, IBM and Capgemini have been slowly building out their advertising capabilities.
On a conference call with analysts today (21 April) to discuss its first quarter results, around half of the questions posed referenced the threat of the consultancies. Roth maintained that its 'Open Architecture' offering is more compelling for clients, but suggested that “five years from now” IPG “might partner with one of them.”
His apparent U-turn comes after Accenture this week moved its global media planning and buying business out of MEC and into IPG’s UM.
“We’ve not seen [the management consultancies winning business] in a big way, maybe a bit on digital,” he said, but later added that “we do see them as competitors”.
“Five years from now we might partner but we do bring the creative firepower. What we offer [clients] is innovative thinking and being able to reach across all agencies at IPG. That, coupled with media side, is something these other providers don’t have. The integration on media and creative talent is what clients are looking for,” Roth explained.
“They are buying agencies. We do see them as competitors in the space but at this stage they don’t have the capabilities of an integrated offering. And maybe it’s better if we partner with them rather than directly competing because we do have the expertise that they don’t have yet. Why buy it when you can rent it? I throw that out as a potential. We compete, and so far we do well.”
However, Roth added that IPG has been beefing up its own consultancy offering, calling out the transformation projects that R/GA has been working on as an example of how it's moving into the space dominated by Accenture, Deloitte and others.
However, the chief executive also seemed to speculate that Accenture’s involvement in the ‘Open A.P Alliance’ – a partnership between Viacom, 21st Century Fox’s Fox Networks Group and Time Warner’s Turner – could prove problematic if it’s to continue to build out its advertising arm.
The media companies earlier this year joined forces to launch a new platform that promises advertisers a standard data sets for better targeting of their advertising.
That platform will be operated and monitored by Accenture, prompting Roth to speculate: “If they are advising publishers and selling of space it’s hard to be on the other side.”
Elsewhere, Roth appeared to be unconcerned by reports this week that Google might create a version of its popular Chrome browser with a built-in adblocker with a view to preventing intrusive advertising, like pop-ups.
“Someone ultimately has to pay for all this stuff. I know the marketplace likes to see everything for nothing but in the end advertisers are going to spend money and they want to see the effectiveness,” said Roth.
“The burden is on [IPG] to be creative and innovative in storytelling and embedded content, different ways of reaching the consumers. The pop-up ad? Yeah, you better see that blocked because it gets to be annoying. We’re much more advanced than that in our business right now.”
IPG reported revenues of $1.75bn (£1.37bn) in the first three months of the year, up 0.7% year on year, while organic revenue was up 2.7% compared with the first quarter of 2016. Roth claimed to be on track to deliver on its full-year organic revenue target of 3% to 4%.