David & Goliath: can Droga5’s culture survive the Accenture Interactive takeover?
On the surface, Accenture Interactive's Droga5 buy-out appears to be a mismatched case of calculators meets crayons. But is their alliance all that unlikely? And if so, can they make it work?
“Bye-bye, Droga culture.”
“Everyone’s ‘fiercely independent’ until money is on the table.”
“I feel like my childhood crush just married that guy with the ‘great personality’.”
So came the responses when king of the New York indie scene, David Droga, confirmed he was selling to Accenture Interactive in what the management consultancy is dubbing its biggest agency acquisition to date.
Rumors of the deal had swirled for months and negotiations lasted a year. Yet ad land’s reaction was largely one of shock – at least in North America, where Accenture’s buy-outs have been contained to the programmatic space.
The fact that Accenture Interactive, a subsidiary still defined by its corporate consultancy roots, was to buy a young shop so full of culture and autonomy was significant enough for the New York Times to deem it worthy of a 1,000-word write-up. Some indie agency cheerleaders lamented Droga’s decision to sell as a cash-hungry enterprise; others used the news as a recruitment opportunity.
Droga5 staffers received news this morning, while clients were told earlier, according to its global chief executive, Sarah Thompson. “I would say we’ve received an overwhelmingly positive [response],” she told The Drum. “We spend a lot of time with our staff talking about our vision and where we want to go, which is moving from more traditional advertising to full brand experience.
“Our employee base is well informed of that and is starting to really understand that the power of Accenture Interactive is very in-line with where we're going. People are excited to see opportunity and the global scale that we couldn't realize before.”
Thompson said the deal will not affect staff numbers, and Accenture Interactive chief executive Brian Whipple – the architect behind his company's M&A shopping spree – promised to keep the “very meaningful” brand of Droga5 alive.
But on the New York office floor, the atmosphere was one of cautious optimism, according to one staffer who said they and their co-workers currently feel both “uncertain” and “confused”.
The (debatable) value of independence
The confusion lies partially in the incongruity between Accenture’s global, collaborative vision and Droga’s very well-documented musings on self-governance (“All the times David was tipsy at parties giving speeches about the value of independence...” one strategist quipped on Fishbowl).
Some commenters, including Connelly Partners’ Steve Connelly, have gone as far to write off the agency altogether. “Some of the people at Droga are some of the industry’s best – they cashed out,” he declared. “The independent fire is now out for them. People will leave. A different caliber of client will come.”
Thompson is ignoring the naysayers. But she’s also confident in Whipple’s promise to protect the culture of the agency, noting it was “the first thing [Accenture] brought up" in discussions.
“They really asked us: ‘What do we need to do and not yet do? How do we make sure that we have that dialogue every step of the way as we integrate to make sure that you're more creative than you've ever been before?’”
A culture of cultures
Whipple has asked these questions before: he’s led Accenture Interactive through no less than 30 acquisitions for nearly a decade and refined what is known internally as its ‘culture of cultures’.
This is the philosophy that requires acquired companies to align their values to that of the consultancy’s while doing all they can to protect their internal culture.
The strategy, from the outside, appears to work. Diaries from Karmarama and The Monkeys’ recent exchange program highlighted the prominent differences between Accenture Interactive’s UK and Australian shops, which have both managed to retain the vast majority of their leadership years after the merger ink dried.
However, some former employees in Karmarama's London office have taken to workplace review site Glassdoor with complaints over the changes. One ex-creative anonymously griped about the "dramatic" changes to its working culture at the agency, which was brought under the same roof as Accenture and Fjord. Another creative took to the site last August saying there's a "lack of transparency about what is going on with the business".
A former senior executive of Fjord – one of the group’s first big purchases – attests to Whipple’s gift for “just letting people keep their own thing" but admitted cultural issues can emerge further down the corporate line.
“Once you start working on Accenture accounts you start collaborating with the guys who have known the client for years, who are more client than the client," they said. "Things start to get challenged a bit – you start hearing things like, ‘We're not sure if the client's going to like that’. The more direct, collaborative work you do with [the] wider Accenture [business], the more that happens.
“You have to be very confident and very strong about keeping your culture intact and that can play against you, because you're not seen as collaborative and you're seen as bit arrogant. So, on the face of it, I think the culture thing works. But the deeper you get the more difficult it gets to do so – in spite of the encouragement."
Droga5 has a not-so-secret weapon in the fight against this aggressive account culture: David Droga himself.
It would not be much of a stretch to describe the man as an ad land celebrity and his story as a myth: the Aussie boy done good takes on Madison Avenue and wins. And by most accounts, Droga seems like the boy least likely to take the money and run, and leave the agency to flounder without its guru. Details of any earn-out agreement with Accenture have not been disclosed.
“David generates that creative culture,” said a former Droga5 staffer who worked under the founder from 2016 to 2017. “He brings out the best in creatives, but he's not stupid – he can hold onto clients for years by making sure he's always listening to them.
“So many people in David's position probably would just turn up on a Friday morning. He was there in the office every day at 8am with his sleeves rolled up ready to attack. He was working his ass off at a time when he really didn't need to be. His diary was wall-to-wall meetings with everyone in the agency on any given account when something needed to be cracked. He was always there, he was always all over it. He deserves everything he's got.”
Another veteran Droga5 senior exec said that as long as David's name is on the door "he won't allow it to be diluted" and categorically poo-pooed the idea of the boss handing in his notice post-deal.
“It doesn’t mean that he’s not business-savvy and collaborative – it’s just that the product is about excellence, and he sees creativity is a business imperative."
In tune with consultancy
Which begs the question – are Droga5 and Accenture Interactive so different after all? For Whipple, who finds it “odd that journalists are still talking about this consulting versus agency thing”, the answer is no: the two both agree that a holistic, experience-led view of marketing is critical, and he’s quick to shoot down the misconception that ‘Accenture Interactive’ is some sort of mushroom-colored office staffed by accountants in suits.
Conversely, Droga5 isn’t the kind of agency “where everyone’s got two sleeves of tattoos and half of them are stoned”, according to the producer.
“When I got to Droga, I was shocked at the armies of planners that were killing really good creative work because it wasn't strategic enough,” they recalled.
“That's not to say that the Droga way was wrong, but I think they are far more steeped in strategic corporate culture than a lot of people think. They are more in tune with this consultancy business than a lot of people think.”
Selling to Accenture was perhaps the best thing Droga could have done for his agency’s culture because, if nothing else, he has bought it time.
Jay Pattisall, a principle analyst at Forrester noted that, for all its creative fame, the Wall Street shop has not been immune to the tremors in the industry. It closed its Sydney operation in 2015, laid off a number of its workforce last year and witnessed its staff shrink to 550 in order to adapt to the changing demands of clients’ workflows.
“We should not ignore the fact that Droga’s performance mirrors that of the industry,” said Pattisall. “The agency needs to be viable economically. This type of ownership may provide for that by allowing them to grow each other’s clients organically and go out and prospect together in business.
"Certainly that means changes. But maybe those are the types of changes that are necessary for a creative agency to be viable."
All in all, two things are certain. If the merger is a success, Droga’s myth will only be strengthened: Aussie boy done good takes on Madison Avenue and evolves to survive. And if it fails – because of culture or any other reason – he’ll still have his lifetime achievement award in his cabinet, his name above the door, and a lot of money in his bank.