Accenture Buys London Creative Agency Karmarama

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Sid McGrath, Nik Studzinski, Jon Wilkins, Ben Bilboul
Sid McGrath, Nik Studzinski, Jon Wilkins, Ben Bilboul Credit: Karmarama

Consulting giant Accenture has made another big play into the agency space with the acquisition of London shop Karmarama, whose clients include Unilever, Honda, Deutsche Bank, and BBC Music.

Karmarama is the third largest U.K. independent agency by billings, according to Nielsen, and the largest in terms of staff numbers – currently around 250.

Accenture Interactive has focused largely on buying digital agencies, a space Karmarama has increasingly been moving into, over the last two years.

Karmarama will keep its name, but become part of the Accenture Interactive network in Europe, Africa, the Middle East and Latin America (EALA). The terms of the deal were not disclosed.

Brian Whipple, senior managing director of Accenture Interactive, said, "Our immediate mission is to seek and destroy and dominate the market … We want the Karmarama DNA injected into our DNA."

The focus will initially be on the London market, but Karmarama's management team -- Sid McGrath, Nik Studzinski, Ben Bilboul and Jon Wilkins -- are looking to expand their opportunities with international clients, as well as to contribute to Accenture strategy and creative across the region.

Mr. Wilkins, executive chairman of Karmarama, was also one of the original founders of Naked Communications in 2000. He said, "We have always focused on trying to be the most progressive agency in this market – bringing data and branding together to create one experience for the customer – and this feels like a fulfillment."

Accenture Interactive's agency acquisitions in 2015 and 2016 include creative technology studio Chaotic Moon in the U.S., and digital agencies IMJ Corporation in Japan, AD.Dialeto in Brazil, Pacific Link in Hong Kong, and Reactive in Australia. Clients include Subways (U.S.), Nestlé (Australia and New Zealand), Unilever (U.K.), and L'Oréal (Brazil).

Agencies have increasingly found themselves competing against consulting firms like Accenture and Deloitte in digital pitches. Both consultants pitched for Renault Nissan's global business in 2014 against AKQA and the eventual winner, Digitas LBi (part of Publicis Groupe).

Accenture Interactive is ranked by Ad Age's Datacenter as No. 6 among the world's 50 largest agency companies, right below Dentsu Inc. and just ahead of Havas. Based in New York and London, Accenture Interactive posted 57.8% gorwth in revenue in 2015, to $2.92 billion.

Mr. Whipple explained that Accenture Interactive has a separate identity in the marketplace from Accenture's consulting arm. He added, "Our cultures are vastly different. But we are built on the shoulders of Accenture, and we take advantage of its global footprint and its relationships with CEOs around the world."

Anatoly Roytman, managing director of Accenture Interactive ELEA, said in a statement. "Together, we have created a new industry powerhouse and one of the largest homes for digital creativity in the U.K. This acquisition will help Accenture Interactive to meet growing client demand in the U.K. market and beyond, and will enable us more than ever to push the boundaries when it comes to creating remarkable brand experiences."

Karmarama was founded in 2000 and received backing from Phoenix Equity Partners in 2011. Phoenix has sold its stake in Karmarama to Accenture.

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