Ad Age and others have been delving into talent/broadcast conglomerate Endeavor’s accounts to find out of how much it earned from its 49 per cent stake in Droga5 (below) – recently sold to Accenture Interactive – and the answer seems to be $233m. Which makes the total value of the agency some $475m with 51 per cent formerly owned by an entity called David5, presumably David Droga and others.
The deal numbers also show that Droga5’s net revenues fell last year by 13 per cent to $169.8m while net income fell over 40 per cent to $29.9m. Ad Age reported that one client accounted for 21 per cent of income.
Which shows the vulnerability of even the most successful creative agencies. Also that, maybe, this was a good time to sell although last year would have been better.
Droga5 is Accenture’s biggest creative agency deal – others include Karmarama in the UK, Rothco in Ireland and The Monkeys in Australia – but Accenture Interactive’s annual income is about $8.5bn with Accenture as a whole on about $40bn. Which puts creative agencies in their place although D5 lacked a network apart from its London outpost.
It also emerges that Publicis.Sapient, the consultancy bit of Publicis Groupe, has won a $112m four-year contract from the US Health Department to carry out a multitude of tasks, beating some quite small (relatively anyway) US contenders. This may prove controversial.
But $28m income a year for four years is something most agencies can only dream of these days. Maybe Publicis boss Arthur Sadoun has got it right with his big bets on consultancy/data. Sapient cost $3.7bn, this year’s buy Epsilon $4.4bn.