Dive Brief:

• Accenture Interactive forecast that it will increase revenue more than 20% this year, Campaign reported. The digital marketing services division of Accenture claims growth is mostly organic, although the company has acquired several digital marketing agencies in the past year to expand.
• Accenture Interactive is on course to surpass $10 billion in revenue this year after reaching $8.5 billion by August 2018, according to Campaign. Previous agency acquisitions such as Fjord, Karmarama, The Monkeys and SinnerSchrader have increased sales organically, Rowland said.
• Accenture Interactive estimated it will spend $1.3 billion on acquisitions this year. The company in April made the biggest acquisition in its 10-year history with the purchase of creative agency Droga5 for an estimated $475 million, Ad Age reported.

Dive Insight:

Accenture Interactive's emphasis on organic growth shows that its prior-year acquisitions are supporting the company as it competes more directly with traditional ad holding groups, whose revenue growth has largely stalled. Integration has been a big question hanging over Accenture Interactive, as the unit has snapped up dozens of smaller marketing firms around the globe over the past several years. While acquisitions are a time-tested way for a company to boost revenue, organic growth is a much better indicator of corporate and industry health.

"It is fundamentally an organic-driven business where we have used the strategic acquisitions as really an igniter, if you will, of the organic growth," David Rowland, interim CEO of parent company Accenture, said last week on a quarterly earnings call with analysts.

Brands are turning to non-traditional sources of marketing expertise such as Accenture as ​data-driven, programmatic advertising becomes more prevalent, and they seek to cut costs or streamline marketing operations. Those dynamics also are pushing companies to reorganize their managerial functions, with some brands eliminating their chief marketing officers (CMOs) in favor of chief growth officers (CGOs) who bring together several different departments — such as product development, marketing and sales — with a focus on revenue growth.

Smaller, independent agencies operating in a highly competitive market might view Accenture as a more desirable buyer. David Droga, the founder of Droga5, last month summed up the changing dynamics of the agency business while speaking on stage at the Cannes Lions International Festival of Creativity, according to Campaign's report. In an appearance with Brian Whipple, global chief executive of Accenture Interactive, Droga said he sold his agency to the consulting firm rather than a traditional agency group because of its more holistic approach to the customer experience.

Droga5 has more than 500 employees with offices in New York and London. The agency has earned industry recognition for clients such as Amazon Prime Video, IHOP and HBO's "Game of Thrones." Current brand partners with the agency additionally include Chase, Kraft, Hershey and Under Armour. Many of Accenture Interactive's past purchases have targeted smaller, regional agencies, like the Brazilian content marketing firm New Content or the Dutch programmatic specialist Storm Digital.