The term growth hacker was coined in 2010 (See Andrew Chen’s Growth Hacker is the new VP Marketing)
At the heart of this idea is the mantra “Experiment, Experiment, Experiment”
To engage in the endless A/B Test cycle
... and yes, a whole new $150+ billion martech industry has emerged over the past decade to automate this exciting new field of performance marketing
Now the Growth Hacker narrative emerged around the same time Hal Varian declared to the newspaper industry its best chance of survival was to 'experiment, experiment, experiment'
You could say growth hacking emerged from the zeitgeist. The winds of change
When the idea first landed as the 'next big thing' in marketing I wrote a post on ‘What Google can teach the newspapers about innovation’
In that post I explained that Hal Varian’s call to the Newspapers to 'Experiment, Experiment, Experiment' was essentially an exercise in branding because it didn't reflect the reality of Google’s innovation engine
A casual look at the data revealed the secret to Google’s success was less about 'Experiment, Experiment, Experiment' and more about 'Acquire, Acquire, Acquire'
Roll forward a decade and it should come as no surprise that the Digital Agency of the Decade acquired the future rather than building it
Accenture formed its Interactive Business Group in 2009.
Since that announcement Accenture's appetite for acquiring creative agencies has become legendary
The Monkeys, Droga5, Bow & Arrow, Karmarama, Fjord are just the tip of the iceberg
So when in 2020 Ad Age announced that Accenture Interactive was the largest Digital Agency in the world for the 5th consecutive year it came as no surprise to industry insiders
At the heart of Accenture’s success was an arbitrage play. A numbers game
You see the market multiples on Ad Agencies trend below 1x Revenues. Accenture trades between 3-4x.
Every time Accenture acquires a new agency it makes >3x on the deal before you even account for future revenue growth
What makes the arbitrage even more interesting is the average revenue per employee generated by an Ad Agency is around $250k.
Meanwhile the ARPE for Accenture is around $75K
The reason for this being the ongoing disruption of its core SI business by Offshore Outsourcing providers
And this raises the question: How does a professional services business that is 3x less efficient generate a market multiple 3x that of the competition it is hovering up?
Did it embrace growth hacking? Did it launch a thousand failed experiments?
The simple answer is no
Accenture has achieved this through… yes, you guessed it… by leveraging its Brand and exploited the gap between market perception and market reality to exploit the arbitrage opportunity.
So while the rest of the industry debated the relative merits of creative awards, mobile apps, search, SEO, social, stories, conversations, influencers and growth hacking Accenture simply gamed the business of Creative Professional Services by reimagining it as an exercise in creative accounting
.. and that's why Accenture's stock performance since mid-2009 looks more like Google's than Publicis, Omnicom or WPP PLC
and I think that's something to think about moving forward…
especially when trying to reimagine the agency of the future...