Interpublic Group (IPG) is reportedly exploring the sale of its creative innovation studio, R/GA, to Tata Consultancy Services (TCS), an Indian consultancy giant.
According to The Wall Street Journal, sources familiar with the matter suggest the move by the holdco is part of a broader push by consulting firms to expand on Madison Avenue.
Globally, R/GA is best known for its work for Nike, including its role in the development of Nike+. Other brands it has worked with include Google’s Android, Samsung, and Coca-Cola.
The WSJ reported that while terms of the deal remain uncertain, its sources suggest the deal could net around $300 million for R/GA. However, it risks falling apart if the two sides don’t agree on valuation.
The publisher further cited that IPG and TCS may be discussing a “larger strategic partnership” involving collaboration on shared clients in the AI or data space.
If successful, TCS would join the ranks of other consulting firms, including Accenture and Deloitte, which have moved deeper into the marketing space through significant acquisitions. Deloitte acquired creative agency Heat in 2016, and in 2019, Accenture acquired Droga5, helmed by notable Australian ad man David Droga.
R/GA was founded in 1977 by Bob Greenberg and became part of IPG after Interpublic acquired R/GA’s parent company, True North Communications.
Recently, R/GA has faced high turnover rates and a pullback in ad spend by its tech clients. The WSJ claimed that “according to people familiar with its performance,” R/GA’s revenue last year, estimated to be around $200 million, was down 20% year-over-year.
Locally, earlier this month, R/GA promoted Ben Miles, its VP and executive creative director of brand design for APAC, to the newly-created role of chief design officer APAC. In May, it appointed Marie Conley to the role of executive strategy director.
Accenture’s creative consultancy arm, Accenture Song, caused a stir last month in Aussie adland by recruiting Initiative’s three top leaders – CEO Melissa Fein, MD Sam Geer, and chief strategy and product officer Chris Colter – from the Mediabrands agency.
Mediaweek has reached out to R/GA and IPG. Both have declined to comment.
See also:
R/GA promotes Ben Miles to chief design officer across APAC
R/GA appoints Marie Conley as executive strategy director