Inside PwC’s $750 million ad agency [Digiday]
If the title of this post looks familiar, it's because Digiday wrote a similar one about Deloitte about two months ago that we discussed, too. What's interesting about PwC Digital is that even though it's half the size of Deloitte Digital, it has no problem competing for a lot of creative work:
The agency alone did $750 million in revenue in 2014, making it the fourth-biggest agency network in the U.S. according to AdAge Datacenter. Its scale is what makes it able to compete against more traditional Madison Avenue advertising shops.
And the scale is huge: PwC Digital has more than 3,000 creatives and digital experts, who work inside an “Experience Center” that houses physical labs for prototyping, design and other creative. They work across 31 cities and at any time are working with over 200 clients.
David Clarke, principal and chief experience officer, who joined the agency via the firm’s acquisition of his shop, BGT, in 2013, says he knows the difference scales makes first hand. “When I had a small agency I used to say, ‘It’s not a big deal having only a couple hundred people,” he said. “But now, it’s a game changer. I’m challenged with a problem, I pull in someone from healthcare, or innovation or wherever. I love the horsepower.”
And that's the difference. If you're a chief experience officer (ugh) or whatever, you ring whomever and they come running because P. Dubs Digi is the hot new thing.
An interesting side note to this story — David Clarke and his wife were arrested earlier this year for driving their Porsche onto a sidewalk that was under construction and charged with felony criminal mischief. But, PwC Digital! Wow, quite an agency for an accounting firm.
Former Swisher CFO, accountant charged in fraud case [CO]
We covered BDO's dismissal back in May and now these criminal charges against Michael Kipp and Joanne Viard, Swisher's former CFO and director of external reporting, respectively, fill in the detail behind the magical number factory and it does not disappoint:
[T]he company allegedly used “cookie jar” accounting, inflating reserves of other companies it acquired and then drawing those reserves down to inflate earnings. Prosecutors say the company also took expenses that should have been booked on the profit-and-loss sheet and moved them to Swisher’s balance sheet, fraudulently reducing its reported expenses.
According to prosecutors, Kipp emailed Viard on Oct. 15, 2011, and said “I need to get about $300k in expense reductions.”
Viard responded with ideas of accounting items they could adjust, prosecutors said, and wrote back that “As long as the changes aren’t material, I wouldn’t need to disclose.” They reduced an accounting charge by $500,000, prosecutors charge, inflating earnings by the same amount.
Later that same day, Kipp emailed Viard again, prosecutors said, to tell her they would be able to make their earnings target.
“Here is the sum of my handy work for the day. I think if we can make all these stick, we can make it to the forecast of $3.5 million,” prosecutors say Kipp wrote.
See what Viard did there? When her boss came to her with an accounting problem, she didn't get all high and mighty about GAAP; she got creative! This is the stuff great accounting careers are made of. Until it all comes crumbling down, of course, which appears to be the case here.
'LIKELY' NOT A FRAUD: Here's what 6 Wall Street pros are saying about Valeant [BI]
Here's some incredibly unhelpful advice from Morgan Stanley: "if allegations of fraud are wrong, depressed VRX shares appear to present a buying opportunity." Lots of other analysts still like the stock, too. If staying in the burning house waiting for the fire department is how this is going down, then maybe Valeant is more like Enron than even Citron previously suspected. Also, John Hempton of Bronte Capital weighs in.
Airbnb Really Screwed Up With Ads About Paying Taxes [Gizmodo]
This is not — NOT! — how you react to paying taxes:
— Matt Stempeck (@mstem) October 22, 2015
These haven't gone over well.
In other news:
- U.S. Prosecutor Subpoenas DraftKings [WSJ]
- Carl Ichan started a super-PAC that will focus on international taxation. [Bloomberg]
- “There is no reason to be in Luxembourg from a business perspective, really.” [Bloomberg]
- Subway will measure its sandwiches. [UPI]