WPP Bets Big On Digital Future With AKQA Acquisition

Jun 21, 2012 at 4:53pm ET by Pamela Parker

Chairman Tom Bedecarré and Founder and CEO Ajaz Ahmed

WPP PLC, the world’s largest advertising company, has added one of the last and largest independent digital agencies, AKQA, to its ranks, agreeing to purchase the firm for a reported $540 million. The purchase price, if correct, makes it one of the largest digital advertising agency acquisitions.

The San-Francisco-based agency will remain an freestanding unit within the holding company and will retain its leadership — founder and CEO Ajaz Ahmed and Chairman Tom Bedecarré. Bedecarré will also become president of WPP Ventures, a new Silicon Valley-based company, which will explore new digital investment opportunities for WPP as a whole.

The agency’s services include integrated digital communications campaigns that incorporate social media, mobile, interactive experiences, gaming and content creation. Clients include Delta, Diageo, EDF, GAP, Google, Microsoft Xbox, Nike, Target, Unilever and Virgin Money. AKQA has long been known for its creative work. It has won 19 Agency of the Year titles and collected five Cannes Lions.

“We are thrilled to welcome AKQA’s unique team of technological innovators and entrepreneurs to WPP,” said WPP CEO Sir Martin Sorrell in a statement. “We have admired their creativity and technological skills for a long time along with their outstandingly effective and award-winning work for clients.”

Sorrell added that WPP will work to broaden AKQA and WPP’s offerings to clients, both geographically and functionally.

AKQA’s ownership includes General Atlantic, a private equity firm, and company management. The New York Times report says General Atlantic’s stake was 80 percent.

It employs 1160 worldwide in eight offices throughout the U.S., Europe and Asia. The company expects to bring in revenues of around $230 million this year, having sold $189 million in 2011.

For WPP, the acquisition is a sign that it wants to delve further into digital marketing. Last year, it derived 30% of its revenues ($4.8 billion) from digital sources, and, in the next five years, the company says it wants to grow that to 35 or 40%.

Other digital agencies under the WPP umbrella include 24/7 Real Media, GroupM Search, Xaxis, Possible Worldwide (the merger of Schematic, Bridge, Blue, Quasar and Gringo), OgilvyOne and Wunderman.

About The Author: Pamela Parker is executive features editor of Marketing Land and a contributing editor for Search Engine Land. She’s a well-respected authority on digital marketing, having reported and written on the subject since 1998, including a stint as managing editor of ClickZ. She’s also worked to help monetize independent publishers’ sites at Federated Media Publishing. She blogs about media and marketing at The River and about cooking, gardening and parenthood at Free Range. See more articles by Pamela Parker

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