WPP's surprise acquisition of AKQA for a reported $540 million was the group's biggest purchase since Razorfish in 2009 and followed other, aborted approaches by Sir Martin Sorrell. The deal bolsters WPP's digital credentials, but what does it mean for AKQA? Ajaz Ahmed, its co-founder and chief executive, explains all.
Having been courted by WPP on previous occasions only for you to thwart the advances, what tempted you on this occasion? Was it your choice or that of your larger shareholders?
Every five years or so, we have a defining moment that we call "power-ups". These allow us to reinvent our agency. The first of these was when we made the decision to launch AKQA in the US. The second was when we made the decision to grow our company from 500 to 1,000 people in multiple regions. The third is now - we have made the decision that we want to support our clients in the geographies they need us to be in.
At the same time, we want to give our team more opportunities to grow their careers and experiences internationally. We also aspire to build one of the world's great creative companies that will endure for decades. Martin (Sorrell) and his team at WPP share our vision, values and ambition for what AKQA could become.
Did you have discussions with other networks and, if so, why did you turn them away?
Given our record, the trajectory AKQA is on, the momentum and consistency of the work, many types of company got in touch with us. We have had regular communications with potential investors over the years.
We also have a duty to our clients, employees and the work to find the right home for the long term. WPP is our home.
What benefits do you think being part of the WPP network will give you that you didn't have before? And, conversely, what do you give WPP?
We have tremendous demand from clients to be in new markets - WPP can help us to accelerate that much faster than we could develop with a financial partner.
AKQA gives WPP significant depth to its service offering in areas that are becoming increasingly important to clients and audiences. For example, social media, mobile, search, e-commerce and gaming.
With the deal in place, we can support our clients in new markets faster, as well as make investments for the long term in areas that will become increasingly important in the future as the media and marketing landscapes evolve.
So, in short, this partnership allows AKQA to scale our geographic reach and add significant additional services to offer our clients in key areas such as research, media and analytics. We also want to create new service lines, so will want investment for those.
Sorrell has said that there is "no reason" AKQA couldn't reach $1 billion in revenue. Do you think that this figure is realistic and, if so, where and when do you hope this growth will come from?
As entrepreneurs, we are excited about putting our spirit and energy into creating new service lines and expanding into new geographies. The agency will start working with new clients that we don't currently work with.
The world's leading agency and professional services companies have reached $1 billion (in revenue) and we see no reason AKQA can't reach that.
We have grown consistently and anticipate this to increase as we both help our existing clients and maintain our record of winning new clients, as well as adding to our geographic reach and deeper service lines.
Where are your priorities for expansion and why?
Our priorities for expansion are based on the priorities of our clients and their audiences. In the short term, we're looking at entering Japan and Brazil and further developing our offering in India and China. This will help AKQA meet existing client needs as well as build new foundations in some of the fastest-growing economies.
What does the deal mean for the dynamic and entrepreneurial culture of AKQA? Are you worried that you'll become subsumed into the slow-moving body corporate?
We see the opportunity to become more dynamic and entrepreneurial now. We are not aligned with any other agency, so we are in control of our own destiny. If we don't make this work, we have only ourselves to blame.
And will you cope with the inevitable lack of independence that being part of a network will bring?
WPP knows that the true value of AKQA is the agency's creativity and entrepreneurial spirit. We will always have an independent mindset, which to us means caring for clients, caring for the work and staying hungry.
We are a standalone operating unit and will maintain our independent and entrepreneurial culture at AKQA. WPP is a strategic partner rather than a financial partner, meaning it will allow us to make decisions that will benefit AKQA, and our clients and the work in the long term.
How long are you now committed to the company?
I feel like I am just getting started. So I'll be with AKQA and WPP as long as I continue to make a contribution and remain relevant.
What will be the next thing that we need to look out for from AKQA?
We will focus on our clients, our team, our work and our culture. We aspire to create one of the world's great creative companies that's attractive to clients, audiences and employees. The work will always do the talking.
1995: AKQA is co-founded by Ajaz Ahmed and James Hilton, based on the initials of the former's full name - Ajaz Khowaj Quoram Ahmed. Its launch client is Virgin.
2000: The agency begins working with Nike.
2001: AKQA expands globally in the wake of investment from Francisco Partners; Tom Bedecarre joins as the chief executive.
2004: The book AKQA Volume 1 launches and quickly sells out on Amazon.
2006: The AKQA Mobile division and Future Lions in Cannes are launched.
2007: After talks with WPP break down, General Atlantic becomes the new majority stakeholder of AKQA. General Atlantic holds an 80 per cent stake, with the remaining 20 per cent held by staff. The agency expands further into the Amsterdam and Shanghai markets.
2010: AKQA opens up an office in Berlin.
2011: AKQA is named the "most awarded digital agency" by The Gunn Report, and is recognised as Agency of the Year on both sides of the Atlantic by Campaign and Adweek.
January 2012: AKQA opens an office in Paris with Nike as founding client.
May 2012: Velocity, the first client/agency book co-authored by Ahmed and Nike's Stefan Olander, is launched and becomes a bestseller in the UK, the US and Germany.
June 2012: AKQA is acquired for a reported $540 million by WPP.