2007 Digital AOY: AKQA

NEW YORK In late 2004, AKQA’s newly installed executive creative director Lars Bastholm found himself sitting in a cramped office facing a wall, toiling away in a bleak stretch of lower Manhattan “so shitty,” he recalls, “it doesn’t have a name.”

AKQA recruited Bastholm from the highly regarded Danish agency Framfab to open its New York office, part of the San Francisco-based shop’s ambitious plan to build a digital creative powerhouse that would capture major accounts.

In his first days on the job — sitting there, facing that wall — Bastholm wondered if he’d made the right choice. He didn’t have to wait long to get the affirmation he needed.

Bastholm and another new hire at the time, global ecd Rei Inamoto, successfully crafted a pitch for Coca-Cola that led AKQA to be tapped, in spring 2005, as the company’s first lead global digital agency. Fast- forward to the present, and the agency boasts a stable of accounts including not only Coca-Cola but AOL, Motorola and Smirnoff. And AKQA’s digs are somewhat improved, its New York base housed in a spanking new Soho space that’s home to 60 employees.

“We have a portfolio of brands now that most agencies would kill for,” says Bastholm.

For AKQA, 2007 marked the year it truly arrived. The agency’s early bet that it could build an independent, global, creatively driven digital agency serving some of the world’s biggest brands had finally paid off. Revenue last year spiked 45 percent to $99 million, with the agency adding Motorola and boosting its work for longtime clients including Coca-Cola, Nike and Visa. The shop also expanded its global footprint with outposts in Amsterdam and Shanghai.

AKQA’s staggering growth, consistently outstanding creative, innovation in emerging digital channels and determination to follow an independent course combine to make it AdweekMedia’s Digital Agency of the Year.

AKQA, from its inception, has charted its own course. It launched in February 2001, in the teeth of the dot-com meltdown, when most Web players were busy handing out pink slips. Meanwhile, San Francisco integrated agency Citron Haligman Bedecarre and U.K. Web player AKQA New Media joined forces with U.S. Web shop Magnet Interactive and Asian Internet agency The AdInc to create AKQA (as in “All Known Questions Answered”), with the ambitious goal to build a global integrated marketing agency with digital at its core.

“Our timing just sucked,” says Tom Bedecarre, AKQA’s CEO.

Creating immersive experiences is the hallmark of AKQA. Take “The Happiness Factory,” the agency’s re-creation of Wieden + Kennedy’s award-winning spot featuring a virtual world inside a Coke machine. AKQA, working with “Happiness Factory” animation house Psyop and gaming company Shift Control, created a virtual factory where users could “apply” for work. As part of the concept, AKQA pitched potential “employees” via ads on job-recruitment sites like Monster.com. Since the site is global, AKQA devised a made-up “Happiness Factory” language, translated into subtitles according to market. The result is a wondrous, whiz-bang experience, combining casual gaming with a hyper-colorful, imaginary world inside a vending machine.

The site boasts many technological marvels that actually remain hidden from the user. For example, AKQA had to find a way to translate high-quality Psyop animation into the online world without sacrificing quality or consumer experience. So, it converted the animation into Flash, chopping up scenes and utilizing progressive loading techniques to keep the consumer experience snappy.

That was no mean feat, and is emblematic of AKQA’s utilitarian approach to technology: rather than using advanced techniques just to wow users, it also is quick to find technological solutions for working out kinks in the execution of creative. That’s because in its DNA, as Bastholm sees it, AKQA is an ad agency. “At the end of the day, technology is in service of an idea and not the other way around,” he says. “We’re not a production shop in any way, shape or form.”

“They understand branding and marketing objectives need to be the focal point, then you work with the digital strategy,”says Carol Kruse, vp, global interactive marketing at Coca-Cola. “Some agencies want to jump to the cool creative or the latest technology.”

It’s a distinction AKQA execs never tire of pointing out. While much of its work does reside online, AKQA is not merely a Web shop that tailors a traditional agency’s big idea for the digital realm. For longtime client Microsoft, for example, the agency built the online campaign for smash Xbox game Halo 3. While it did follow the creative blueprint of Microsoft lead agency McCann Erickson, it also cooked up a campaign with unique appeal to a rabid — if jaded — audience.

To grab the interest of Halo’s devoted following, AKQA created “Believe,” a Flash diorama of a battlefield inspired by the game. Of course, communicating the experience of a game by simply re-creating it in Web form doesn’t do much to entice consumers. AKQA went beyond just site work, creating a viral effort directed at the hard-core Halo devotee.

AKQA crafted an alternate reality game, Iris, which tapped into the passions of Halo fans, planting clues via everything from Best Buy circulars and fake Craigslist postings to 800 numbers and ringtones. Not only did thousands of gamers take the bait, the subsequent buzz via blogs and message boards expanded the campaign’s reach to some 1.5 million consumers, Microsoft estimates. “We saw an opportunity to expand that to a much greater interactive experience — we didn’t just re-create the game. We were able to give something to the fans that whet their appetites,” says Inamoto.

Jeff Bell, corporate vp, global marketing in Microsoft’s games division, says the agency “had to deliver the core for us so we could scale to the masses,” pointing out that the campaign’s eventual reach mirrored sales of the game.

While AKQA undeniably excels at Web projects, it also has been especially effective in bringing together clients with emerging digital channels. The agency’s global orientation has given it expertise in mobile and interactive TV, platforms especially popular in markets outside the U.S. (“There’s innovation on both sides of the Atlantic,” Ajaz Ahmed, AKQA’s London-based chairman, is quick to point out.)

Mobile has become an AKQA specialty. It was among the first interactive agencies to set up a dedicated mobile practice in 2006, bringing in Dan Rosen, a 10-year veteran of mobile marketing in the U.K. Since then, its mobile team has grown to 20 and wireless campaigns have been created for Coke, Visa and others.

To craft connections on the go, AKQA has concentrated on building brand utilities that improve consumers’ lives, rather than just using phones as simply another place for ads. For Visa’s first mobile campaign in the U.S., AKQA crafted a program around the Signature card’s affluent-lifestyle brand positioning. One element invited shoppers at San Francisco supermarkets to text Visa for advice on wine and cheese pairings. In another, patrons of fine-dining establishments could receive text messages detailing menus. The Signature promotion didn’t represent the latest and greatest technology — but it was determined to be, nonetheless, a highly effective means of reaching the target. And as consumer habits and hardware evolve, AKQA has come to embrace more sophisticated techniques.

To wit, Diageo’s Smirnoff made its first stab at mobile with a WAP site built by AKQA. Rather than simply re-creating the Web experience on the phone, AKQA opted for an on-the-go cocktails and nightlife guide. In the U.K., the mobile site reaped about one-third the traffic of the Web site, reports Michelle Klein, Smirnoff’s global digital marketing director, who calls AKQA “at the bleeding edge. They know what’s happening in the technology space and they bring those ideas to us. They have their fingers on the pulse. They came with a big idea and then blew the idea out.”

The big idea is, of course, at the heart of advertising. But will technological advances change that? Bedecarr