NEW YORK While many fret about a looming economic downturn, AKQA CEO Tom Bedecarre, speaking from the Olympics in Beijing last week, sees many reasons for optimism.
The Olympics were a showcase for several projects for high-profile AKQA clients: the culmination of the four-month "Lost Ring" alternate reality game for McDonald's; "Design the World a Coke" Web site; Nike's destination touting sports technologies; and Visa's "Go World" mobile and online campaign.
Despite the uncertain economy, AKQA has plans to build on its Olympics momentum. By the end of the year, the firm expects to top 800 staffers, an increase of 100 just this year. It is also on the hunt for acquisitions, particularly in the media and analytics space, while still eyeing a future public offering.
"I feel this is a business where you have momentum and you capitalize on it," said Bedecarre. "It seems to me that standing still is not a good place to be because companies like us are either growing or shrinking. We're continuing to grow."
To keep pace with its growth, the shop is filling out its management ranks. AKQA also shifted its chief financial officer, Tim Pierce, to the role of chief operating officer. He has moved from AKQA's San Francisco headquarters to London. To replace him, AKQA has tapped 25-year Grey Group veteran Lester Feintuck to take his place in San Francisco. Bedecarre notes that Feintuck, who served as CFO for Grey Group, has experience as a chief financial officer when Grey was an independent publicly traded company.
"He has a deep set of experiences in diversified marketing services, having worked on the advertising side, direct response side and interactive side," Bedecarre said. "He's accustomed to working with 70 offices around the world. He has experience in making acquisitions and integrating those businesses. He ticked all the boxes."
Meanwhile, AKQA is dealing with the loss of two key executives: president of interactive marketing Andrew O'Dell and San Francisco executive creative director P.J. Pereira, who departed the shop earlier in the year to form their own agency. Rei Inamoto absorbed Pereira's duties and was promoted to co-chief creative officer for North America alongside Lars Bastholm. J.D. Swartz took over O'Dell's new business portfolio.
While still painting the shop in growth mode, Bedecarre acknowledged the chances of taking AKQA public are slim in the next year because of the rocky economy and turmoil in the financial markets.
"In the near term, it's unlikely we'd be rushing to take the company public," he said. "But that's one of our goals in the future, and having someone with experience doing that will be helpful."
When General Atlantic bought a majority stake in AKQA from Francisco Partners in February 2007, AKQA indicated it would be looking for acquisitions to fill out its services. The only key deal was Searchrev, a small search technology team that brought AKQA bid-management software and the nucleus of a team that formed a search unit. Since then, AKQA has failed to close any deals. It was reportedly interested in U.K. digital media shop i-Level.
"We bid on some companies where we were not the high bidder," Bedecarre said. "The overall market conditions are leading to lower price expectations of people who are selling. I anticipate there will be other transactions and acquisitions."
Search, media and analytics remain high on AKQA's list. Its bet is to build a digital media operation that combines creativity with expertise in managing bid-based buying systems. In that way, AKQA has tried to carve out a niche in innovative media programs, such as the Visa small-business program launched on Facebook earlier this summer. It gives $100 Facebook ad credits to small businesses that download the Visa application.
Despite the success of the Visa effort, which was mostly strategy and creative, the client is a prime example of the uphill battle AKQA faces buying media. Visa rolled up its media buying and planning into Omnicom's OMD in February, taking away the agency's largest media client.
Since then, though, it has won media for Gap, including Old Navy and Banana Republic, and has begun hiring again.
"Not all clients want to be lost inside a massive media buying network," Bedecarre said. "Other clients don't believe they're getting best practices from a TV buying agency that throws a few people at interactive. When the media model shifts from being about scale and tonnage to an auction-based model, the core competency will be optimizing buys and using technology, not using scale to make buys cheaper. We think the route we're taking reflects the future."
