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WPP/AKQA Deal Escalates "Digital Arms Race"

WPP announced yesterday that it has agreed to acquire (subject to regulatory approval) AKQA Holdings, the independent digital agency. This "escalates the digital arms race" between WPP, based in Dublin, and Publicis Groupe, based in Paris, as the New York Times describes.

WPP has already acquired 24/7 Real Media, and Gringo, and a number of smaller agencies, while Publicis, the world's third-largest advertising company (WPP is first) has acquired Digitas, Razorfish and Rosetta Marketing Group.

AKQA is a good "get" for WPP. It has a strong pedigree in digital communications campaigns, and a client base that spans social media, mobile, interactive experiences, gaming and content creation. Clients include Delta, Diageo, EDF, GAP, Google, Microsoft Xbox, Nike, Target, Unilever and Virgin Money, among many others. Its work has garnered 19 Agency of the Year titles. Last year, AKQA won Digital Agency of the Year honors in both the US (Adweek) and the UK (Campaign) and collected five Cannes Lions.

WPP has approached AKQA twice before, according to WPP CEO Sir Martin Sorrell, but the timing was right. As AKQA Chairman Tom Bedecarre told Ad Age, his agency is setting its sights on further international expansion.

Currently employing 1160 people worldwide – from software engineers and technologists to creatives and strategists - the agency operates through offices in the US (San Francisco, New York, Washington DC), Europe (London, Paris, Amsterdam, Berlin) and Asia (Shanghai). The agency had gross assets of $282 million as at of December 31 2011 and forecasts revenues of around $230 million in 2012, having achieved $189 million in 2011.

AKQA will continue to operate as an independent and stand-alone brand within WPP and be led by 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.

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

Bedecarré commented, “We are delighted to preserve AKQA’s independent culture and maintain focus on serving our clients. Today we are celebrating joining WPP and tomorrow our teams will be back to business as usual.”


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