Partnering with the world's fifth-largest holding company is an interesting move for Avenue A/Razorfish, which touts its independence, but Clark Kokich, the agency's worldwide president, said it was necessary in order to enter Japan.
"We didn't find in Japan an independent company that could deliver the quality and services that we were looking for," he said. The discussions between Avenue A and Dentsu began in spring 2006. Since then there have been a half-dozen meetings between Tokyo and Seattle, where Avenue A is based.
Mutually exclusive in Japan
Avenue A isn't alone in its desire to be global. The internet is at the heart of both agencies' and holding companies' futures. And because internet marketing so crucial to clients -- it is, in addition to an advertising medium, a customer acquisition, e-commerce and relationship tool -- agencies would like to hang on to those client relationships on a global level.
Dentsu and Avenue A will be mutually exclusive business partners in Japan only; the relationship doesn't affect Avenue A's ability to work independently or with other holding companies in other parts of the world.
More expansion planned
Avenue A has been global since 2005 when it acquired DNA in the U.K. Since then it has added Amnesia in Australia, Neue Digitale in Germany and e-Crusade in Hong Kong and Shanghai. Mr. Kokich said Avenue A plans to expand to high-growth countries in Europe and Asia and, eventually, South America.
Mr. Kokich said Avenue A is managing some clients in multiple countries but wouldn't disclose which, although he hinted that global management makes sense for marketers in the pharmaceutical, automotive, technology and finance categories.
When asked about the possibility of Avenue A being an acquisition target, he said he is "absolutely comfortable with our ability to compete as an independent." He added that the internet is "not just an advertising medium. It's a tech platform, a sales channel, a CRM tool. ... We believe there's room for one global focused independent interactive agency and are completely focused on not treating [the internet] as just an ad medium."
Avenue A is owned by aQuantive, whose stock this morning rose 3.5% on the news.