Special Report: AKQA sets slow and steady pace for global expansion

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AKQA, the U.K.'s largest independent new-media agency, is setting its sights on the U.S. market but, in an atypical move for an interactive shop, plans to take its time doing so.

"It is part of our growth plan, but we are not willing to compromise quality," says Ajaz Ahmed, its founding enfant terrible. "We want to enter the U.S. in the right way, rather than the way U.S. companies have come to the U.K. Often, they have not understood the dynamics of the local market and how important they are. We're learning from those mistakes."


Despite working for pan-European clients such as Energizer Battery Co., that mindset means AKQA probably will enlarge international operations through internal expansion.

"Companies with dominant positions don't do that by acquisition," says Mr. Ahmed, chairman- CEO of the new-media agency. "We plan to grow in a way that will attract great talent" that then will push the shop into new business arenas.


AKQA also is casting its gaze on Europe and Asia.

"If it takes us a few years to be there in a quality way, it is what we will do," explains Mr. Ahmed. "We don't do what many people in the dot-com world do--short-ism. There is no built-to-flip mentality here."

AKQA has established a New Zealand presence, opened to handle Land Rover vehicles and Durex condoms.

The shop, with 1999 revenue reaching $21 million--a 109% increase from 1998--already claims multinational clients.

For Energizer, AKQA is creating European Web work, including sites in English, French, German and Spanish. The battery marketer is taking on Gillette Co.-owned rival Duracell, and aims to offer online ordering by yearend. In addition, AKQA will develop highly targeted local advertising campaigns.


Recently, AKQA grabbed global work for Nestle's Kit Kat, a major chocolate bar brand in the U.K. Still, there is no rush for global growth, Mr. Ahmed emphasizes.

"Clients are looking for solutions, not looking for an office in every market," he says.

The agency is known for its work with clients including BMW, Nike, Orange (which France Telecom recently agreed to buy from Vodafone AirTouch and rename the wireless service provider New Orange) and Sainsbury's Supermarkets.

AKQA claims to set itself apart from competitors with its "depth of understanding consumers and the psychology and understanding of the online consumer. We're very, very focused on that," Mr. Ahmed says.

In the future, AKQA will focus on evolving media, including mobile communications. With client Orange, one of the U.K.'s top wireless phone service providers, AKQA recently handled creative for an online campaign allowing consumers to send text messages to mobile phone users.

"Technology and ideas must come together," Mr. Ahmed says. "Too many people become obsessed by the technology."

He cites AKQA's work for Nike as "a great use of technology, instead of technology for technology's sake" for the sports shoe and apparel marketer.

Still, the battle is to win consumers over to the e-lifestyle.

"Obviously, many people still use the Internet for e-mail only, or for e-commerce. It's not how much they spend online but how much do they save?" he says. "We must make the Internet indispensable to consumers."


Privately owned AKQA "is not for sale," Mr. Ahmed says, but the agency does plan to float shares on the stock market some time in the "foreseeable future." He declined to be specific about timing.

AKQA has rejected potential suitors.

"We would not make a good acquisition target. We would make good consolidators, provide relationship building," says Mr. Ahmed. "Internally we're quite well-organized and could help others with that."

"We're a thinking company, a pioneer. For so many new-media companies, it was about size and scale," concludes Mr. Ahmed. "They lose sight of ideas and quality. For us, it is quality."

Copyright June 2000, Crain Communications Inc.

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