And then there was – nobody of much note (LBi possibly excepted) among digital agencies and Wieden+Kennedy and Mother holding out against the mighty wallets of the big marcoms companies in the creative sector.
AKQA, the world’s biggest digital agency, has agreed to become part of Sir Martin Sorrell’s WPP empire for about $540m; some shares left in the hands of the management headed by chairman Ajaz Ahmed (pictured), CEO Tom Bedecarre and other managers but basically a done deal.
I thought Ajaz was being a bit cagey when he completed his interview with us last Friday, saying independence was a state of mind and his ambition was to have 5,000 people working in AKQA. Now, with WPP, maybe he will.
We also speculated a short time ago that Sorrell was surely on the brink of a big deal; maybe timed to deflect shareholder opposition to his pay package, which surfaced spectacularly at last week’s AGM in Dublin.
Now it transpires he was. Does this help his shareholder case? Maybe, maybe not. WPP has grown to be the world’s biggest marcoms company by a fair distance ahead of US rival Omnicom but shareholders are no richer than they were ten years ago. There’s an awful lot of debt on WPP’s balance sheet and it’s just been added to.
But AKQA for $540m? It makes slightly less than half of that in revenues so the price is definitely toppy. But it also shows the problem that faced Ahmed and Bedecarre: $230m in revenue isn’t enough to fund a worldwide agency network, analogue or digital. And the margins are better in analogue.
It’s still a shame to see AKQA go though.