Agency of the Year: Digital Agency of the Year - AKQA

A spectacular turnaround has seen AKQA rake in new business and turn its losses into profit.

AKQA has set itself apart from the competition this year, adding major global brands including Coca-Cola, McDonald's and Smirnoff to a client roster worthy of any advertising agency.

The agency's profile is one of the lowest in the industry, belying its 11 years' experience in the digital sector. However, 2006 saw AKQA fend off challenges from a growing number of rivals to cement its position as Marketing's Digital Agency of the Year.

A sustained period of new business activity and incremental work for clients including Nike, Orange and Microsoft have helped AKQA raise the bar in terms of creativity. It has also put in a stellar financial performance, with its London office turning a loss of £700,000 into a seven-figure profit.

Despite increasing competition from pureplay digital rivals and traditional ad agencies, AKQA has won some of the biggest pitches in the digital sector this year. In November, McDonald's named it as the lead agency on its global digital roster alongside local agencies including Tribal DDB.

Smirnoff recently chose AKQA over EHS Brann and OgilvyOne to handle its worldwide creative account, while Dell hired it to transform its online strategy from direct response to brand building.

Perhaps the best demonstration of AKQA's prowess came earlier this year when it launched a Coca-Cola website in more than 40 countries around the world as part of an initiative inviting consumers to tell their life story in less than 45 seconds. The project came just months after Coca-Cola handed the agency its £3m global digital account.

Coca-Cola's strategy to devote a growing proportion of its £30m annual media budget to digital also saw AKQA create a number of other projects for the brand during 2006. Arguably the most significant was a short film featuring Wayne Rooney showing off his football skills with a Coke can. More than 3m people saw the viral after ITV broadcasted it as part of its World Cup programming.

One of AKQA's biggest projects of 2006 was creating Nike's Run London website and CRM campaign for the fifth year running. The agency pushed both creative and technical boundaries with the launch of a number of services, including the Nike Routefinder, that helped runners plan routes around the capital. The agency also enabled participants in the Nike run to watch themselves cross the finishing line just hours after completing the race.

AKQA claims its consistent innovation has been helped because it has not been hit by the skills shortage gripping much of the digital sector. With 475 employees in six offices around the world, the agency has successfully managed its growth and won a steady stream of new business, including the online ad account for whisky brand Johnnie Walker and the redesign of the Gucci website to include video and motion graphics.

The European Interactive Advertising Association predicts that online adspend will rise by more than 65% over the next two years, providing AKQA with a huge opportunity for growth. The agency is also keen to expand organically, opening an office in China ahead of the Beijing Olympics in 2008. With Coca-Cola as its first client, the Shanghai office is now recruiting technical and creative staff from the Asia-Pacific region.

The increasing importance of mobile has also prompted AKQA to launch a division dedicated to creating products, services and content for wireless devices. Under the leadership of Dan Rosen, AKQA Mobile has already carried out work for clients including Xbox, Nike and Coca-Cola.

Next year's challenge for AKQA will be to continue to expand its already extensive client list without compromising the standards of creativity that have ensured its success so far. Following a promising start for its mobile marketing division, the agency will have to develop skills in other new areas, such as IPTV, if it is to stave off increasing competition from creative hot-shops and established advertising agencies moving into digital.

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BEST OF THE REST

Clients continued to shift spend onto the web during 2006, but as budgets grew so did the demand for agencies able to provide greater creativity and a wider range of digital services. So rather than a year of major online pitches, the past 12 months have been dominated by UK digital agencies hiring staff to service rapidly increasing levels of business.

The expansion of the sector has seen Profero emerge as one of the most creative full-service agencies in the UK, with work for clients including Apple, Mini and Butlins. An increase in headcount of more than 50% has helped Profero secure clients in the automotive, FMCG and telecoms sectors. The agency claims that 66% of its business is now full service, compared with 50% this time last year.

An expanded digital design and build team has helped Profero secure a place on the COI roster, with a development project under way for 'Smoke Free Britain'. Meanwhile, web builds for beer brand Adnams and FMCG giant Johnson & Johnson should increase the agency's revenue by 70% in this area. Search is also performing well, with Profero seeing revenue more than double on the back of projects for Apple, L'Oreal and Motorola.

Despite the industry's ongoing skills shortage, Agency Republic has managed to increase its staff by more than 70% following an influx of new business during 2006. As well as being appointed by Diageo to handle the global online marketing for its Baileys liqueur brand, Agency Republic has been hired by MTV to promote its TV channels and boost its appeal among young web users.

The agency's reputation among clients for outstanding creativity helped it snatch Unilever's Lynx shower gel account from Dare. It also beat AKQA and Tullo Marshall Warren for the chance to reposition the Impulse brand online and pipped Modem Media to secure BBC Radio 1's digital account.

The launch of a division to strengthen its media offering, as well as a creative technology department, has helped Agency Republic become an integral part of Omnicom's Zulu Network. The agency claims to have seen revenue increase by £3m during 2006.

Regarded by most as the digital agency benchmark, Glue London has had a successful year, following its acquisition by Aegis for £14m. As well as business wins including Adidas and Diageo, the agency was appointed by Coca-Cola to handle the multimillion-pound launch of its Coke Zero brand. Won without a pitch due to Coca-Cola's existing relationship with Aegis, the brief saw Glue extend a heavyweight cross-media campaign onto the web. The agency has also worked on projects for EMI and Virgin Trains, as well as Mini, in partnership with Profero.

Glue predicts that income will be up 20% this year, following an increase in staff and a number of structural changes. As well as launching Anorak, a dedicated design and production house, the agency is expanding SuperGlue, its interactive film division, to take advantage of increased broadband uptake.

One of the most significant pitches of 2006 saw Vodafone award its online ad account to Dare. Since landing the business in January, the shop has handled a number of projects for what is now its biggest single client. The Vodafone win came less than six months after Dare fought off competition from Wheel, AKQA and DNA to secure the £15m global digital creative and website design account for the AA.

The past few months have seen Dare secure a place on Unilever's global digital roster, winning a pitch to become Flora's digital agency. It has also won business from the COI, Walls/Magnum and Google. Dare expects the work to help push turnover up by 73% for this calendar year.

As well as poaching Lee Wright from Grand Union to become its first managing director, the agency is recruiting staff through its Dare School - a web project showing graduates what it is really like to work in a digital agency.

Despite the loss of Wright, Grand Union has had a successful year, and continues to carve out a name for itself; in Marketing's survey, it attracted by far the most mentions from fellow digital agency heads.

The agency's most significant new business win of the past 12 months has been the Energy Savings Trust. As well as securing work from Boots, Npower and The British Army, Grand Union managed to secure a place on the COI roster. High-street bank Abbey has also strengthened its relationship with the agency, extending its role beyond online advertising to the redevelopment of its consumer website.

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