Rolling up an Online Ad Agency Powerhouse: AKQA CEO Tom Bedecarre (Part 7)

With the recent trend of private equity deals and acquisitions of advertising firms, the industry is truly on fire. This is the perfect opportunity for Tom to either take his company public or sell for a substantial amount.

SM: Have you had offers already for an acquisition? TB: No.

SM: In the future, in terms of those four parts of the advertising industry converging, do you see all of these large companies like Google, Yahoo, Microsoft, owning all four types of these assets – publishing, technology, ad networks and agency? TB: We are certainly seeing some of that happening right now. I think that it will be interesting to follow the next six months. One, as the regulatory clearing process works its way through, it is very interesting to me to watch the traditional advertising industry so concerned about these deals that there is a movement afoot to block them via a lobbying effort.

SM: Why is that? What is the psychology of the traditional advertising industry right now? TB: I think it is the fear of change, the fear that the world is moving too fast and that they are going to be marginalized in a new world where technology and software make decisions for media buys, not fat guys smoking cigars in the 21 Club. If you take a look at the consolidation of traditional media, billions and billions of dollars and a huge percentage of all of the television, radio, magazine, newspaper advertising that is bought and sold globally is funneled through a small handful of companies. That is a very tight circle, a very small private club and there is a lot of money that goes through that circle, and a lot of money that is made.

SM: Not only that, but it is incredibly inefficient as well. TB: Absolutely. I think the vision that Google has, and perhaps Microsoft is trying to catch up with, is to change a very inefficient process. On a small scale, for small advertisers, putting small text messages on search results, there is an efficiency and technology that underlies that. There are no junkets, no golf clubs and there are no gift bags which go to media planners. It is all done through math and algorithms. That is the vision Google wants to apply to the broader media buying and selling universe.

More analytics, more logic and rationality, and I think the traditional world is horrified – what is going to happen to power lunches? And there is this sense that you can’t just buy television based on some sort of algorithm, you have to have some sort of relationship between a buyer and a seller to make that happen.

[to be continued]

[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 7 in the series : Rolling up an Online Ad Agency Powerhouse: AKQA CEO Tom Bedecarre
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