TOM BEDECARRE, AKQA: Facebook's Going To Suck Up A Huge Percentage Of Ad Revenue

Tom Bedecarre

Back in 1999, Tom Bedecarre was kicking himself for missing out on linking the future of his San Francisco advertising agency to the Internet.

Turns out he didn’t miss much at all. A genial man with plenty of interesting things to say — the CEO of AKQA has more than 106,000 followers on Twitter to attest to that — Bedecarre over the past decade gradually remade a traditional advertising agency into what is generally recognised as the world’s largest independent digital marketing and technology firm. AKQA now has 1,000 global employees, serves leading clients including Audi, Heineken, Nike, Target, Visa and Xbox, and uses mobile apps and games as important advertising channels.

Dubbed “Silicon Valley’s favourite adman” by Fortune magazine, Bedecarre nevertheless shot and missed when he tried in the late ’90s to interest Google (GOOG) into advertising its new search engine. But things have come full circle. Google now uses AKQA to provide advertising support for YouTube, something Bedecarre calls “a terrific assignment.”

Bedecarre recently sat with this newspaper for an interview, which has been edited for length and clarity.

Q: Is advertising becoming more like entertainment?

A: Most of our work is managing search campaigns or mobile campaigns, or mobile apps or online advertising, but we also do TV, print, radio advertising. I just think most people I know are turned off by a lot of advertising and try to minimize their exposure. I also think of something a famous ad guy from years ago in San Francisco, Howard Gossage, said. “People read what interests them, and sometimes it’s an ad.” I think that same thing is true about online: People go to watch and do things online and on their mobile devices that interest them, or entertain them, or inform them. And if you’re doing that inside an ad, that’s great. But if you’re not interesting or informative or entertaining, people aren’t going to watch you, and they are going to turn you off or zone you out.

Q AKQA does some things that aren’t traditionally thought of as advertising, like creating smartphone apps and social games. Can you share an example?

A A couple of years ago, we had a very small budget to help launch a model for Volkswagen in the U.S., the GTI. That didn’t have a big TV budget because they had a smaller number of cars they needed to sell. And we said let’s create a racing game that’s an iPhone app, a free download, and we cannot only offer a fun racing experience where you can customise your own Volkswagen GTI, but you can also then find a local dealer, and get a test drive, all through this app.

It was a huge success. I know it had more than 6 million downloads; it was the number one gaming app in something like 36 countries when it was launched. Their test drives and showroom visits were all up something like 80 per cent, and that was all based on a game.

Q: Does being a startup yourself help you in Silicon Valley?

A: I think a certain type of client is very comfortable with a more entrepreneurial company. We do a lot of work with Nike, and they are very entrepreneurial-led, from Phil Knight on down. They love our DNA and our culture. And then there are giant international companies, like a Unilever, where we have a very tough time connecting, because we aren’t the safe, global, 100,000-employee network that has an office in 150 cities around the world.

Q: You pitched co-founders Larry Page and Sergey Brin to become Google’s first advertising agency back in the late ’90s. Can you tell that story?

A: They were in their first office on the other side of 101. I remember them having a very crude TV monitor out in the lobby that was streaming a live feed of what the searches were. We had a chance to meet Larry and Sergey, and when the VP of marketing made his pitch, their question wasn’t whether we were the best guys for the job. It was, “Why would we advertise?” Which at the time sort of stumped me for a quick comeback.

Time showed they were right that they could sell the search product without advertising, but I think as the company has grown and has so many products and so many competitors, there are some categories where they are No. 1, and some where they are not No. 1. In the most recent years they have seen the benefit of bringing in outside help to shape a marketing or sales image. We’re lucky to be one of the agencies they’ve looked to for help.

Q: Do you see Facebook as an unstoppable advertising juggernaut?

A: You would have said that about Yahoo (YHOO) maybe 12 years ago; you would have said that about Google a few years ago. I think they are incredibly powerful, and still have a lot of headroom to grow. They may be the largest display advertiser (in impressions), but their percentage of inventory viewed versus the advertising sales is still rather small, so they still have a lot more monetization to go.

If they were to get their fair share, I think something like 30 per cent of all ad impressions online are delivered by Facebook, and I know they are not 30 per cent of the revenues. So I think that delta between where they are now, and their share of eyeballs, if you will, means they are going to grow to a huge number. I’m very bullish on Facebook.

Tom Bedecarre:

Job: CEO of AKQA, the San Francisco-based global digital marketing and technology firm.

Education: Stanford University, bachelor’s degree; MBA from Kellogg School of Management, Northwestern University.

Professional: Founder and CEO of Citron Haligman Bedecarre, a leader in launching Internet brands, which ultimately grew into AKQA through a series of acquisitions and mergers.

Family: Married; has twin daughters and a son.

Five things about Tom Bedecarre

1. Fourth-generation Californian; family came to San Francisco 125 years ago

2. Avid military history buff, expert on D-Day and Normandy Invasion. Twice attended D-Day anniversary on Omaha Beach with World War II veterans

3. Among first 1 per cent of registered users on Facebook and LinkedIn

4. Leads global marketing executives on Silicon Valley pilgrimages to Facebook, Google, Twitter, LinkedIn and other companies

5. Proposed to wife on Madison Avenue after learning she was born at Stanford Hospital

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