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Dentsu Aegis Network North America

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Japanese marketing giant Dentsu operates in North America through several subsidiaries, most of whom were for many years largely reliant on Japanese clients. All that has changed since 2008 when Dentsu kicked off a series of bold acquisitions in North America (and elsewhere), starting with highly regarded New York agency McGarryBowen. That deal effectively doubled the Japanese group's US revenues, and was followed by several other purchases including digital agencies 360i and Firstborn. Together these agencies have transformed Dentsu's North American presence and paved the way for the parent group's subsequent purchase of Aegis. Dentsu's North American operations now fall under the umbrella of Dentsu Aegis Network.

Clients

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Brands & Activities

Dentsu's North American operations now fall under the overall umbrella of Dentsu Aegis Network, the parent entity for all agencies outside Japan. The biggest change to Dentsu's North American profile since 2008 has come through a series of smart acquisitions, starting with McGarryBowen, which has now become the group's most important advertising brand outside Japan.

It was followed in early 2010 by the acquisition of digital agency 360i. (That company's satellite units IgnitionOne and Netmining were sold back to management in 2013). 360i is best-known as a specialist in search marketing and social media, but increasingly also offers other creative and consultancy services. A London outpost opened in 2013 in partnership with local agency Steak (also owned by Dentsu), as well as offices in Canada and Brazil. It is best-known as a specialist in search marketing and social media, but increasingly also offers other creative and consultancy services. Researcher Forrester ranked 360i as one of three market leaders in US search marketing in 2011, and as the overall leader in 2012 by quality, although it ranked lower than other agencies in revenues from search. It was named as Digital Agency of the Year in 2013 by several trade media outlets including Adweek and OMMA. In 2011, the group added digital creative agency Firstborn in New York, and it kicked off 2013 with a deal to acquire PR agency Mitchell Communications, which is becoming the core of a new global PR network. AdAge estimated revenues of $155m for 360i in 2014, including $143m in the US; and $30m for Firstborn.

The aquisition of Aegis later in 2013 added a large collection of additional agencies to the local portfolio, not least media agencies Carat and Vizeum, and a collection of digital and diversified marketing agencies such as Isobar, Team Epic and iProspect. Event marketer MKTG was acquired in 2014.

Until this expansion, the traditional flagship of Dentsu's US presence had been Dentsu America, formerly DCA Advertising. This continued to operate as a separate office for several years, mainly handling local work for Japanese clients, primarily Toyota and Canon. In early 2012, Dentsu America also absorbed New York independent ML Rogers for an undisclosed sum. However, Dentsu America was itself eventually absorbed into acquired agency 360i in 2014. In 2007, Dentsu America acquired Attik Advertising, a digital and design agency in San Francisco best known for its work on Toyota's niche brand Scion. Following the closure of Dentsu Next (formerly Colby & Partners) in 2009, this became the main West Coast presence for mainstream Dentsu business. However, following the loss of the Scion business in 2014, this too was shuttered in 2015.

Dentsu also operates in Canada. In 1995, Dentsu acquired a 50% stake in Cadence, a small independent founded and run by Albert Barbusci. The business was renamed DCC Communications in 1997, and two years later the Japanese company bought out Barbusci's 50% share. The named changed again in 2005 to Dentsu Canada. The agency is primarily dependent on Japanese clients, among them Toyota, Lexus and Canon. In 2012, the group acquired Montreal independent BOS, which merged with the existing business under the new name DentsuBos. Longtime Dentsu Canada CEO Bob Shropshire left to start his own agency soon afterwards. In 2013, an outpost of digital agency 360i opened in Canada, under DentsuBos's roof. Perhaps the most significant deal to-date in Canada was the acquisition of admired independent Grip at the beginning of 2016.

Background

DCA Advertising was originally formed as a New York-based service office for the main Dentsu agency in Japan in the early 1960s, but underwent a series of transformations over the following years. During the 1980s it became the US office of Dentsu's joint venture with Young & Rubicam after the latter acquired a 50% shareholding. In 1987, Y&R pulled out, backing The Lord Group instead as the US base of Dentsu Young & Rubicam. As a result Dentsu then put further resources into DCA, recruiting a mostly American team to supplement what had originally been a largely Japanese-born staff. But the shop still struggled to add non-Japanese clients to its portfolio. For a while during the 1990s it became Dentsu Corporation of America, before once again reverting to the DCA tag. In 2004, DCA absorbed separate Dentsu-owned agency Oasis Advertising, also based in New York. The name changed again in 2006 to Dentsu America, at which point it became the group's main North American operation.

Dentsu Next, formerly Colby & Partners, traditionally provided the agency's West Coast presence until its closure in 2009. Based in Los Angeles, it was originally the local office of The Lord Group. In 1996, Dentsu bought out Y&R's 50% share of the agency and renamed it Rogge Effler & Partners, but performance slumped dramatically, as the agency lost some $70m in accounts in a matter of months. Rick Colby was recruited from a rival local shop to strengthen the team (as Colby Effler & Partners), while another Dentsu-owned independent, Hajjar & Partners, was merged into the main agency, becoming satellite unit JSM Communications. Shortly afterwards, chairman Don Effler moved away from the business to become head of the Dentsu Business Development Group, New York. The agency officially dropped Effler's name from the masthead in 2001. In 2003 the shop ended up a surprise winner following the closure of the Publicis-acquired D'Arcy Worldwide network. Several accounts and staff were transferred out of D'Arcy's Los Angeles office and into Colby in a trade-off between Dentsu and Publicis. However, the departure of Rick Colby in 2007 led to a restructuring of the business. It was renamed as Dentsu Next, serving primarily as the group's conflict shop, handling Suzuki and Sharp. However, the Suzuki cars account was lost in 2008. As a result, Dentsu Next was shuttered at the beginning of 2009.

Dentsu's US operations were thrust uncompromisingly into the general news headlines at the end of 2007 as a result of an embarrassing lawsuit filed by Steve Biegel, formerly a creative director at Dentsu America. Almost a year after his dismissal, apparently for performance issues, Biegel claimed that the real cause had been that he refused to participate in various sexual shenanigans organised by his boss Toyo Shigeta, Dentsu's regional director for North America. Allegedly, these included a trip to a brothel in the Czech Republic and naked dips in a Tokyo bathhouse. According to the lawsuit, Shigeta got angry with Biegel for declining to take part in these activities, and criticised him for being "no fun". Biegel also alleged that Shigeta used his position to take inappropriate photographs of women's crotches including, on a photo shoot for client Canon, one of tennis player Maria Sharapova. The legal submission also implied that Dentsu discriminates against Jewish employees. Dentsu responded with a threat to countersue Biegel for libel and fraud, not least because, seeking publicity for his cause, he had already sent a draft of his submission to Dentsu's two biggest US clients. Although the agency stopped short of denying the stories about Shigeta, it pointed out that Biegel didn't complain about these incidents at the time - most of them took place in 2005 - and had worked up the story in order to make an excessive claim for severance pay. However a request that the case be dismissed was overruled by a US court in early 2008. The two sides eventually settled for undisclosed terms in summer of that year.

Last full revision 12th January 2016

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