No advertising agency dominates its home market as comprehensively as Dentsu, which controls around 30% of all mass media advertising in Japan and has a staggering portfolio of more than 6,000 clients. Despite the best efforts of its competitors to erode its dominance, it remains almost twice as big as its closest domestic rival. Until recently, Dentsu's influence outside Japan was limited to say the least. In 2000, though, the giant began to spread its wings, backing the merger of Leo Burnett and D'Arcy, and then swapping that stake for a sizeable minority stake in the newly expanded Publicis Groupe in a concerted bid to increase its share of Western advertising budgets. The benefits of that partnership were limited, and it was terminated amicably in 2012. In the mean time, Dentsu had begun to bolster its resources in the US with selective acquisitions. Until recently its biggest success was the purchase of the New York shop McGarryBowen, one of the most admired agencies in the US, which has now expanded its footprint internationally. In a bold new move, Dentsu announced plans in 2012 to acquire Aegis Group, parent to the Carat and Vizeum global media networks. That deal finally completed in March 2013, giving Dentsu a fully global profile for the first time. It has continued to build its profile with additional acquisitions.
Latest news about Dentsu? Click here for recent headlines from Adbrands Weekly Update
Subscribers only: Adbrands profile
Adbrands Company Profiles provide a detailed analysis of the history and current operations of leading advertisers, agencies and brands worldwide, and include a critical summary which identifies key strengths and weaknesses. Adbrands Account Assignments tracks account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets. See also:
The Adbrands Company Profile of Dentsu summarises the agency's history and current operations. Subscribers may access the following website links:
|Dentsu Public Relations||Ad Dentsu Osaka|
|Dentsu Research||Creative Associates|
|Phoenix Comms (Korea)||&c China|
Adbrands Weekly Update 9th Aug 2018: Dentsu jumped to the top of the class with a stellar performance for the latest quarter. Revenues equivalent to around $2.0bn represented impressive organic growth of 5.9% for 2Q. Japan was the key contributor with an exceptional 8.4% lift. The international Dentsu Aegis Network contributed 4.5% overall, including 6.5% in the Americas and 4.8% in EMEA, but only 0.8% in other APAC markets. The group said seven of its top 20 markets delivered double digit organic growth, including India, Russia, Spain and Italy. The US, Brazil and Australia were "strong", the UK "positive", but France, Germany and China all negative. Despite the good topline performance, net profits plunged to a marginal loss as a result of further workplace reforms in Japan and investment in global infrastructure and IT systems.
With only WPP left to report 2Q figures (not until September), here's the current ranking for organic growth (or decline) in 2Q. Dentsu 5.9%, Interpublic 5.6%, Omnicom 2.0%, MDC -1.7%, Publicis -2.1%, Havas approx -4.1%.
Adbrands Weekly Update 24th May 2018: Ads of the Week "Everyone Is A Key". Identical-looking crowds are a long-established pop-cultural meme in Japan. (The span dates back at least as far as techno group YMO's 1980 album Multiplies, all the way up to the Glico ad we featured here earlier this year). It's not too surprising perhaps; many Western visitors to Tokyo may have felt they experienced something similar in real life. This startling spot from Dentsu is for tech giant NEC's Bio-IDiom digital identification system, and has some fun choreographing a troupe of 40 girls all with the same face, thanks to 39 identical prosthetic masks.
Adbrands Weekly Update 17th May 2018: Dentsu reported organic growth for 1Q at the higher end of its peer group. Net sales came in at the equivalent of almost $2.1bn, representing organic growth of 2.1%. However operating profit fell sharply as a result of continuing workplace reforms in Japan, and net profit plunged by almost 31% to the equivalent of $99m. Dentsu's domestic business managed growth of 1.9% while the international Dentsu Aegis Network notched 2.2%. Strong performance in the Americas (4.6%) and EMEA (up 2.7%, despite declines in Germany and France) offset weakness across the rest of Asia ex Japan (down 2.9%, as strength in India and Thailand wasn't enough to compensate for problems in China).
With all figures now in, here's the final standing for 1Q. IPG leads with 3.6% organic growth, followed by Omnicom (2.4%), Dentsu (2.1%), Publicis (1.6%), MDC Partners (1.0%), WPP net sales (negative 0.1%) and Havas (negative 1.7%).
Adbrands Weekly Update 3rd May 2018: WPP took the final steps to end a long-established partnership between Y&R and Dentsu in Asia. It bought out the Japanese group's shares in several Y&R and Wunderman units in South East Asia, as well as in healthcare agency Dentsu Sudler & Hennessey in Japan. In return, WPP surrendered its own shares in Dentsu Y&R and Wunderman Dentsu in Tokyo. Now wholly owned by Dentsu, they are rebranding as Dentsu e3 and Dentsu Direct Solutions respectively.
Adbrands Weekly Update 15th Feb 2018: As usual, it was a game of two halves at Dentsu, with opposing performance between the group's domestic and international divisions. For most of the past couple of years, one unit - usually international - has delivered strong organic growth while the other - usually domestic - has been weak. It was the other way around for the final quarter with Dentsu Japan up 5.5% organic as a result of the heightened activity surrounding the Tokyo Motor Show in 4Q. Dentsu Aegis Network on the other hand managed only 1.2%. That evened out at 2.8% growth overall for the final quarter, narrowly lifting the full year into the black at just 0.1%. However, reported gross profit was up by over 11%, boosted by more than 30 acquisitions during the year. The final figure came in at the equivalent of around $7.8bn with net profit of $940m. The group warned that it expects a sharp decline in profits for the current year as a result of continuing investment in reforms of its domestic working environment in order to prevent excessive overtime by employees. That follows the tragic suicide of an over-worked staffer in 2015, and the subsequent investigation of Dentsu by labour regulators.
With all the groups' results in, final scorecard for organic/LFL growth/decline for 4Q is as follows: Interpublic +3.3%, MDC +3.3%, Dentsu 2.8%, Publicis +2.2%, Omnicom +1.6%, WPP revenues +1.2%, WPP net ex pass-throughs -1.3%, Havas -2.1%. For the year, MDC +7.0%, Omnicom +3.0%, Interpublic +1.8%, Publicis +0.8%, Dentsu 0.1%, WPP revenues -0.3%, Havas -0.8%, WPP net ex pass-throughs -0.9%.
see full profile
see full profile
see full profile
see full profile
Dentsu was founded in 1901 by journalist Hoshiro Mitsunaga as a news wire service to cover Japan's war with China. Denpo Tsushin (or Telegraphic Service) filed war reports to newspapers, who paid by donating free advertising space which a separate company, Nippon Koukoku (Japan Advertising) sold on to clients. In 1907 the two businesses were merged as Nippon Denpo-Tsushin, shortened to DenTsu, and Mitsunaga was able to secure exclusive rights to syndicated material from US news service UPI. This power allowed him to negotiate even more favourable advertising rates from newspaper clients. In 1925, to instil a fighting spirit, Mitsunaga initiated a tradition, leading his entire team of employees on a hike up Mount Fuji to Japan's highest peak, some 12,400 feet above sea level. That same climb is still re-enacted with near-sacred devotion every year, although nowadays only selected employees join the expedition. Only for four years during World War II have Dentsu employees not made the climb.
In 1936, Dentsu was forcibly annexed by a Japanese government keen to control the flow of news reporting in and out of the country, and it was merged with state-owned rival Domei. After intense negotiation, Mitsunaga was granted permission to spin out both companies' advertising divisions as a separate unit, although Domei remained the controlling shareholder. However the advertising business was overshadowed over the next eight years by war, first with China and then with the United States and other Allies. At the end of the Second World War, Domei was broken up to form two new news bureaux, Kyodo News and Jiji Press, who between them shared control of Dentsu. Sadly, Mitsunaga did not live to see the post-war resurrection of the business. He died in 1945.
A new president, Hideo Yoshida, was appointed in 1947. He had served in the company's advertising department before the war, and had been greatly influenced by American marketing techniques. A brilliant organiser, he recruited former government officials and military officers as well as members of Japan's best-connected families to oversee a massive expansion of Dentsu's operations. Most significantly of all, he almost singlehandedly led the introduction of commercial broadcasting in the country, investing in several of the start-up networks and establishing extensive production facilities within Dentsu to churn out first radio and then television programming, and forcing clients to transfer their budgets from traditional forms of newspaper and poster advertising into these new media. As a result, the company came virtually to control the domestic networks. At one point during the late 1950s, Dentsu handled as much as 60% of all television advertising, and Yoshida himself sat on the board of directors of no less than 20 broadcasting companies. Crucially, he was able to persuade clients to overlook the fact that Dentsu worked for their rivals as well, splitting the accounts of Honda and Nissan, for example, or Toshiba and Matsushita between different floors or buildings.
This immense power earned Yoshida the nickname of "Oh Oni" or "big demon". (It was a reputation he enjoyed. In 1960, he told Time magazine, "If I am the big demon, then my men will have to work like little demons.") Another key skill was to persuade rival companies The huge increase in earnings allowed Dentsu to establish its first overseas office in New York in 1960. Other outposts followed in Bangkok, Chicago, Los Angeles, Paris, Melbourne and Taiwan. Two years later the agency established a joint venture with Young & Rubicam. Although this initially foundered, it was resurrected in 1981 as Dentsu Young & Rubicam. In 1975, Dentsu joined forces with General Electric to create Information Services International Dentsu, a global IT services consultancy. (GE subsequently sold its shares when the business issued an IPO in 2000).
Further joint ventures with Y&R followed in 1985 with the formation of healthcare agency Dentsu Sudler & Hennessey and direct marketer Dentsu Wunderman Direct in Japan. There was a brief liaison with France's Eurocom in the late 1980s, subsequently dissolved when Eurocom became part of Euro RSCG, and also a partnership with PR agency Burson Marsteller. In 1990, Dentsu bought UK agency Collett Dickenson Pearce.
Dentsu finally woke up to the competitive threat posed by its international rivals in 1999. Although the company had worked hard to expand its overseas operations in the 1980s and 1990s, virtually all of its revenues still came from Japan. With admirable foresight, Dentsu announced plans to renounce its private status in 2001, its 100th anniversary, with an IPO. The agency promised to use the resulting funds to mount a global expansion drive, in particular to boost its US profile. More significantly still, in 1999 the group took the plunge into the global mainstream, backing Leo Burnett's takeover of MacManus Group with $400m for a 20% stake in what was briefly marketing services group BCom3. In 2000 Dentsu announced several new partnership deals. In the first, the agency formed a joint venture with telecom group NTT to develop and sell advertising for the hugely successful i-mode service operated by NTT's DoCoMo mobile operator. The following year the group increased its presence in the US, taking a 10% stake in Harmonic Communications, a San Francisco-based internet ad effectiveness firm chaired by former USWeb/CKS founder Mark Kvamme, and also acquired small ad agency Oasis International. It also bought a 40% stake in Sony's inhouse agency in Japan, Intervision, with plans to help build the business into a broadband communications and marketing agency. (It was later renamed Frontage).
In early 2001, Dentsu confirmed that it would proceed with its IPO before the end of the year. As promised two years earlier, Dentsu's IPO went ahead in November 2001. The group offered around 20% of its equity for free-float, raising around $325m in cash and valuing itself at $4.7bn. A few months later, the group gave its blessing to the acquisition of BCom3 by Publicis. The Japanese company paid a further $500m to end up with a 15% stake in the combined business. See full profile for current activities
All rights reserved © Mind Advertising Ltd 1998-2018