It's decision time for Dentsu but will it go with WPP or B|Com3?
campaignlive.co.uk, Thursday, 25 October 2001 11:50AM
Japanese advertising operates in another dimension, somewhere where the 100-year plan is the norm, clients still embrace the commission system and agencies can work for multiple clients in the same industry, writes Caroline Marshall.
Japanese advertising operates in another dimension, somewhere where the 100-year plan is the norm, clients still embrace the commission system and agencies can work for multiple clients in the same industry. So the effect of Dentsu's partial flotation planned for later this month was always
going to be interesting. The question is, what events will be triggered on the international stage when it goes ahead?
It's indicative of the culture of certainty that colours all Dentsu's decisions that I can still write "when" in that previous sentence. For even with the shockwaves of 11 September still reverberating around and the advertising boom of the past few years coming to a shuddering halt, one can say that Dentsu's IPO will go ahead. As one of the last big, privately held blue-chip companies in Japan, it has an unassailable position with a 24 per cent market share and some 3,000 clients. For such a company, long-term vision is the only vision and
a little global downturn is a mere blip in a long
history of blips and recoveries.
But for a healthy company famed for its stability, Dentsu has been woefully late in boarding the global bandwagon. Elsewhere in the world global ad agencies (for better or, usually, worse when
it comes to creative standards) are mirroring client companies by pushing ahead with mergers and integration. WPP buying Young & Rubicam last year, Interpublic snaffling True North this year... such moves were typical of the past ten years in global advertising where most of the top ten groups were repeatedly involved in mergers and acquisitions activity. In that same period Japan's only large-scale merger was between its number-three agency, Asahi Tsushin, and the number seven, Dai-Ichi Kikaka.
Which isn't to say that Dentsu did not have global ambitions, it just never managed to transfer its expertise outside Japan. CDP did not match up to any of the international networks when Dentsu took an initial stake in it in 1990. Its seven US agency purchases, similarly, remained imperceptible and were folded into the network of B|Com3 in which Dentsu purchased an initial stake last year.
And then there's Dentsu Young & Rubicam.
Established in 1981, it was largely unruffled by WPP's takeover of Y&R and, along with B|Com3, it remains one of the two safe pairs of hands Dentsu can use to place business in all over the world.
Now, ever mindful that it must protect those 3,000 clients from marauding global advertising and media networks with a presence in Japan, Dentsu faces a big decision. Does it use the money from its IPO to build its relationship with B|Com3? Or does it commit more fully to the Y&R link and WPP? Funnily enough, as these big decisions in life often do, it may come down to a question of chemistry between Dentsu's formidable head, Yutaka Narita, and B|Com3's Roger Haupt or WPP's Sir Martin Sorrell.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.
This article was first published on campaignlive.co.uk
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