One of the more enduring images of the past year was the head of a
Japanese investment house crying in public as he admitted responsibility
for its imminent collapse. Still, one man’s misfortune is another man’s
profit. Step forward the WPP boss, Martin Sorrell, who this week swooped
to take advantage of the continuing malaise in Japan, acquiring a 20 per
cent stake in its third-largest agency, Asatsu.
Actually, it was more interesting than that. Simultaneously, Asatsu
announced an agreed takeover of Dai-Ichi Kikaku, Japan’s seventh-largest
agency. This makes Asatsu a firm number three with a 6 or 7 per cent
market share, and a serious challenger to the hegemony of Japan’s big
two: Dentsu and Hakuhodo.
What’s more, Asatsu takes a 10 per cent share of the Japanese offices of
J. Walter Thompson (14th-largest agency in Japan) and Ogilvy & Mather
(26th). WPP’s pounds 103 million investment in Asatsu will be
reciprocated, giving the Japanese agency 4 per cent of the UK group’s
Why am I telling you all this? Well, for a start an announcement
concerning a joint media planning and buying venture between Asatsu and
MindShare is imminent, bringing the prospect of a genuinely global media
outfit that much closer. As one analyst said this week: ’You can’t
really call yourself global unless you’re in Japan.’
Also, here’s a snapshot of the Asatsu/Dai-Ichi Kikaku client list:
Mitsubishi Trading, IBM, Unilever, Nikon, Suntory, Pepsi, Kellogg,
Warner Lambert, Toshiba, Shiseido, NTT, Sega, Seibu, Pioneer, TDK,
Kirin, Asahi, Cartier, Dunhill and many more.
Perhaps older lags will quietly roll eyes skywards in the knowledge that
both Dentsu and Hakuhodo have enjoyed only qualified success in
channelling their clients around their international operations. But an
association with WPP is different. There’s no doubting the strength of
its two major agency brands around the world. And if no new business
flows as a result (which I doubt very much) then at least it will serve
to consolidate existing WPP client relationships.
If anyone should doubt that, then you only need look at
McCann-Erickson’s experience in Japan. Fourth in the marketplace when it
enjoyed a joint venture with Hakuhodo, it has now struggled back to
ninth since the two separated. That still makes it the most successful
western agency in Japan without an affiliation. No western agency will
get much bigger on its own.
Having said all this, the previous experience of Japanese agencies
overseas doesn’t exactly send fear coursing through the veins. But
estimates are that the Japanese ad industry will recover in two years’
time (just as we’ll be gripped by recession). We can’t say that we
haven’t been warned.