No global ad empire rivals the world’s biggest agency, Japan’s Dentsu.
Stefano Hatfield talks to its boss, Yutaka Narita
The Dorchester on a mild autumn morning. The suite is full of Japanese
agency managers, but it is immediately clear who’s the boss. The man
holding out his meiji (business card) to me is not just any old big
cheese. The card reads ‘Yutaka Narita, president’. In the rigidly
hierarchical structure of the largest Japanese advertising agency,
Dentsu, Narita-san is the boss of bosses.
There is no fast track to this position. A glance at Narita’s CV proves
this is not the career path of your average leading Western adman.
Narita joined Dentsu in 1953 and has been there ever since. It is the
only company for which he will work.
It was not until 1977 that he had his first experience in ‘account
service’; not until the age of 54 that he was appointed managing
director. His ‘promotion’ in 1991 from senior managing director to
director of account service administration says much about the latter
role.
Since 1993 he has been president, succeeding Gohei Kogure. Three years
ago Kogure cancelled an interview with Campaign in Tokyo to attend an
urgent client meeting. There he was told Dentsu was to lose its dollars
76 million share of the Nissan account to Hakuhodo, the first
significant client move in Japanese agency history. The recession was
beginning to bite. Things would be different.
But not that different. Dentsu has just reversed a three-year downward
trend in revenues and a four-year slip in profits by announcing income
of dollars 2 billion and a net profit of dollars 71.5 million on total
billings of dollars 13.7 billion. It has a roughly one quarter share of
the Japanese market, a figure unimaginable here.
After our interview, Narita attended the European Management Seminar
presented in association with the Dentsu Institute for Human Studies.
That evening Dentsu threw a lavish party at the Imagination building.
Guests of honour included Baroness Thatcher and Gary Lineker. Their
presence at the party is explained in part by Dentsu’s determination to
help secure Japan the 2002 World Cup.
There are not enough pies in the world for all of Dentsu’s fingers.
Highlights of last year alone include sponsorship and other services
around World Cup USA and the 12th Asian Games, an enormous campaign
behind the opening of Kansai International airport, and the 1,200th
anniversary celebrations of Kyoto being named Japan’s national capital.
Clearly, Dentsu must look at the British advertising industry’s leap on
to a bandwagon called ‘integration’ with bemusement. Dentsu has always
been integrated; in 1986 it went so far as to formalise a commitment to
‘total communication service’. One third of Dentsu’s income is from non-
traditional media.
In truth, Dentsu can be as integrated or otherwise as a client wants.
The one thing that a client is guaranteed above all, however, is the
protection of confidentiality. In Tokyo alone there are 18 sales and
marketing divisions. Each stands alone as an individual company in its
own building.
Narita explains: ‘The mobility rate of Dentsu employees is very low. In
the West, employees move from company to company. It is partly down to
the cultural context. Also, in global terms, the Japanese advertising
market alone is relatively small. Therefore the highest- quality human
resources tend to be found in a very few high-quality companies. As long
as we stick to our golden rule [protecting confidentiality] clients will
choose us.’
Dentsu goes a lot further than its Western counterparts in what it
regards as the boundaries of client service. Hence Thatcher and Lineker,
and Dentsu’s unique position via its ISL sports marketing subsidiary.
Dentsu believes it is incumbent upon itself to help Japan win the World
Cup, not least so that its clients, through ISL, can enjoy the event’s
sponsorship opportunities.
Watch out too for future partnerships with both hardware and software
manufacturers in developing technologies for the digital era. Narita
believes that Japan, despite its domination in hardware technologies, is
behind the US in software.
Pressed on his views on CDP Europe, its comparative lack of a proper
network, and his future plans for CDP and Europe, Narita stresses that
he believes CDP UK, under the ‘new’ leadership of Ben Langdon, is
performing well. But by implication, Narita damns CDP Europe, which
currently lacks agencies in the crucial German, French and Italian
markets.
‘A container or hardware without contents or software is not going to be
of significance,’ he says. ‘We are currently considering the future of
the network. It depends on client needs as well as the human resources
required. Even if we acquired a network it will not be meaningful if
that acquired entity is not able to provide high-quality service.’
Dentsu may believe there is no group worth buying in Europe, having got
its fingers burnt with both Young and Rubicam (via the HDM venture) and
CDP. However, there is a lingering suspicion, which Narita does little
to dispel, that having a network at all is a defensive measure. Is it
there primarily to stop yet more Japanese clients using Western
agencies, and giving Dentsu’s rivals a potential foothold in the
Japanese market?
Dentsu seems surprisingly worried about the possibility. But while
Dentsu will never succeed internationally until Japanese clients start
awarding more business to Japanese agencies globally, its Western rivals
will not succeed in Japan if they do not understand the fundamental
ethical differences.
Asked about the Maurice Saatchi affair, for example, Narita says much by
what he doesn’t say: ‘Saatchi is a great leader. But one genius will not
suffice. Advertising requires the wisdom of a team of people of
different backgrounds and ideas. The concentration of wisdom in the team
is the reason we have been so successful.’
Could that integrated team system be imported here?
‘If the Japanese client of CDP requires ‘total communication service’
then the British employee will be most happy to provide that service.
Advertising is in transition. CDP can clearly provide the marketing mix
now required.’
Langdon, while lamenting the lack of genuine leverage with Japanese
clients the Dentsu relationship brings, says: ‘Dentsu does integrated
communications better than anyone else; it provides a genuine commitment
to the highest levels of client service - not just a sop; and for a
local manager, I am far better able to plan long term than with American
bosses. Dentsu had a vision, so we’ve had time to turn the business
around.’
Peter Travis, the managing director of Dentsu’s other London agency,
Travis Sennett Sully Ross, adds: ‘Dentsu has brought a method of account
handling that is highly responsive to client needs. It’s about being a
partner. If you’ve worked on business for 30 years, you really
understand it.’
If the British admen sound almost Japanese, then Narita remains
unequivocally different from the heads of Western agencies. In an open
and frank interview, he was puzzled by only one question: ‘What are your
personal ambitions?’ He consulted the translator before making the most
telling of all his replies: ‘I want to foster Dentsu to become an agency
that is trusted by clients all around the world and make it an
organisation where our employees can have fun and be optimistic.’
He meant it too.
The Narita file
1929 Born in Tokyo
1953 Graduated from Tokyo University, Faculty of Law.
Entered Dentsu Inc - regional newspaper and magazine division
1964 Manager of regional newspaper and magazine division
1971 Director of newspaper and magazine division
1977 Account service. First experience of working on international
accounts, notably Nestle
1981 Appointed as executive director of Dentsu Inc based in account
service administration
1983 Appointed managing director
1989 Appointed senior managing director
1991 Director of account service administration
1993 Appointed president of Dentsu Inc
Narita’s CV is anathema to most people in the West. Dentsu, his employer
for 42 years, is the only company for which he will ever work. Note his
’91 promotion.
