Which means that any attempt to herald 2009 as the start of a new era for Dentsu's international aspirations is fraught with danger. Many a false dawn has been glimpsed during Dentsu's 30-year struggle to replicate its remarkable domestic success overseas.
Thanks to two significant developments, however, this time things really could be different. In 2008, Dentsu stepped back into the acquisition market, buying the highly rated US independent McGarryBowen. But that move is put in the shade by an even more noteworthy one: the appointment of the Dentsu America chief executive, Tim Andree, as the agency's first non-Japanese executive officer.
Since taking charge of Dentsu's US operations in 2005, Andree has presided over a period of healthy growth, even if it has been obscured by a legal battle between the agency and a former employee, Steve Biegel, that provided many salacious allegations.
If Dentsu is, as its overseas communications manager, Yukihiro Oguchi, insists, still serious about succeeding in the West, it seems clear that Andree's lead will have to be followed in Europe and elsewhere.
"Obviously we are not satisfied with the current situation," Oguchi admits, pointing to the paltry 10 per cent of global sales that its overseas operations account for. "Globalisation is of top priority and it is the strategy we are now pursuing."
It is not difficult to work out why international markets have become so important to the Dentsu president and chief operating officer, Tatsuyoshi Takashima, who is widely credited with focusing the agency's attention on international growth. Domestically, Dentsu had a pretty awful year in 2008, with net income plunging 43 per cent between April and September, and things look equally grim for 2009.
The pressure is on for Dentsu's international markets to start delivering real growth. Andree has been able to treble Dentsu's American revenues in three years, largely by employing the kind of challenger agency techniques employed by small players everywhere - aggressive new-business development coupled with smart creative. In the process, he has turned Dentsu America from also-ran to one of the country's fastest-growing agencies, smoothing the way for the acquisitions of Attik in 2007 and McGarryBowen last year.
"I'm going to approach things far differently than a Japanese ex-pat would and that may have something to do with it," Andree admits. "Also, in the past, the way we operated was total commitment to the Japanese clients without really having a local strategy. Dentsu has always had its overseas strategy tied up with joint ventures and strategic alliances - (and) while those were successful or unsuccessful, they weren't necessarily getting the talent under Dentsu's brand."
For all of this evidence of progress, there is still plenty of reason for unease. Dentsu Europe, for one, remains mired in uncertainty. Last year, Dentsu decided to shut down its European holding company in favour of direct control of its agencies in this region. Bearing in mind the cultural management issues that have dogged Dentsu's attempts to build scale overseas, it is a curious move.
Meanwhile, the agency has also apparently chosen to call time on the ailing CDP brand, in favour of the Dentsu name. The move would make considerable sense, if Dentsu actually confirmed that it will happen. "With CDP, we are constantly monitoring perception of the brands that we own, but currently no central decision has been made to change or rebrand," Oguchi says. "Actually, we would like to further reinforce the Dentsu brand worldwide where applicable, so we will follow a pragmatic approach in line with the situations in respective local markets."
That last statement, at least, demonstrates that Dentsu may at last have realised the potential power carried by its unique brand. "I don't think I would have taken the job if they would not allow me to rename the company Dentsu," Andree says of his decision to terminate the DCA brand in America. "Dentsu is a wonderful company with tremendous traditions, and I believe we should use the Dentsu name."
There is no hiding from the fact that Dentsu is a very different animal from the agency networks that were born in Western markets. Even so, perhaps these differences may yet help the agency prevail overseas. In Japan, Dentsu was originally founded as a media agency and derives its power from its close links with media owners. With Western clients starting to question the wisdom of unbundling, perhaps another of Dentsu's goals - to expand its media operation worldwide - is not as crazy as it sounds.
The agency is actively seeking media agency acquisitions in Hong Kong, India and Australia to achieve this aim in Asia, before setting its sights further afield. After losing out on major global media reviews for Sony, LG Electronics and Singapore Airlines - because of inadequate international media resources - the agency is betting that media might yet offer a realistic avenue for overseas growth, particularly if it remains coupled with its creative offering.
"We believe our close relationships with contents rights-holders/media owners, both locally and globally, enable us to provide clients with unique, holistic, one-stop media solutions," the Dentsu Media network operations manager, Ken Matsumura, says. "Our current focus is Asia. However, we have plans to expand the network to other regions around the world."
International media agencies, understandably, remain unconvinced. "It's an uphill battle whichever way you look at it," one media agency chief says, pointing to the strong competition the agency faces overseas, and a need for transparency and audit compliance that Dentsu may not be accustomed to.
"In Japan, the client has no absolute fix on the financial relationship between agency and media owner," the Group M Asia-Pacific chief executive, Mark Patterson, confirms. "I guess it is about as contrary to the West as you can get."
Even Dentsu's famed ability to negotiate major rights purchases (it owns Fifa's Asian broadcasting rights until 2014), would raise conflict questions overseas. "I don't believe it is a realistic aim, especially if Dentsu tries to go alone and given the current market conditions across the region," the media agency chief adds.
Not that Dentsu necessarily needs to go it alone. It still owns a 15 per cent stake in Publicis Groupe which could offer some opportunities for collaboration. "We have access to them as our option globally, and take advantage of this mainly in local markets where Dentsu's operations are relatively small," Matsumura claims, despite consistent speculation over the health of the relationship.
"I wouldn't say it's rocky but I don't think the Paris guys and Tokyo guys like each other," a Publicis Groupe source says. "There is not much collaboration. If I were Dentsu, I would eat my ego and ask Starcom or Zenith to run Dentsu Media and help them build it. But it's difficult for them - they are not used to collaborating with people overseas. We are, for all practical purposes, competition rather than collaborators."
It all adds up to a sticky set of challenges for the Japanese giant, even while the US offers a realistic route to success. "Flawed acquisitions and management problems have consistently undermined achievement of their goals," the veteran Tokyo analyst David Kilburn admits. "But if Andree can transform their fortunes in the US, it could be a new beginning for them."
A GUIDE TO BEATING DENTSU IN ITS OWN BACKYARD
Such is the might of Dentsu in Japan that it is hard for Western agencies to see it as a competitor as such. With $22 billion in revenues, 15,000 staff and a hand in almost every media deal in Japan, Dentsu makes the rules. "It is the market place," Kevin Ramsey, the regional head of McCann Erickson, the largest non-Japanese agency in Japan, concedes.
Competing head to head with Dentsu is difficult and frustrating. Sometimes you win, most times you lose. But Japan is still the world's second-largest advertising market, so it's one in which every network has to operate. Here are some survival tips for taking on the world's largest advertising agency brand in its own backyard.
Stress international credentials. Dentsu may be indomitable at home, but not so abroad. Agencies have lots to gain by stressing their network credentials to clients with global aspirations. "We have a global network. And we have heritage in building enduring brands. We can be the Dentsu of international expansion to Japanese companies that recognise the need to take their businesses to new markets as their domestic potential recedes," Mark Webster, the JWT Japan chief executive, says. One example is Uni-Charm, the Japanese incontinence pants-maker, which Dentsu handles in Japan and JWT handles elsewhere. Being foreign can also work in pitch situations, especially with international clients. "Dentsu is normally a bit suspicious of international clients as their contracts are big on transparency," one agency source says. "The commission model does not suit international clients these days."
... but show commitment to your host. Japanese clients like agencies that dare to challenge Dentsu's stranglehold. But only with those that are here for the long haul. Agencies such as Ogilvy, which has been in and out of Japan over the past 15 years, are still regarded as new (McCann Erickson, by contrast, has been here for 47 years). "People who come in and say we're here, we're new, and try to change the way things are done get a very cold reaction," John Goodman, the representative director of Ogilvy Japan, says. "We put a great emphasis on our local clients and always stress in creds presentations that of our 400 staff, 380 are Japanese. You don't want to get a reputation for being that foreign agency up the road where people only speak English."
Don't get celebrity obsessed. Hollywood celebrities love appearing in Japanese commercials. They get paid handsomely and the (often excruciating) 15-second spots never air outside Japan. But as tempting as it is to cast Ben Stiller (he fronted an ad for the alcopop brand Chu Hi in 2007), be prepared for clutter. Dentsu is one of many agencies that make star-studded ads, and the same celebrities are often recycled to endorse any number of products. Takuya Kimura, a member of the boy band SMAP, has endorsed coffee, cameras, jeans and handbags. "It's hard to argue against this approach. It is effective," Trish Adams, the managing director of Wieden & Kennedy Tokyo, says. "But we obviously think that communication should be more about finding the unique truth of a brand. Our work for Kuman, Google, Honda and Takata is entirely celeb-free."
Insist on integration. Dentsu is integrated to the extreme. It is a media owner as well as a media, creative and everything-else agency. Its business model, for the most part, is to buy ad space, sell it and make commission on that sale. Which means, its critics say, that it is tempting for Dentsu to sell clients the most expensive medium: TV. So smaller agencies not compensated by commission should push their media-neutral credentials, Adams says. Of course, Dentsu, aware that TV viewership is falling, has steam-rolled into other areas, buying up every media property from mobile space to Second Life real estate. "Dentsu bets on every horse in the race," Goodman says. "Which is why great ideas that cross media are at a premium here."
Get a foot in the door; pitch for projects. The maxim "Nobody ever got fired for choosing IBM" is true of Dentsu in Japan. But Japanese clients want to see more choice in what they consider an uncompetitive market. Most big clients work with Dentsu in some capacity, so the trick is to win a project and get on the roster, Ramsey says. "It's naive to think that Dentsu is weak in any aspect of its business. But it's possible to coexist by defining what you're good at and carving out a position for yourself. McCann introduced media planning and GRP audience measurement to Japan. So we trade off our innovative streak."
If you can't beat them, join them. If Dentsu isn't doing your TV buying, it is likely to be selling you a billboard, or serving you lunch at one of its restaurants in its 53-storey skyscraper. Last year, Carat pooled all of its buying through Dentsu and its local rivals. The Aegis-owned agency also set up an auditing arm to ensure that its clients (which include Softbank, Tourism Australia and Cadbury) were getting what they paid for. "We do the analytics and comms planning. Dentsu or Hakuhodo does the buying. Then we run an audit," Aegis Media's Asia chief executive, Patrick Stahle, says. "Sure, we've put some noses out of joint, but clients find the lack of transparency in Japan frustrating. This is a unique market, and the biggest problem international agencies face is finding a modus operandum that works for them."