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Media Dentsu Group

Dentsu successfully retained client accounts worth $4bn after 2015’s ‘mediapalooza’

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By Seb Joseph, News editor

February 15, 2016 | 3 min read

Dentsu has hailed its defence of accounts worth $4bn in billings last year for its ability to get through a testing period with more of its business coming from outside its heartland of Japan.

The business was able to retain accounts for brands such as Mondelez, Coca-Cola and the Department of Health following a spate of unprecedented media reviews in 2015. That flurry of reviews also saw the agency network pick up new business last year worth 3.6bn in billings, with Honda among the more high-profile advertisers to move its media business over to the Japanese network.

Those gains throughout 2015 helped bolster Dentsu's network outside of Japan; more than half of the group’s profit (54.3 per cent), its proxy for revenue, in the nine months to December came from outside of its domestic market, fuelled by double-digit growth in China, Thailand and Hong Kong. The rise was up from 50.7 per cent the previous year.

As a result of the one-time nine month reporting period, both Dentsu's earnings for its financial years of 2015 and 2015 have been calculated on a pro-forma basis to allow for like-for-like comparisons.

Consequently, Dentsu posted gross profit of ¥761,996m, up 12.6 per cent year-on-year for the nine month reporting period. Organic growth for the year, which is based on gross profit, for the business was 7 per cent.

Three key businesses drove that growth – digital subsidiary CCI through its programmatic buying business; IT subsidiary ISID through its development of systems for financial institutions; and promotional subsidiary Dentsu Tec through business associated with large-scale exhibitions and government policy measures.

Moving forward the business said it would continue to funnel its digital spend into programmatic, mobile and online video, particularly across social media networks. Part of this expansion will be funded by acquisitions, alongside internal initiatives formed to scale its expertise. The group already has a digital marketing centre in Japan that’s sold to advertisers as a total package spanning all digital channels that can plug into other parts of the business.

“In 2015, the third year of our medium-term management plan ‘Dentsu 2017 and Beyond,’ we continued to make steady progress in delivering on our strategic objectives, while producing another peer group-leading performance,” Tadashi Ishii, president and chief executive of Dentsu Inc., said:

“Looking ahead, in addition to further growth in the Group’s core Japanese market, we will leverage our extensive global network to its fullest potential in order to contribute to the growth of all our clients. We will continue to invest in our business, particularly in integrating our digital capabilities, to ensure we take advantage of the opportunities that will arise in an increasingly fast-paced digital economy. With this in mind, and supported by our continued focus on our strategic objectives, we expect to continue outperforming the market in the year ahead and beyond.”

Media Dentsu Group

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