16 March - 24 April 2020

Our online festival is underway with a packed programme of interviews and panels. Featuring talks from the industry’s biggest brands and most innovative individuals, this event explores what digital transformation really means for marketing.

Coming Up
9 Apr 14:00 BST / 09:00 EST

Digital Transformation Download: Q&A with author Kate O'Neill

Stephen Lepitak
Editor at The Drum
Kate O'Neill
Founder at KO Insights

Dentsu confident it can 'conquer' network challenges amid 7.2% 2018 revenue bump

Dentsu confident it can 'conquer' challenges on top of rises 7.2% 2018 revenue

Dentsu has reported organic growth of 3.4%, bringing in 1,018,512m yen in 2018 revenue, up 7.2% on 2017. Company president and chief executive Toshihiro Yamamoto said “2019 heralds a new stage” for Dentsu.

The 117-year-old Tokyo-based holding company, which counts marketing agencies like Carat, iProspect, Isobar, mcgarrybowen and Merkle among its stable, performed above expectations, despite what Yamamoto described as “challenging market circumstances”.

He said: “We have achieved our organic growth targets both in Japan and the international business, driven by growth in digital activities. 2019 heralds a new stage for the Dentsu Group.”

Driving this, Yamamoto claimed, was the group’s “focus on people-driven marketing” and its differentiation using “innovation, technology, data and analytics”. After noting new business wins in 2019, he added: “I remain convinced we are well positioned to remain leaders in our industry and will conquer any and all possible disruptions going forward. I will make every effort to ensure that we remain unwavering in our commitment to deliver best-in-class services to all our stakeholders.”

On the call was former Dentsu Aegis Network chief executive Jerry Buhlmann who serves as a special advisor. Buhlmann said: “We've built a very strong competitive global network, with a track record of our performance, an exceptional management team, which I think has continued momentum. Now that's borne out in the latest results.”

For 2019, the group forecasts a 7.9% increase in revenue less cost of sales and a 4.3% increase in underlying operating profit. In 2018, it boasted 16 acquisitions. Nine in EMEA, five in the Americas and two in APAC, making it the most active network in the space.

Back in August, its chief executive Toshihiro Yamamoto said it has to make itself fit for "an evolving market and changing client needs". This is a trend present across the industry.

It comes a day after US network IPG upped its net revenue to $8.03bn in 2018 from $7.47bn. IPG chairman and chief executive Michael Roth said it “demonstrates the strength of the company”. It took a knock after losing Fiat Chrysler Automobiles media accounts after a decade, however.

Paris-based Publicis Groupe's results were not quite as rosy. Citing recent struggles in the United States, its chief executive Arthur Sadoun last week told shareholders to expect a "bumpy ride" as it suffered "revenue attrition" from US FMCG brands.

Last month, Dentsu cut 2% of its Singapore workforce in pursuit of agility. It comes as it reported in the APAC region (excluding native Japan), a 1.7% decline in organic growth. It would be unlikely to make a dent in its 60,000 global staffers however.

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.