Dentsu eyes international growth

27 July 2009

TOKYO: Dentsu, the Japanese advertising holding company, is aiming to increase its annual revenues in Europe, the US and Latin America by 10% over the next five years, and is also interested in making acquisitions in the UK.

The Tokyo-based firm has recently announced its new medium-term management plan, which covered the period to 2013, and focused on areas including boosting its capacity to generate consumer insight and developing its digital operations.

According to Tim Andree, president/ceo of Dentsu's American operations, "investing in creative agencies in the United States is finished, and I am happy with where we are."

In the last three years, the marketing services conglomerate has reduced the share of US revenues attributable solely to its Japanese clients from 85% to under 50%.

Last year, it bought the New York-based ad agency mcgarrybowen, having previously taken over Attik, based in San Francisco, in 2007.

However, Andree said revenue growth will now be driven by organic improvement, and by expanding "our digital capability as well as our traditional media capability in Europe and America."

By contrast, "in the UK right now, I would suspect that one of our potential strategies will be to acquire companies so that we can get some scale to our operations quickly," he continued.

As part of its new approach in the country, Dentsu is rebranding cdp-travissully as Dentsu London, and opening a new Attik office in the British capital.

Jim Kelly, co-founder of Rainey Kelly Campbell Roalfe, has also been appointed as chairman of the newly-formed Dentsu UK, and as the first ever regional director for Dentsu Europe.

Kelly's responsibilities will include establishing the company's European headquarters, which will be based in London and oversee the holding group's operations in Brussels, Dusseldorf and Milan.

Masato Araki, an analyst from Mitsubishi UFJ Securities, said he would be "very curious" as to how Dentsu would boost its revenues by 10% without making acquisitions in the US – such as Microsoft's Razorfish – and outside the UK.

"The overseas M&A situation is tough because all the major firms are looking to buy prominent agencies. But if Dentsu succeeds in buying Razorfish, for example, then that would be a big plus," he said.

Data sourced from Livemint; additional content by WARC staff