In this two-part series, Dentsu Aegis Network's CEO Henry Tajer takes AdNews through his first six months in the role, the challenges the holding group has faced and his plans for its future. If you missed part one, head here.
Dentsu Aegis Network (DAN) ANZ CEO Henry Tajer has pointed to a "hybrid model" as the new direction for the holding group in Australia, as he looks to take the fight to consultancies and digital players, not just traditional media.
Speaking to AdNews, Tajer, who stepped into the role six months ago, says the current DAN business needs to shift its attention to growing and developing its portfolio of companies outside of traditional media and creative shops.
Pointing to Merkle, Accordant, Amicus and Isobar, the new holding group boss believes the success of DAN is investing further in acquiring businesses that can compete with professional services firms such as Deloitte, Accenture and PwC.
"Over the next 12 to 18 months, I really see Dentsu emerging as the hybrid in the marketplace and we've already got several businesses that rarely compete with any other holding company but instead are going up against the consultancies," Tajer says.
"Increasingly as our profile and our portfolio changes, the types of organisations that we are competing with to grow the revenue of the overall business are increasingly skewing away from our traditional holding companies."
From his short time with the business, Tajer says a lot of the exciting opportunity he has seen come out of DAN has been through recent acquisitions such as Amicus Digital and NZ-based consultancy Davanti.
These parts of the group will increasing become more valuable as it drives engagement with big digital players such as Salesforce and Adobe.
"What I find interesting is when I look at the action around acquisition and companies being brought into the holding groups, it's sort of slow going. I feel fortunate that we are a little bit ahead of our traditional competitors in that space," Tajer says.
"We've got Accordant, Davanti, Amicus and we'll have some other businesses in the next six to twelve months. We're going to continue that pace and we're going to expand that into other tech data platform types of businesses. It's going to set us aside from the rest of the industry."
"Other groups may say they have these capabilities and be jumping on-board to bring them into their offering but I'm not sure they understand exactly how to utilise them."
Tajer says having the consultancies as direct competitors is a fantastic opportunity for DAN, as he believes it will keep everyone "on their toes" because the consulting firms are "great operators".
"They know what they're doing and they have a point of view on our shared clients from a different perspective," he says.
"We're getting a better handle on that perspective which gives us a much broader lens into our clients, eventually making us a more meaningful partner.
"As we do that and at the same time leverage what we've just launched in Dentsu Solutions and get better at curating those capabilities around clients, then I see us being in a unique position where we don't have an obvious competitor and I love that."
Simplification
According to Tajer, one of the biggest factors in rebuilding DAN for the future is simplification.
He says he and the new leadership team will be "dogmatic" about streamlining and restructuring parts of the business that may have become confusing to clients.
One part of that has been the previously reported integration of Amplifi's media buying back into its respective media agencies.
However, it won't stop there. Tajer says everything needs to be looked at, which will lead to some areas of the business being modified.
This has recently included the company's closure of its government division and the subsequent departure of long-time DAN executive Nick Swifte.
InvestDirect@DAN, a recently launched small to medium enterprise division remains in operation, however is also going through a re-assessment as part of the ongoing changes within the business.
"There were a number of things that were talked about in the past that have come to fruition. There are some things that companies talk about what they don't end up executing," Tajer says.
"The government sector and the small to medium enterprise sector, they are parts of the industry that we are already engaged with. Moving forward, do we feel we need to create an established area? At the moment, no."
Tajer says this doesn't mean that DAN won't look to draw on other capabilities that could see the business look to specialise in other verticals. However, this is unlikely for at least 12 to 18 months.
Not ruling out anything, he says any new sector of the holding group that could launch will really need to be "sweat out and examined effectively" and that he would not be making any snap decisions to offer something that didn't make sense.
"I can also see some areas in the business that as we probably get into 2020 and beyond we'll probably test and trial, but this goes both ways, it could mean finding new avenues of revenue or restructuring existing divisions to become more effective," Tajer says.
However, what about media?
While Tajer says that the business will look to focus less on the "traditional media" side of the business, many questions still linger on what the future of DAN's core agencies will look like.
He says despite key account loses, which have included Super Retail Group, Virgin Australia, Asahi Beverages, the AFL and The Good Guys, the media division still as a "viable place" in the market.
However, a major part of his strategy is to take the focus off Carat, Vizeum and Dentsu X, stating that despite media only making up close to 40% of the overall business and its revenue, it somehow gets close to 100% of the attention.
"At a broader group level, we're still one of the largest operations from a media perspective. We're still one of the largest groups in the market and the reason why that is the case is because of the clients we have," Tajer says.
"Yes, we've lost some clients and that has an impact on our volume but the clients we have lost has not taken us to a point where we're no longer a viable proposition in market. We're still one of the biggest groups in the marketplace."
Tajer says that while some of the accounts that have moved out of DAN over the past six months have been due to simple pitch loses, there is another set that has been relinquished.
He says the relationships that the accounts were originally based on, he found to no longer be sustainable as the business undergoes its rebuild.
"We've had - believe it or not, as difficult as some of the account losses have been -- there have been some accounts that we've had to resign as well because they just didn't make sense," Tajer says.
"Some people thought I was crazy but if we have a principle in what we do and we want to set a course of action that is about our behaviour, there's never a good time to start and there's a never good time to finish."
Tajer expects before the year is out that the media side of the business will be headlining some wins. DAN's largest media agency, Carat, has already pulled off a huge $50 million account retention recently, securing clients Medibank and AHM.
"The challenge has been and what we're going to take on moving forward is ensuring that when we do speak in market, we're not just talking about one part of the business all the time," Tajer says.
"We're talking about the collective and at the right time, we will showcase the collective through bringing it all together and revealing it to clients, partners and the press."
No more fear - embrace change
Tajer says one of the biggest challenges will be getting people to embrace change and understand why the change is needed.
He says the company has been open and the leadership team has had a really "healthy open dialogue" with the entire organisation.
Tajer says he noticed in the early stages a "fear to speak".
"There was an element of fear that was prevalent. I don't like to work for someone who makes me fearful. I don't feel I should have to be fearful. I think that's a little bit disrespectful to be quite honest," Tajer says.
"What that does is hold not only an individual but a business back. As an agency, you need to be able to speak and to challenge ideas.
"Now we get together as a company as a whole on a pretty regular basis and we have a no holds barred. You can ask any question of anyone and you'll get an answer type environment. That I think has been important to remove fear from the organisation and the fear of questioning leadership. Something I see as really creating a new environment as we look towards the future."
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