Dentsu, following the failure of its strategy to grow via acquisition, is switching to a platform of dreaming big, concentrating on Japan and the US, and fixing its underperforming international business with a focus on media.
The company’s Japan business continues to grow, up 5.5% in the March quarter and better than forecasts, with the organic growth rate now positive for eight consecutive quarters.
However, Dentsu’s international business stays stubbornly negative. In the March quarter, organic growth in the Americas fell (5.1)%, EMEA (0.9)% and APAC (4.6)%.
The global advertising group reported negative revenue growth in Australia for the year to December.
“We rise to the ever-evolving needs of our clients and partners by dreaming big and loud,” the company said in a strategy document, Integrated Report 2025.
“We take businesses to unexplored territory and everyone of us is invited to join. Thinking small is for other people. Let’s celebrate audacity.”
Its last Mid-Term Management Plan, running to 2024, focused on growth through M&A. “However, challenges emerged due to incomplete integration and lagging business portfolio realignment,” dentsu said.
“At the same time, changes in business challenges and the competitive landscape, as well as an external environment in which taking a people-centered approach is increasingly required, have significantly impacted the effectiveness of our existing growth model.”
Hiroshi Igarashi, who was appointed CEO in January 2022, said dentsu has formulated a new plan to achieve both competitive advantage and profitability.
“To regain our competitive edge, we will shift our focus toward becoming a growth partner for clients in each market, driving global expansion,” he said.
“By concentrating resources in Japan and the US, we will build a successful model for delivering Integrated Growth Solutions (IGS) -- comprehensive offerings tailored to client needs.
“At the same time, we will work to restore profitability by swiftly addressing underperforming businesses and implementing ongoing cost efficiencies.
“In the next-generation growth area, we will expand our distinctive business model in Sports & Entertainment across key markets and strengthen our portfolio of intellectual property-driven businesses.”
The company says 2025 will be a big year for its international business under the new Mid-Term Management Plan, which covers the period up to the 2027 financial year.
“The core strategy of the plan is to realign our business portfolio and refocus our capital and people into priority businesses to restore our competitiveness,” Igarashi said.
“In our International business, 2025 will be a critical year for achieving our strategy, as we strive to regain profitability and competitiveness by reevaluating underperforming businesses and rebuilding our business foundation.”
The strategic focus: A network that wins globally by growing locally.
“In our International business, together with bolstering our presence in the US, which has large revenue potential and diverse business assets, we are also executing a flexible strategy that leverages the unique characteristics of each region.
“We will focus on the media business and areas that lead to added value, which are the starting point for our Integrated Growth Solutions (IGS).
“We are placing particular emphasis on next-generation advertising tools, including the use of AI and data to disseminate advertising, as well as new forms of retail media linked directly to purchasing behaviour.
“In addition to these initiatives, we are deepening our strategic partnerships with media and platform companies, while integrating our creative work and customer experience management (CXM) to offer complete solutions addressing the specific needs of each client. We are promoting this approach under the name “Media ++ strategy.”
Dentsu values, as per the strategy report: "Not just in the work we do, but as individuals, we approach life with a higher perspective and act with integrity, always. It is in this spirit we share the 8 ways."
Value Creation Model:
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