Wendy Clark, CEO of dentsu’s business outside Japan, says her pitch pipeline stands at US$5 billion.
And 72% of the pitches are offensive. “We like that mix and blend,” Clark told analysts in a briefing following dentsu’s announcement of March quarter results.
Dentsu upgraded its outlook for the year after posting a 9.1% lift in organic growth for the March quarter. The result is in line with other global advertising groups -- WPP, Omnicom, Publicis Groupe and Havas -- reporting better than expected March quarter results.
The global advertising group’s Australia business reported 12% organic growth with continued recovery with new client wins across media, CXM (customer experience management) and creative.
Clark, who joined dentsu in 2020 from DDB Worldwide where she was CEO, says both the pipeline and the value of pitches is up year-over-year versus this time last year.
CXM is showing strong growth and is now more than a third (36%) of dentsu’s international’s revenue.
Clark: “We’ve just seen all the right indicators; our pipeline and both our pitch performance for Q1 this year versus Q1 last year is a stronger performance and showing steady and improved trajectory.”
CXM is up 18% versus pre-pandemic. In the US, dentsu’s second largest market, CXM is seeing double digit growth.
Dentsu has also expanded its business with current clients.
The top 20 clients grew by 15% in the March quarter.
"So we do very well on expanding our existing relationships with our biggest clients, like Microsoft, P&G, GM and others," says Clark.
“We actually just notified a very big one on Friday, which I can't talk about, but exciting news coming within the growth of our existing base, which, of course, is significantly cheaper and more efficient for us to expand our existing revenue with existing clients.
“We have a 70% conversion rate locally. These pitches don't tend to get some of the bigger headlines but … being able to convert local revenue is core to our business proposition, and a 70% win rate feels good.
“So far this year, our media conversions stand at about US$600 million, and that's on track with our plan. So all in looking at the pipeline, at the prospects, we feel very confident as we sit here at the end of Q1.”
Clark says her team is in constant conversation with clients.
“And obviously, these are times where we need to be partnering and understanding the challenges they may be seeing," she says.
"There has been increases in both tech and finance in CPG and pharma. We're seeing resilience in those categories.
“I think there's been some reporting on autos scaling back, but we have not seen that. In fact, in the US, our two largest auto clients are growing.
“Media will always naturally be more sensitive to upturns and downturns in particular markets.
“As you know, our clients can switch that on and off, and so we do see some sensitivity around that. And you saw a little bit of that in our EMEA numbers, from the impacts of the war, particularly.”
She says gaming and health are seeing strong uptake.
“Our health practice is now a top five network. I mean it just launched within the last two years.
“We're a top five global network with an extremely robust pipeline. So I think those verticals and the investment in those verticals are also helping our resilience.
“As to the pitch pipeline, you know that we are under lots of NDAs on those, so I can't actually validate, but you would know that we are participating in all of the usual suspects globally.”
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