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When the news broke of Wendy Clark stepping down as the global CEO of Dentsu International, many of her former colleagues and industry peers weren’t surprised. A chief executive of an Indian independent ad shop on condition of anonymity tells Storyboard18, “It’s a circus at Dentsu. It’s about time the company looks up the thesaurus and replaces the word transformation.”

Wendy, who is regarded as the most respected female agency leader in the global advertising circuit, joined Dentsu International on 1 September 2020. Prior to that she was the Global Chief Executive of DDB, the Omnicom-owned creative agency. She was a marketer at Coca-Cola too. A senior Indian executive who has worked with Wendy says, “She isn’t the most responsive CEO I have worked with.” In fact, last year, when Denstu India was massively hit by people issues, she didn’t respond to queries that were sent by several senior executives from India. “Her silence made things clear for many us. We were left with no option but to look for opportunities outside,” says the former senior creative director of an India digital agency that Dentsu owns.

<strong>Clark’s report card</strong>

Under her leadership, the company delivered revenue growth of 17 percent, growing organic revenue for the first time in nine quarters, and along with long-held operating profit margin target of 15 percent for the first time in six quarters. For the five quarters since then they had sequential revenue growth and on-target margin delivery, wrote Clark in a LinkedIn post while announcing her exit.

At Cannes Lions this year, Clark made an official announcement of the creation of Dentsu Creative as the company’s lead creative agency network and her vision to set up “One Dentsu” strategy that would bring Dentsu Japan and Dentsu International’s businesses closer. So much so that in three months, the Japanese have decided to do away with its international CEO role. Dentsu is the world’s fifth largest agency group with about 65,000 staff. The international business outside Japan employs around 45,000 people.

During Clark’s tenure, the network also went through an accelerated ‘transformation’. This massively hit Dentsu International’s operations globally and in India. A series of leadership changes, consolidations and dissolutions of agency brands has been happening, especially in India, over the last one year.

Few ad agencies have witnessed such drastic changes, in a short span at that, as Dentsu International and its India base, triggered by a raft of reasons ranging from the pandemic slowdown to restructuring to internal audits at units over alleged malpractices. Storyboard18 was the first to report on this.

A former senior leader of Denstu agency says, “Clark got in the American way of leadership. The brutal slice down of operations and head count could have been dealt with better. The Japanese didn’t particularly like this approach.”

<strong>End to an adventurous strategy?</strong>

In 2021, at a group level, Dentsu Group, decided to bring its existing set of shops under six go-to-market agency brands ― Carat, Merkle, dentsu X, iProspect, Dentsu mcgarrybowen and Isobar. In India, the network had 23 brands under its umbrella ― Isobar, Webchutney, WATConsult, Fractal Ink, Design Studio, Posterscope, Milestone, Brandcom, Fountainhead MKTG, Hyperspace, Brandscope, Taproot Dentsu, Dentsu India, Dentsu One, Dentsu Impact, mcgarrybowen, Perfect Relations, Indeed, The Storylab, Dentsu X, Vizeum, Carat, SVG, Merkle Sokrati, and iProspect. An industry veteran, who has worked with the Dentsu Group closely, says, the network was “adventurous” with it acquisition game. “Dentsu overvalued a lot of its acquired creative shops. The thing is creative agencies’ popularity doesn’t last for long. They are in news when they make a viral campaign or win big at Cannes Lions. After that, they fade out. Very few companies that Dentsu India acquired were generating sizable businesses,” he adds.

In a latest development, the network announced its transition to a new globally integrated leadership structure. Effective January 1, 2023, Dentsu group is making the following changes. The company will shift from operating through two business units — Dentsu Japan Network (DJN), and Dentsu International (DI) — to a global ‘One Management Team’ structure, with business operations conducted in four regions — Japan, Americas, EMEA, and APAC. The ‘One Management Team’ will be led by president and CEO Hiroshi Igarashi. Dentsu group will globally integrate each of its corporate functions to build a common management platform. On September 15, 2022, Dentsu group will launch a dedicated Integration Office to drive a seamless transformation process.

Agency heads that Storyboard18 spoke to are of the opinion that with the constant tweaks in plans and strategies by the company is confusing and is not tangible. What the new structure will bring in is a better “reporting structure”, says an Indian CEO of Dentsu’s rival company. “The Japanese understand the value of client relationships like no one else in the business. With whatever has happened in India, and now globally, one thing is clear ― the Japanese are going to hold tight and hopefully make the right decisions for good, especially for India, that picked the ‘Agency Of The Year’ title at Cannes Lions this year,” he concludes.



Will Dentsu Group’s ‘One Management Team’ fix its image crisis?

Dentsu International’s CEO Wendy Clark is reportedly stepping down, multiple international reports stated. 

Storyboard18 reached out to the company for a statement but did not get a response at the time of filing this report. Clark took charge of the Japanese-owned advertising network on 1 September 2020. Prior to that, she was the global chief executive of DDB, the Omnicom-owned creative agency. Wendy is regarded as the most respected female agency leader in the global advertising circuit. She was previously a marketer at Coca-Cola. 

At Cannes Lions this year, Clark made an official announcement on the creation of Dentsu Creative as the company’s lead creative agency network and her vision to set up “One Dentsu” strategy that will bring Dentsu Japan and Dentsu International’s businesses closer. Under her leadership, Dentsu Creative Bengaluru went on to win Ad Agency of the Year at Cannes Lions 2022 – the first time a Dentsu agency won the prestigious award. Dentsu is the world’s fifth largest agency group with about 65,000 staff. The international business outside Japan employs around 45,000 people.

Under Clark’s leadership, the network also went through an accelerated ‘transformation’. This massively hit Dentsu International’s operations globally and in India. A series of leadership changes, consolidations and dissolutions of agency brands has been happening, especially in India, over the past year and a half.

Few ad agencies have witnessed drastic changes in a short span triggered by a raft of reasons ranging from the pandemic slowdown to restructuring to internal audits at units over alleged malpractices.

As it happens, the exits are bad PR, ironic for a company that is in the business of communication, senior agencies heads of rival networks. While Dentsu International’s big ambition is also to simplify its structure, the effort is “confusing and complicated”, according to agency insiders Storyboard18 spoke to. It’s been a year and Dentsu International India is still on the hunt of a CEO. Interestingly, Robert (Rob) Gilby takes charge as CEO APAC, Dentsu International, on 5 September 2022.

A former senior leader of Denstu agency observes, “Clark got in American way of leadership. The brutal slice down of operations and head count could have been dealt better. The Japanese didn’t particularly like this approach.” 


Is Wendy Clark leaving Dentsu International?

Advertising in India is set to grow at 16 percent in 2022, led by key sporting events and elections, said a report by Dentsu International. At 16 percent growth, India will stay ahead of the US - projected to grow at 12.8 percent, according to the report - and Brazil (9 percent) as the fastest growing market.

According to the most recent Dentsu Global Ad Spend Forecasts, India is predicted to have an increase in advertising spending of 15.2 percent in 2023 and 15.7 percent in 2024.

Globally, advertising spending would increase by 8.7 percent in 2022. Ad spending in Asia-Pacific is anticipated to reach $250 billion, with digital accounting for much of this amount. Forecast indicates that the Asia-Pacific advertising market will increase by 3.9 percent to reach $259.7 billion in 2023 and a further 4.7 percent in 2024. Looking ahead, Dentsu expects the 2023 global advertising market to increase by 5.4 percent to reach $778.6 billion followed by a further 5.1 percent increase in 2024.

The overall ad spend growth in Asia-Pacific is boosted by key sporting events such as Indian Premier League, FIFA World Cup, Beijing 2022 Winter Olympics and Paralympics, and country elections in Australia and India.

Prerna Mehrotra, CEO Media APAC, Dentsu international, said that this year, India (+16 percent), Malaysia (+11 percent) and Hong Kong (+10 percent) have all achieved double-digit growth.

“Digital continues to drive growth accounting for 60.7 percent of all spending in Asia-Pacific with social, video and search predicted to lead digital growth. Advertisers increase focus and resources into e-commerce, display, and search budgets to respond to the new consumption habits. Use of first party data to identify the most profitable customers, combined with third-party data to target the prospects in the most efficient channels will help drive efficiency and manage costs,” she notes.

Meanwhile, the report stated that forecasted spending on advertising in China is expected to rise by 4 percent in 2023 and 5.4 percent the following year.

The reforecast of media investment is released in the context of escalating media price inflation, geopolitical tension, upcoming key elections, and one of the most anticipated global sports events of the year, the FIFA World Cup. Due to continued uncertainty, the current and historical comparison data has also been adjusted to remove Russian investment from the forecast, to better reflect the rest of the international ad spend trends and predictions.

The report said that digital continues to be the powerhouse driving APAC ad spend, as the fastest growing medium at 11.5 percent to reach $151.7 billion, a 60.7 percent share of total ad spend. Fuelling this is the double-digit growth of Programmatic (32.3 percent), Paid Social (27.4 percent), and digital display (13.3 percent) in 2022. In SEA, TV spend is still significant, with the largest share (57.2 percent) of total SEA spend (Indonesia, Singapore, Malaysia, Philippines, Thailand and Vietnam), and a growth rate of 4.6 percent.

Globally, Out-of-Home (OOH) and cinema will both see encouraging double-digit growth in 2022 (respectively 11.5 percent and 19.6 percent). Radio is also forecast to grow, much faster than initially considered with a new reforecast of 5 percent for the year, up from 2 percent in the January predictions – which is mainly due to faster return to office working. As with previous predictions, ad spend in newspapers and magazines will continue to decline.

In 2022, the Americas will be the top ad spend region at $329.6 billion and the most dynamic with spend increasing by 13.1 percent. India at 16 percent growth will stay ahead of the US at 12.8 percent and Brazil at 9 percent as the fastest growing market.

Industry wise globally, the greatest growth is forecast for the technology sector (+11.3 percent), which has benefited from people’s greater reliance on digital devices. Retail is one of the key sectors of spend growth at a rate of 11 percent in 2022. The sector is driven by a number of factors including the significant growth of e-commerce, the entry of new players, and the introduction of emerging retail platforms. In Asia-Pacific, technology, automotive and cosmetics and personal care are among the fastest growing sectors.

Peter Huijboom, global CEO, Media and global clients, Dentsu international said that even with everything which has happened in recent months, not least the protracted war in Ukraine and its international repercussions, the advertising recovery remains strong on a global scale.

“And, despite factors such as inflation putting pressure on household budgets, combined with 2021 being a tough comparative year, we have only marginally revised down our 2022 global growth forecast by just 0.4 percentage points. Despite global economic uncertainty, brands are continuing to prioritise their spend in channels which will give them both the digital-flexibility and return they seek,” he adds.

DENTSU INTERNATIONAL