With the creation of Dentsu Aegis Network, Japan-based Dentsu Inc. that has dabbled on both sides of media donned the avatar of a ‘network’. Tim Andree, executive vice-president and board member of Dentsu Inc. and executive chairman of Dentsu Aegis, says Dentsu Aegis Network is in the business of ideas and creativity only. A financial institution or not, the merger with Aegis is working wonders for the agency that recorded over 54 per cent revenue from its international businesses in 2015 compared to 5 per cent it had in 2005. Excerpts:
Q. Now that Dentsu Aegis Network is set up in India the way the business model was designed to be, what are some of your key expectations from the business?We have had a great 2015 so far — globally and in India — with some very big wins coming our way including the likes of Mondelez and MTS recently. This momentum in the business can be attributed to our new business model, under which we expect to grow two to three times more than our peer group. Because we have remained acquisitive, we have seen more than 20 per cent overall growth — 10-11 per cent of which was organic. We have been acquisitive in India. We see it as a market of extreme importance to our global clients.
With our new business model, we want to gain relative strength in areas of media, such as outdoor and experiential that will help us continue our momentum. We will continue to develop our creative product. Our global strategy, where we focus on digital and scale in areas that serve our clients better, will reflect in India. The performance in India has been uplifting, and it is going to remain top of the list among faster growing regions that punch over their weight in the media world from a talent perspective.
Q. One was hoping that Dentsu would do to TapRoot what it did to McGarryBowen in the US. However, three years later TapRoot has yet not scaled up Dentsu’s creative product?TapRoot is the beacon of creativity in the region for us. The objective is not to scale but to serve clients with high capability. The big expectation from TapRoot is to take a leadership role and uplift the creative bar for our network. We have now christened it Dentsu’s TapRoot and hope that by creating a creative community and mentoring young professionals, the rising tide will lift all boats.
Q. Before the merger (with Aegis Group in 2012), Dentsu preferred to be “nimble with global scale”. How has that changed now?We are still executing the soft elements of the acquisition. We had over 16,000 Aegis employees in 110 markets to assimilate in the Dentsu world. The operating model has become a competitive advantage as it allows people to work together around client goals. Since 2012, Dentsu Aegis Network has generated $12 billion in net new media billings. We could achieve this because we did not have legacy systems of a holding company where people compete against each other in a silo mentality. We are a new organisation where people like to work. The strategy has been validated by our performance, and accelerated by the acquisitions that we continue to do.
Q. What are going to be some of your future growth areas?The focus on higher value areas of digital like social, mobile and e-commerce will continue. Dentsu has always operated on the nexus of media, technology and content. We will continue that focus. Another critical area is data. The industry will have to focus not only on data created from digital media but also first party data, and how we can get a data platform that all our agencies can use to drive better efficiencies. Finally, focus on solutions such as programmatic and marketing technology that are only going to grow in a world of digital fragmentation. We are preparing ourselves, our organisation and clients for the future.
(This story was published in BW | Businessworld Issue Dated 30-11-2015)
