Dentsu Creative (DC) didn’t exist yet at the start of 2022 and no other agency underwent more change or had more of a transformative year than it did. A longstanding objective of parent holding company Dentsu Group has been to integrate dozens of different agency brands into five main hero agencies and, ultimately, one Dentsu.

The emergence of Dentsu Creative last year was the biggest move in this direction to date, finishing the job that DentsuMcgarrybowen (DentsuMB) started in 2020, amalgamating 62 Dentsu creative agencies outside of Japan into one brand. DC now houses what used to be DentsuMB, 360i, digital experience specialist Isobar, and the remaining independently-branded creative shops like Taproot, Impact and Webchutney in India. 

As a result, it’s a very different beast with many new leaders from the Dentsu and Isobar we judged last year, hence the *asterisk on the 2021 grade (both Dentsu and Isobar received a C+ letter grade, with a combined adjusted average 7.2 score). Previously, we’ve graded Dentsu’s Japanese business along with its creative shops across APAC which hasn’t been easy.

While the company has signalled the end of Dentsu Japan and Dentsu International, the two haven’t worked out exactly how the businesses will come together. Since DC was introduced in 2022 as a distinct global agency brand borne out of the International division, we’re treating it separately while acknowledging its need and desire to tap into its Japanese cultural roots and technological know-how.  

Now together with Isobar, DC has become one of the world’s largest creative agencies, with just under 5000 employees across APAC, bringing it much closer in scale to a juggernaut like WPP’s Ogilvy. Like many amalgamations, DC’s aim is to be able to solve their clients’ biggest needs and desires under one roof, which is always easier said than done. Doing it successfully requires committed leadership, clarity on goals and structure, cohesive teams with diverse skills and a culture that binds employees and clients alike.

To that end, DC has done a lot of work in laying out its vision with three main goals for clients (create culture, change society and invent the future) under the overarching theme of modern creativity, drawing inspiration from Japanese craft in a new visual identity. It has also put a lot more work into attracting a diverse and modern creative workforce.

All that’s missing so far are more examples of tangible results in business performance and retention as a result. In short, Dentsu Creative appears to be on track with a new foundation for success but still needs to truly make it happen.  

Category 2022 2021 (Dentsu/Isobar) Business C+   C+/C+ Innovation B C+/B- DEI and sustainability B C+/B- Creativity and effectiveness B+ B/C Management C C+/B- *2021 scores adjusted to new numeric scale. Read about the grading methodology

Business (C+)

Dentsu Creative’s business performance is a murky picture. On the one hand, Campaign’s Advertising Intelligence tool using data from R3 shows that Dentsu and Isobar have improved in the APAC creative rankings, with $40 million in recorded net revenue for Dentsu and $7.7 million for Isobar, good enough for 4th and 14th place respectively, compared to Dentsu’s 10th position in R3’s creative table last year. 

Key wins in 2022 included sizable accounts like Kmart in Australia and PepsiCo in China and Taiwan, while new creative mandates from the likes of Junlebao Dairy in China and LinkedIn in India will allow the agency to pursue more technology-driven work. While DC claims to have had no significant losses last year, it did see creative project work from the likes of Toyota and Suntory in Thailand and Coca-Cola, Honda and RHB in Malaysia shift elsewhere. 

AOR accounts no longer provide a full picture, especially since Dentsu is making a push globally to move beyond advertising to provide more brand transformation and customer experience services. This is where Isobar is focused and Dentsu Creative expects the amount of experience and design thinking-type work to grow to about half their business from roughly 30% currently.  

But the DC business, as newly constructed, has no prior statistics to compare to and for this reason the agency declined to provide even rough revenue and profit figures. Group-level published financials for guidance don’t report at an agency market level. What we do see from Dentsu’s full 2022 results is weaker performance in Asia, with strength in India offset by weakness in China, where Dentsu really struggled, as did others, in 2022.  

Without key comparables, we’re keeping this grade ‘average’ at C+.   

Innovation (B)

By positioning itself as the destination for modern creativity, Dentsu hopes to own this category, which is entirely possible if it can harness Isobar’s power of digital experiences alongside Japanese craft and design prowess.

In 2022 DC focused on applying and enhancing a number of wider capabilities in Asia-Pacific, such as Dentsu on Demand to scale content, Dentsu Insights for strategic planning, Dentsu Gaming to build fandoms or Dentsu Z to reach Gen Z consumers in China. These are worthy investments but aren’t remarkable for a network of DC’s size.  

Where it did differentiate itself was in purpose-led space by setting up its Dentsu for Good sustainability accelerator in APAC. We also appreciate Dentsu’s move in June to set up a new governance structure for its indigenous social change agency, Cox Inall Ridgeway to ensure majority ownership by First Nations staff. Not all innovation must be technological. 

On the technology side, however, we did see the creation of Dentsu VI (pronounced VEE-eye), a new market-first practice that creates virtual influencers and new experiences for brands in the metaverse. Supplemented by its ‘Moon Valley’ metaverse campus in collaboration with Microsoft, where clients can test out metaverse ideas, Dentsu would like to be a leader in the space.

However, aside from some interest from big brands like Manulife, Coke and Toyota, we haven’t yet seen Dentsu clients commit heavily to VI, which may prove even tougher as the metaverse hype subsides.  

For its size, Dentsu’s innovative showcase is good but not yet great. The grade, however, is bumped up to very good by the innovative application of technology in its creative work (see below).

DEI & Sustainability (B)

The above grade will surprise many, as Dentsu has struggled on the DEI front, largely due to persistent gender inequality in its Japanese business, while its international agencies like Isobar fared much better.

While this Dentsu Creative assessment excluding Japan still trails most multinational agencies in this area, with 36.5% of women in senior management, it has clear goals (50% by 2025 versus 25% in Japan) and plans to conduct a gender pay gap audit in 2023. It has also set up a new full career development and practical upskilling programme for women called Path of Tabei, named after the first woman to scale and descend Mt. Everest.  

But we’re also seeing greater effort to build on existing DEI programmes like Inspiring Inclusion, by setting inclusive culture goals within the performance goals that leadership is accountable for. Employee Resource Groups are actively holding workshops, awareness sessions and support networks around allyship, intersectionality, mental health, LGBTQ+ experiences, while individual offices are opening more opportunities for the disabled and benefits packages to more employees.

On top of this, it has actively partnered with groups supporting First Nations in Australia and New Zealand. In short, Dentsu’s work on culture outside of Japan is on a much better path, hence a major upgrade here, in addition to stellar sustainability efforts.  

Dentsu has enjoyed a strong reputation for sustainability, being one of the first companies in the world to have its net-zero emissions targets approved by the Science-Based Targets Initiative in 2019. How well is it meeting those targets? 

Within two years, it cut key emissions by 53% and met its 2030 targets nine years early. Now, it’s resetting new aggressive goals for 2040, including cutting absolute emissions by 90% across the entire value chain and has been independently verified carbon neutral by PAS 2060 standards.   

Creativity & Effectiveness (B+)

DC’s overambitious goal is to redefine modern creativity by creating culture, changing society and inventing the future. It sounds far-fetched, but if you already look at this year’s work, there are already steps in this direction, even if the work predates the agency. 

From the KFC Metaverse Fried Chicken Store in China, to Yahoo’s Metaverse Co-Creation Lab in Taiwan, to the Hello, Good Day mobile games for the elderly in Thailand, we see technology being applied creatively to affect change.  

Then there’s Vice's Unfiltered History Tour, created by what used to be known as Dentsu Webchutney out of India. The guerilla tour of the British Museum using AR Instagram filters presented an alternative view of history that peeled back colonial narratives around stolen artifacts, taking audiences back to tell their stories in the lands of their origin.

It's brilliant work, well deserving of the avalanche of awards it earned, including 19 Spikes and 12 Cannes Lions, including 3 Grand Prix and the coveted Titanium. More importantly, the millions of views and impressions have changed mindsets, with post-campaign surveys indicating more pressure to return more artifacts to their homelands. It’s hard to top work like this - easily the most lauded out of APAC, contributing heavily to the excellent grade here.  

The question now is whether the considerable freedoms afforded to local shops like Dentsu Webchutney in past to create such great work will continue in the next Dentsu Creative era. 

Management (C)

This grade is not an indictment of Dentsu’s new management. On the contrary, new APAC CEOs Cheuk Chiang (Dentsu Creative) and Rob Gilby (Dentsu Group) appear to be working hard at resetting Dentsu’s strategy, culture and offering, giving them a strong chance of raising the management grade next year. But the work has not yet been proven or stress-tested and we cannot hand out top grades on potential. 

We do like the work done to expand training offerings like Game Changing Talent, Dentsu University and Young Innovators Workshop in addition to the DEI programmes above. Given Dentsu’s past work culture struggles and launch of a new vision, one would expect to see more than incremental gains in their annual employee check-in survey. Turnover is said to have dropped 10% from 2021 although actual figures are not provided.  

Certainly, among management, the churn did not stop as Dentsu’s revolving door continues to top our annual look at leadership entrances and exits. At a global level, Wendy Clark’s departure was a shock and disappointment to many, as were the exits of APAC Creative CEO Phil Adrien and APAC chief creative Merlee Jayme.

For the second straight year, we saw large-scale leadership changes in their growth market of India, including changes at its award-winning agencies there. This is the third straight year of wide-scale management instability across the region.  

Finally, although Dentsu Japan’s operations are not directly graded here, as the company merges its Japanese and international management teams, we’d be remiss not to throw up a red flag around the severe ethical lapses currently being investigated around the Tokyo Olympics bid-rigging scandal involving the arrests of key former Dentsu executives.

Not every global Dentsu agency is responsible for those bad actions, but there should be more clarity and decisive messaging in every part of the company to be better. 

Entertainment Earned creativity Experience (virtual, gaming)  Brand transformation  Strategy (brand, experience, content & social)  Production Integrated solutions (media, CX, modern creativity) *The agency declined to provide a business breakdown by %. Earned creativity Entertainment Experience Ajinimoto American Express Kangshifu (KSF – Master Kong) Kao KFC (Yum Brands)  Honda Manulife Toyota Unicharm Volkswagen  B: It’s been a transformative year for Dentsu Creative, moving from 62 brands to one and achieving our most successful year at Cannes, winning 3 Grand Prix and the coveted Titanium.