Be that as it may, Hakuhodo has since closed the sizeable gap that once separated the two contenders, enough to make Dentsu very nervous. Indeed, HDY represents the first serious challenge in a long time facing Dentsu, enough to prompt the Japanese giant to flex its muscles anew. As industry insiders tell Media, the world's largest agency is on the warpath in Japan.
It now charges after every piece of business in a market where client conflict is rarely an issue.
What Dentsu does to further control the Japanese marketplace is of course fascinating reading. But the action is increasingly moving overseas, trailing the shift in Japanese investments into China. Understandably, the hot money is on China emerging as the next battleground between Dentsu and its international rivals. The same ones who have yet to make significant headway in Japan and are now not about to play second fiddle in China, having invested heavily there.
Can an agency with limited international experience replicate its domestic success in China? Despite this obvious chink in its armour, it's worth noting that Dentsu has as many strengths as weaknesses in China. Its mainland model is typically over-serviced and price-led in much the same way Dentsu operates in Japan. Operating by Dentsu's handbook includes setting up its staff in client offices, having rep offices in remote locations such as Chengdu and going in at a loss in media in order to build up long-term client relationships. Equally, Dentsu has been quick to hire people with connections and in bringing their influence to bear where it matters.
But with agencies forced to become more accountable and ROI-focused on behalf of clients, the company's weaknesses may require nothing short of a reinvention of the Dentsu way - unless China tilts towards its price-led model - if the agency giant is to succeed outside Japan. Here is an agency that has long depended on its clout to steer media negotiations and made its cash from media. Given this leverage, Dentsu has tended to neglect developing systems, tools and training for qualitative planning and buying of media. At the same time, its limited international experience hampers its ability to present case studies and learnings to clients.
Dentsu has also yet to reckon with the Japanese factor in a market that is still prickly about Japan, as the Toyota incident amply showed - which could mean another hurdle for Dentsu in contending for the top spot.