Having been unable to enter the running for the regional and global media accounts of Sony and LG at the end of last year, Dentsu is looking to address its lack of media capabilities outside Japan by expanding Dentsu Media, into Hong Kong and Australia.
Dentsu has yet to make a significant impact outside of its domestic Japanese market. The absence of a strong media planning and buying unit in key markets saw client Sony align its regional media planning and buying with MEC, while LG appointed Mindshare globally.
Tsuyoshi Suganami, president and chief executive of Dentsu Media in Taiwan, stated that “both markets are very important”, although neither he nor network operations manager Ken Matsumura was able to comment on the route Dentsu Media would take to establish operations in the two markets.
While Australia may present an easier target, building a stand-alone presence in Hong Kong will not be easy; aside from the significant investment required and the challenge of staffing the operation, the market offers few acquisition prospects.
Despite being ranked fourth in Taiwan - its strongest foreign market - after Carat, Mindshare and MEC, the network struggles to compete with international rivals outside Japan due to a fragmented operating model and an unclear brand proposition.
Originally established as Media Palette, the company rebranded to become Dentsu Media last year. While active as an individual brand in Thailand, Dentsu Media does not exist as a separate arm in markets such as Singapore, Indonesia, Malaysia, China or India, where Dentsu’s media facilities are bundled with the parent brand or in conjunction with agencies within Publicis Groupe. In Malaysia, the firm uses its 15 per cent stake in Publicis to operate media through Zenith Media; its Hong Kong presence runs alongside Starcom.
A media agency source comments that such fragmentation is a “practical solution”, given the small scale of markets such as Singapore and Malaysia, where the agency services smaller clients. But the source points out that Dentsu’s traditional full-service model has worked against it, Outside of Japan, it lies “somewhere in the middle - not fully independent and not fully full-service”.
Matt Eaton, leader of Mindshare Japan, cites Dentsu’s “Japan-centric” model as another potential hindrance. While it is crucial that Dentsu strengthens its foreign presence, its late entry and lack of experience present obstacles. A number of large Japanese firms are already housed within existing global media networks.
“It’s something they should have done 30 years ago,” Eaton says, indicating that while a continued collaborative approach would be the best means of international expansion, the proposed venture may be “too little, too late”.
