Dentsu aims to rebuild its core business in Australia, following more negative growth numbers.
Costs are a focus, with a review of the overall structure to “reduce costs and improve the efficiency” of business operations.
Australia, according to a presentation to market analysts, was among a string of dentsu’s markets reporting less than -10% organic growth in the December quarter and for the full 2023 year.
The company flagged changes when it released December quarter results. The Japan-based global advertising group reported the December quarter came in at -6.6% and the full year at -4.9%.
Australia is marked as a priority with plans to “rebuild core business”.
Dentsu says the Australian and New Zealand business was impacted by economic uncertainty, increased competition, lower client spend and account losses.
Key media client retention provided “some stability” in the market.
Dentsu says the Australian gaming business, SMG Studios, continued to show positive momentum with full year growth.
There are no specific numbers for the Australia business but organic revenue fell 8.6% in the APAC region, representing 10% of dentsu, in the December quarter.
The region was in the December quarter the subject of a “strategic review” of its cost base.
This would “enable a more agile response” to long-term opportunities and specific market needs.
For the APAC region as a whole, dentsu has a “soft” outlook for 2024 and beyond due to a “challenging” business environment.
Dentsu recognised a 53.1 billion yen (AUD542 million) of impairment loss on goodwill and intangible assets in the region.
Initiatives for improving growth in the APAC region include rolling out best practices, based on those implemented in successful key markets such as Taiwan and Thailand, and a review of client strategy, and he “overall cost structure”.
“The company will further focus on Japanese clients operating in the APAC region,” the company said.
Dentsu is in the middle of a global business management structure designed to accelerate growth.
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