Dentsu has roared into 2022, with better than expected results for last year and more upbeat of its prospects in the advertising market over the next three years.
December quarter revenue came in ahead of expectations due to increased spend from existing clients across the group with consumer confidence growing as the effects of the pandemic subside.
Dentsu Japan Network reported organic growth of 17.3% and dentsu international 12.1%. Growth in Australia was 12.1% for the 12 months and 20% in the December quarter.
The global group has raised its three year target growth to 4% to 5% a year, up from previous forecasts of 3% to 4%.
In 2022, the group forecasts organic growth at 4%, with dentsu Japan Network at 2% to 3% and dentsu international 4% to 5%.
Dentsu international now represents one-third of group revenue and accelerating.
Recent wins at dentsu international include iProspect winning the global media account of fuxury goods company Kering Group. The network earned KLM's integrated creative and media services. And Merkle won the account of Beyontec, a health care sector client based in Europe.
Wendy Clark, now global CEO for dentsu international and a former DDB worldwide CEO, says the group will continue its brand simplification.
Dentsu is making a series of "radical" cuts to its agencies, reducing them to six global brands from 300 internationally.
But the focus is on growth in 2022.
For media, the pipeline of opportunities is currently $US4.5 billion, and 80% of those are offensive.
“We are focused on converting this pipeline and growing our revenues ahead of the market,” she told analysts in a briefing.
“In 2021, we closed the year with $US1.5 billion in net new media billings, and we'll continue to build on this momentum in 2022.
“In last night's Super Bowl in the United States, more than 30% of the media inventory was negotiated and bought by Dentsu.
"We will also continue to deploy our technology platform, Dentsu Connect, creating a simplified end-to-end platform, connecting our people and clients and accelerating our integrated work.
"For CXM, this is a priority area for investment and acquisitions. We will focus on fast growth areas, adding capabilities and scale as well as continuing to develop our technology partner relationships.
"These partners' platforms are growing double digit and generating 2x to 5x spending requirements in their ecosystem to support this technology. And this is where we come in on the implementation and integration into a client's existing platforms, and of course, the usage of it to attract, retain and grow our clients' customers.
"For creative, under the new leadership of Fred Levron, our Global Chief Creative Officer, we are launching a refreshed product offering, making creativity the horizontal unifier of our people, company and clients.
"And we will continue to scale Content Symphony, a flexible on-demand content production capability for our clients. We already have 30 clients on board.
"All of our growth initiatives will be supported by continued business simplification and brand optimization that not only reduces our cost to operate, but also connects directly to the demand we see in the marketplace of growth delivered through agility and efficiency, which, of course, directly connects to our ambition to be the most integrated agency network in the world."
Clark wants dentsu to be the most integrated agency network in the world.
Currently 83 of top 100 clients take services from two or more of dentsu's three service lines.
"This shows the demand and potential that already exists within our client base," she says.
"We successfully launched dentsu gaming and dentsu health, and these cross-service line solutions are gaining traction. Our integrated global health offering has seen multiple new cross-service line client wins.
"Dentsu has a firm stake in the ground on gaming, cemented by the successful launch of our global gaming solution in the second half of 2021.
"Now with over 700 gaming creators globally, Dentsu has a passionate community of experts who enable brands to become part of gaming culture.
"For instance, we're purchasing land and building a persistent experience space in the metaverse for beverages client. And we're leveraging our media expertise to create moments of hype for digital drops and NFT projects for luxury brand clients.
"Our leadership in this space has been further validated recently as we've been officially awarded as the lead agency for Facebook Gaming globally.
"Dentsu's gaming solution will power a full end-to-end creative media, social and analytics solution for Facebook's gaming unit worldwide."
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