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Dentsu warns of slower 2016 as Aegis growth stutters

Dentsu, the owner of Aegis and Mcgarrybowen as well as its operations in Japan) has reported gross profit growth of 7.2 per cent in the first quarter of 2016, 5.4 per cent at its operations in Japan and 9.2 per cent at international business Dentsu Aegis network. Claimed organic growth is 5.1 per cent, good in comparison to its big marcoms rivals but a slowdown from last year.

dan-largeDentsu Aegis Network’s organic gross profit was 4.5 per cent in Q1 2016, compared to 13.7 per cent for the same period last year. Since Dentsu bought Aegis for £3.6bn Aegis has put some much-needed impetus into its Japanese owner but life seems to be getting tougher at the media buyer. One of its biggest global accounts, Diageo, is reviewing its media and media clients across the board are trying desperately to cut costs. Dentsu is warning of slower full year growth this year.

A big worry is Mcgarrybowen, its great hope in the creative stakes. Mcgarrybowen’s fortunes have been mixed at best in the US recently with more losses than gains and it has failed – so far – to make much of an impact in Europe from its London HQ

Dentsu badly needs a bigger international creative presence but there aren’t many independents out there it can buy that have the necessary scale. A bid for one of the Publicis Groupe or maybe even WPP creative networks looks like the best option.

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