Dentsu suicide shows a business that’s lost its bearings

It never rains but it pours, especially at Dentsu in Japan it seems.

Hard on the heels of the agency admitting to overbilling hundreds of clients, most notably its biggest, Toyota, has been the suicide of Matsuri Takahashi (below) who allegedly worked 105 hours of overtime in a single month. Dentsu has now said that employees won’t be able to logo more than 65 hours of overtime – that’s a hefty 16 hours a week – in any one month.


So far so good, maybe, but log is an interesting word. What if the extra time isn’t logged?

Japan is Japan and, in the case of overbilling, much has been made by rivals from other countries of the supposedly ‘opaque’ nature of the Japanese media market. Dentsu, for example, is a media owner as well as a media agency. But big media agencies elsewhere are moving closer to such a position. WPP takes stakes in media owners and the big media agencies, in effect, control the ad inventory of many media owners. If they can’t or won’t sell to WPP, Omnicom, Publicis or Dentsu Aegis they won’t do much business.

The ridiculous hours worked in ad agencies are a different matter, of course. Adland has always been like it but, arguably, things have got worse as clients squeeze fees and agencies find themselves without the people, or sufficiently qualified people, to do the job. The real fly in the ointment seems to be pitches.

They’re the lifeblood of agencies not just in terms of income but also morale – fail to win a few pitches on the bounce and the whole agency can lose heart.

Pitches have got bigger and more complex, especially in media. Some of these require the preparation of vast amounts of research for hundreds of meetings. For creative agencies the temptation is always to go to the limit and actually produce finished creative work, including video and even film. Do the serried ranks of pitch consultants help?

Working on pitches has, historically, been an out of normal hours activity: often at weekends. Back in the day a company I was involved in produced a customer magazine called Out of the Blue for JWT. Very good it was too, until they decided they could do it online. They couldn’t, of course.

Anyway, in the course of this I was roped in to help on a Royal Mail pitch. This took place over a weekend although I declined the Sunday shift. At some time in the preparation of this bloody great document someone remarked that Allan Leighton, Royal Mail’s non-exec chairman but a particularly hands-on one, had said he would only read the first page. So why were we producing reams of the stuff? But that’s pitches for you (we didn’t win it).

I’ve no idea if the unfortunate Ms Takahashi at Dentsu was directly involved in such activities but they impact the whole agency and send stress levels through the roof. I believe Wendy Clark, new boss of DDB in North America, remarked that preparing for the McDonald’s pitch, which they won, had screwed up everyone’s summer holidays (she didn’t actually put it as strongly as that – she’s a former client after all). The boss of WPP media agency MEC said much the same things about the giant $4bn AT&T pitch and they didn’t win it. So they lost their jobs as well as their summer holidays.

Today’s business climate is more ruthless than ever, really quite nasty at times. US consultant Michael Farmer ascribes this to the cult of “shareholder value,” in his excellent book Madison Avenue Manslaughter. Big advertisers are obsessed by quarterly returns to shareholders so building the business comes second to cutting costs. Sir Martin Sorrell says the same thing. So agencies are pressed to do more work for less money.

You’re never going to get every agency to say ‘No’ to even the most unreasonable client demand. It would probably be illegal to try. But the better, stronger ones – in whatever sector – need to say ‘No’ to two things: poor payment terms and the assumption by some clients that ‘service’ means ‘servile.’

They should start, of course, by setting a much better example themselves. The death of Matsuri Takahashi should make that clear to even the most dim-witted agency slave driver.

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