Dentsu posts grim £960m loss in 2020

Dentsu had a pretty grim time in 2020 – losing £960m with revenue less cost of sales down 11.1% on 2019 and operating profits down 11.9%.

The Japanese giant has already announced 6,000 redundancies and a plan to reduce its 300 or so brands to six operating units.

Over half of Dentsu’s business is in Japan and the Japanese economy fell by 4.4% in 2020 although it began to recover strongly – 12% – in Q4.

The remainder of Densu’s business is Dentsu International (formerly Dentsu Aegis Network) outside Japan, built on the Carat media agency alongside CRM agency Merkle (a bright spot) and creative agency Mcgarrybowen. International recently merged second media agency network Vizeum into digital agency iProspect.

In charge of the above is Wendy Clark who joined last year from Omnicom’s DDB. Clark has some big decisions to make. Can media buying, which drove DAN for a decade or more, recover its former pre-eminence? Is Mcgarrybowen, which has so far failed to travel outside the US, a strong enough brand to build a global creative offer around? Should Dentsu, which says it wants to build its tech and “business transoformation” revenue to over half the total, even be in the creative game outside Japan?

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