Dentsu sells flagship HQ building as Olympics problems loom

Dentsu, the world’s fifth biggest ad holding company after WPP, Omnicom, Publicis and Interpublic, has sold its iconic tear-shaped HQ building in Tokyo for an estimated $3bn.

The deal is expected to add $800m to Dentsu’s profits but analysts and others in Japan are saying the sale was needed as Dentsu is unlikely to reap the expected windfall from the imminent – and controversial in the light of Covid – Olympic Games. Dentsu is reported to have signed up most of its big clients as sponsors and also controls a big chunk of Japanese TV airtime. But will advertisers want to be associated with an event that many Japanese think shouldn’t be taking place?

Dentsu and its offshoot Dentsu International (the old Dentsu Aegis Network/DAN) have struggled recently with the company’s near-monopoly position in Japan under siege and International, now run by former DDB boss Wendy Clark, busily restructuring as it tries to absorb a spate of acquisitions which seem to have made International more complex but not more profitable. Merkle seems to be the only big deal that has so far worked and that was a few years ago now.

Flagship creative agency Mcgarrybowen has, so far, failed to travel outside the US and its new and cumbersome moniker dentsumcgarrybowen will hardly help.

In a time of remote working it may make sense to offload a giant HQ building, although Dentsu staff will, presumably, continue to occupy it. Further surgery may be required.

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About Stephen Foster

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

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