Dentsu has joined the ranks of the ad holding companies looking like the wheels are coming off, with organic growth in Q3 going negative at -0.6%. This follows yet another profit warning from Sir Martin Sorrell’s S4 Capital which once looked like challenging the likes of WPP and Interpublic but which is now valued at just £300m.
WPP itself is struggling after a poor third quarter and, valued at £7bn (a third of its relatively short-lived peak under Sorrell) must be appearing on bargain-hunting private equity radar.
Dentsu UK has also dispensed with COO Nnenna Ilomechina and CTO Dominic Shine as its EMEA business struggles. In Japan it is losing CEO Norihiro Kuretani and CSO Soichi Takahashi.
Dentsu, as with WPP, S4 and Interpublic is blaming a slowdown in spending by its tech clients and a lack of business transformation work. Recent history seems to show that tech clients are more than capable of providing most of the services offered by ad holding companies themselves. Even Amazon’s current, much-praised Christmas ad was produced in-house. Business transformation remains the bread and butter of IT-based consultancies like Accenture.