Dentsu tumbles in 2023

CFO Priday is leaving after 20 years

Japanese ad giant dentsu has confirmed a pretty grim 2023 posting a slight revenue increase (0.7%) but organic revenue falling 6.6% in Q4 and 4.9% for the whole year, way behind its ad holding company rivals. Dentsu expects just 1% organic growth in 2024.

Dentsu blames the result on delays to what it calls “large transformational projects,” which accounted for 32% of its revenue. It has targeted these for 50%.

At the same time global CFO Nich Priday is leaving after 20 years, one of a string of non-Japanese departures as the company has centralised most of its functions in Japan.

Global CEO Hiroshi Igarashi says: “As we look forward to 2024, we see some headwinds dissipating. We expect to see a return to spending from technology clients – particularly in the US market. However, we will balance this with cycling out-of-account losses in the first half 2024, making our 2024 performance second half weighted. We will continue executing our strategic objectives to return the Group to growth.

“Implementing One Dentsu will ensure the suitable structures are in place for a client-centric, winning organisation. Progress includes removing internal silos, simplifying practice areas, and aligning P&Ls to serve clients best to deliver Integrated Growth Solutions. We will continue to drive profitability through our existing core business assets.”

Dentsu has, in effect, wound up Dentsu International, once headed by former DDB boss Wendy Clark. There must be doubts over Japan-based One Dentsu’s ability to remain a major player in the US and Europe. It may be more sensible to concentrate long term on Japan and the still growing APAC region.

That certainly seems to be the view of an ever-lengthening queue of departing non-Japanese executives.

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