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About Dentsu America, Inc.

Dentsu is the #1 ad firm in Japan and one of the largest advertising conglomerates in the world (along with the other "Big 6" holding companies: WPP, Omnicom, Publicis, Interpublic, and Havas). Its numerous agencies provide creative services for thousands of clients in more than 145 countries and regions across five continents. Dentsu offers a host of marketing and communications services, including public relations, content services, creative services, and other services. About 45%% of the company's revenue comes from Japan. The firm conducts business outside of Japan through its London-based Dentsu Aegis Network. Dentsu was founded in 1901 as Japan Advertising and Telegraphic Service.

Operations

Dentsu reports within two business segments: Japan business and International Business.

Within Japan, Dentsu operates eight business domains: Marketing, Digital Marketing, Creative Sphere, Promotions, Media, Content, PR, and Global Business. Outside of Japan the company operates the Dentsu Aegis Network, as well as two other business units: Sports & Entertainment and IT & Events.

The company's stable of marketing agencies includes Carat, iProspect, Isobar, mcgarrybowen, and Merkle, among numerous others.

With regards to the company's products and services, its advertising business virtually generates all of Dentsu's revenue (more than 90%). The business provides various advertising through media including newspapers, magazines, radio, television, internet, sales promotion, movies, out-of-home, and public transportation Information service, which gives in about 10% of revenue, offers sales of information-related products. The company also provides clients with event marketing, creative services, marketing, public relations, and contents services.

Geographic Reach

Tokyo-based Dentsu conducts more than 55% of its business outside of Japan, doing so through its Dentsu Aegis Network, based in London. The Americas account for roughly 25% of the company's total revenue, followed by the EMEA region (Europe, Middle East & Africa) at more than 20% and APAC (Asia/Pacfic) at approximately 10%.

Financial Performance

Note: Growth rates may differ after conversion to US dollars.

Revenues rose 3% to ¥1 trillion from the previous year. This was primarily due to the growth in the company's advertising and information services.

The company had an ¥80.9 billion net loss in 2019 due to the gain on sales of shares of associates recorded in the previous fiscal year and an increase in the revaluation losses of earnout liabilities and M&A-related put-option liabilities.

The company ended 2019 with ¥414.1 billion in cash. Operating activities generated ¥80 billion while investing activities used ¥76.1 billion. Financing activities used another ¥7.8 billion mainly for repayments of lease obligations.

Strategy

The Dentsu Group aims to be a company which plays a leading role in the creation of value for all its stakeholders and wider society.

2019 and 2020 will be a key phase for implementing business transformation throughout the Dentsu Group beyond 2020. In these two years, focusing on growth and evolution in its Japan and international businesses, the company will continue its necessary transformation to ensure that the company has sustainable growth through 2020 and beyond.

Dentsu plan to leverage its strong, existing client relationships, as well as its wider customer relationships with platformers, content holders and the media. By collaborating with existing partners, it can build on its core competencies and create new value by utilizing the creativity and technology that already exists within its business.

The company will increase its investment activity, including M&A to strengthen its capabilities.

Mergers and Acquisitions

In early 2020, Dentsu Aegis Network Ltd. acquired a 100% stake in Dallas-based, Digital Pi, Inc. a leading B2B digital marketing agency focused on marketing automation consulting services to clients for an undisclosed amount. Digital Pi joins Merkle, a subsidiary of Dentsu, and expands Merkle's capabilities in marketing automation and demand generation.

In late 2019, Dentsu Aegis Network Ltd. purchased Shanghai EBP Internet Technology (EBP), an e-commerce agency in China. Dentsu integrated EBP with its iProspect, a digital marketing agency with offices across the globe. EBP brings to the table advanced e-commerce capabilities at scale, while iProspect provides a diverse client base. Dentsu Aegis Network Ltd. also acquired Los Angeles-based MuteSix, a digital performance and direct-to-consumer marketing agency, to grow iProspect's operations.

Dentsu also used acquisitions in mid-2019 to expand Merkle, a data-driven, tech-enabled marketing agency within Dentsu Aegis Network Ltd. It purchased Indian agency Ugam Solution to expand Merkle's offerings in competitive data marketing services, and Seattle-based Filter, an experience design and digital marketing company.

Other international acquisitions in 2019 include Ambient Digital Vietnam (to form iProspect Vietnam), Davanti (in New Zealand), Re:Production (a UK production company); and Happy Marketer (Singapore).

Company Background

Seeing a need for a Japanese wire service, Sino-Japanese war correspondent Hoshiro Mitsunaga founded Telegraphic Service Co. in 1901. Mitsunaga let newspapers pay their wire service bills with advertising space, which his advertising agency, Japan Advertising (also founded in 1901) resold. He merged the two companies as Nihon Denpo-Tsushin Sha (Japan Telegraphic Communication Company) in 1907. Known as Dentsu for short (the name was officially changed in 1955), the company gained Japanese rights to the United Press wire in 1908 and began extracting even more favorable advertising rates from its clients. With its mix of content and advertising, Dentsu became a leading Japanese communications business.

Dentsu America, Inc.

32 Avenue of The Americas STE 1
New York, NY 10013-2473
Phone: 1 (212) 397-3333

Firm Stats

Employer Type: Privately Owned