Dentsu has posted its Q2 results for this year and the reading is not the best. The holdco’s net revenue was pretty much flat, declining 0.1 per cent year-on-year. Its organic revenue declined 4.7 per cent year-on-year.
As a result, dentsu has said it predicts its organic growth for the rest of this financial year to run to somewhere between 0 per cent and a -2 per cent loss.
“Our second quarter performance reflects the continued impact of the slowdown in spend from clients in the technology and finance sectors. We expect to see an improving trend in organic growth in the second half with our focus on delivering growth and measurable business results for our clients,” said Hiroshi Igarashi, president and CEO of Dentsu Group.
In APAC, excluding Japan, organic revenue was down some seven per cent and for the first half of the 2023 financial year, it was down 7.4 per cent. Again, challenging macroeconomic environments were to blame — particularly in China.
Regardless, dentsu pushed forward with its acquisition of content production firm Tag, for a reported £533 million (some AU$959 million at the time). The new business will contribute to Dentsu Group revenue from 1 July and it will “significantly enhance the Group’s global digital production capabilities, supporting dentsu’s strategy of offering integrated client solutions.”
Igarashi added that Tag would bring “AI-driven technology and global content capabilities to add immediate value to dentsu’s clients.
“Tag will provide high quality content at speed and scale for creative, a scaled personalization engine for customer experience management (CXM), as well as adding power to media with Dynamic Content Optimization (DCO). We consider Tag’s capabilities as ‘the last mile,’ ensuring dentsu provides an integrated, full-service offering that is, increasingly, desired by our global clients.”
What’s more, the company pointed out to investors that its shift towards its “One dentsu” strategy through removing silos to collaborate more across the group while streamlining costs continues apace.
“As we look forward, we are confident in our positioning at the convergence of marketing, technology and consulting. Client pitches require ever-closer integration of our services and by accelerating our One dentsu philosophy and mindset we will encourage the collaboration required amongst our people to anticipate and exceed our clients’ expectations,” added Igarashi.
“The collective strength of our 72,000 employees brings dentsu its unique culture. Our ability to generate new ideas and innovate, by bringing together expertise and fostering creativity enables us to deliver integrated solutions that grow our clients’ businesses.”
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