Here's The Worst-Case Scenario In The Dentsu-Aegis Deal

tim andreeTim Andree, CEO Dentsu Network West

Photo: Fast Company / YouTube

Japanese ad agency holding company Dentsu is powerful and “impenetrable” in its home country, The Economist says, and its corporate culture is at odds with that of Aegis, the European ad agency network it is buying in a $4.9 million deal.The magazine then goes on to give what amounts to the worst-case scenario of the deal: That it may end up like its previous alliance with Publicis Groupe, which ended in divorce in February:

Dentsu functions in Japan as much more than an advertising agency. It often handles all marketing activities for companies. Its scale gives it clout—and a reputation for throwing its weight around.

More worrying is Dentsu’s corporate culture. Like many other Japanese firms, but quite unlike a freewheeling European ad agency, it is stuffy and rigid, rewarding people for seniority rather than performance. Even in Japan, it has trouble keeping its creative staff, says an insider. Rising stars who chafe against the hierarchy occasionally opt to set up on their own.

Dentsu’s record with cross-cultural partnerships is hardly glossy. For 10 years it tried to work with Publicis, after the French firm bought one of its subsidiaries. But the partnership fizzled. Dentsu was unable to use Publicis as a springboard to plunge into Europe. The two firms split in February, with Publicis buying back its shares for €644m ($852m).

Jerry Buhlmann, the boss of Aegis, promises that the Dentsu deal represents “continuity”. … Mr Buhlmann will stay in charge. That suggests that Dentsu will allow Aegis to do its own thing. But don’t count on it.

Read the full article here.

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