Dentsu dominates Japan’s media sector and advertising
Dentsu switches from JGAAP to IFRS accounting standards with big impact on KPIs
Dentsu dominates Japan’s advertising and media industries, and attracts some of the most creative Japanese talent, although Dentsu is not the first advertising agency in Japan – that priority belongs to Hakuhodo.
From April 1, 2015, Dentsu decided to switch to IFRS accounting standards from Japan’s JGAAP standards. For FY2014, Dentsu reports financial results both using IFRS and JGAAP standards, giving us the fascinating opportunity to compare both accounting standards for a major corporation.
So how big is Dentsu? For FY 2014 (April 1, 2014 – March 31, 2015) Dentsu reports (we have rounded the figures):
- Turnover (IFRS) = ¥ 4642 billion (=US$ 37 billion)
- Net Sales (JGAAP) = ¥ 2419 billion (=US$ 19 billion)
- Revenues (IFRS) = ¥ 729 billion (=US$ 6 billion)
For operating income, net income and other data IFRS and JGAAP measure quite different KPIs.
Disruption is on the way: CyberAgent based on blogs, Recruit based on classified advertising and HR, LINE based on sticker communications, and many more…
Managing Japan/West cultural issues via the Dentsu-Aegis-Network
As for many Japanese corporations, Dentsu’s challenge is to leverage a dominating position in Japan into a global business footprint, while managing the well-known cultural issues. Dentsu’s approach was to acquire the French/UK agency Aegis, and then via Dentsu-Aegis acquire a string of agencies all over Europe:
- abaGada in Israel
- Mindworks in Greece
- Lesmobilizers in France
- explido in Germany
- Socializer in Poland
- Ymedia and Wink TTD in Spain
- Simple Agency in Italy
- and more….
Dentsu and Dentsu-Aegis
Dentsu dominates Japan’s advertising space, and is a very very strong force in Japan’s media industry sector, through control and management of major advertising channels with an overwhelming market share in Japan, and has been working hard to leverage its creative power and strength in Japan into a larger global footprint.
A big step forward towards a larger global footprint for Dentsu was the acquisition of the London based Aegis Group, announced on July 5, 2012.
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