Dentsu is the world's fifth-largest ad organization, but it has a limited stand-alone presence in the rest of the world, even though its first overseas office dates back to 1956, when it opened an office in Honolulu.
Dentsu hopes the new wholly-owned business development company, which starts out with 10 employees, will strengthen its regional business in Asia and better enable it to coordinate regional campaigns.
"The new company will be formed to regionally coordinate the care of clients who are handled by Dentsu companies in each country," said Koichi Sonoda, senior manager, corporate communications in Tokyo.
Dentsu Asia will be managed by President and Representative Director Noriyuki Shutto, who will relocate to Singapore from Tokyo, effective May 1. His role in Asia can be compared to that of Megumi Niimura, Dentsu's deputy managing director, international business in New York, who manages Dentsu's business in the Americas and Europe.
Mr. Sonoda said beefing up Dentsu Asia will not impact its two major joint ventures with Western agency networks. Dentsu acquired a 20% stake in the global strategic alliance Bcom3 Group with Leo Burnett Co. and the MacManus Group last year.
It also has a 20-year-old relationship in Asia with Young & Rubicam, now part of WPP Group, called Dentsu Young & Rubicam, which generated billings of just over $1 billion in Asia/Pacific in 1999 from clients such as Honda, Sony, Citibank and Colgate-Palmolive Co. Y&R has a majority stake and operational control in all 14 markets where DY&R has an office. The only exception is Japan, where Dentsu calls the shots.
A strengthened Dentsu presence in Asia suggests that the DY&R venture may have outlived its usefulness, but the relationship "remains strong and on course" and "benefits everyone," Mr. Sonoda said.
"The establishment of Dentsu Asia has nothing to do whatsoever with our relationship with Y&R. As you know, Dentsu has always had its own companies in Asia as well as the DY&R network," he said.
"Dentsu needs multiple networks since we are handling competing clients in Japan. It is therefore both useful and practical to maintain our own network as well as the DY&R network," he added. -- Normandy Madden
Copyright April 2001, Crain Communications Inc.