Dentsu builds media offices across Asia

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[Tokyo] Dentsu is rolling out a media-specialist network, Dentsu Media Palette, on a market-by-market basis in Asia to raise its profile and profits outside Japan.

The network's second office opens in Thailand on May 1 and is managed by staff from Dentsu's media department in Bangkok. The first office opened in Taiwan in 1999.

Dentsu won't name clients, but executives familiar with the media agency said they include Toyota Motor Corp., the Tourism Authority of Thailand and Ajinomoto in Thailand, along with Toyota, Taiwan Cellular Corp. and Family Mart in Taiwan.

increasing business

The agency hopes Media Palette will increase its media business among Japanese, local and multinational advertisers across Asia.

By expanding into other countries-South Korea and China, Asia's two biggest ad markets after Japan, are likely locations-Dentsu wants to better compete against media agencies run by WPP Group, Interpublic Group of Cos. and Omnicom Group.

Although Dentsu is the world's fifth-largest ad organization and the largest core agency brand, according to Advertising Age figures, its dominance is limited to Japan. Just 6% of Dentsu's $2 billion revenue comes from outside Japan.

Its move to create a branded media network runs counter to rivals that are putting together operations, such as Publicis Groupe's Zenith and Optimedia and WPP Group's merger of MediaEdge and CIA to form mediaedge:cia. Publicis' Starcom MediaVest Worldwide, previously two separate international media brands, is now the world's biggest media specialist company.

In fact, Dentsu already has pan-regional and global alliances with these groups. Dentsu Young & Rubicam, an Asian joint venture with WPP's Young & Rubicam, has been in operation since 1982.

Last year, Dentsu acquired a 15% stake in Publicis Groupe when the French ad group bought Bcom3 Group, in which Dentsu was a shareholder. Through that arrangement, Dentsu's media in small markets such as Hong Kong is handled by Starcom.

For Dentsu, multiple network relationships are needed since the agency handles competing clients in Japan but cannot do so in other markets. They also give Dentsu access to foreign expertise, but the Japanese want more overseas revenue and international prestige.

"Dentsu wants to be a major media player in Asia. They're not looking to merge with Starcom or Zenith, they want their own media brand in Asia. Even in Japan," said a Starcom executive familiar with the agency.

In Japan Starcom buys its own media, and Zenith has a partnership with the country's No. 6 agency Yomiko.

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