Dentsu posts 80% profit rise

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[Tokyo] Increased spending during Japan's summer heat wave and the Athens 2004 Olympic Games helped Dentsu post $115.7 million in net income in the first half of its fiscal year, up 80% from the same period last year. Revenue grew 13.1% to $8.9 billion during the first half, April 1 to Sept. 30, mirroring a slight improvement in Japan's overall economy. The Japan Center for Economic Research estimates 2004 ad spending will increase by 3.3%. Dentsu's performance also reflects efforts to grow domestically and overseas. Although it acquired a 15% stake in Publicis Groupe in 2002, when the French company merged with Bcom3 Group, Dentsu needs to expand its own brand. Dentsu controls about one third of Japan's ad market, but multinational agencies such as WPP Group's Ogilvy & Mather and Interpublic Group of Cos.' McCann Erickson are chipping away at its dominant position. Dentsu responded by investing in boutique shops, launching Rewind in September to plan and execute brand strategies for smaller clients who need quick turnaround. Dentsu already has four small agencies in Japan, One Sky, Build, Bless You and Shingata.

Exploring new-business opportunities, Dentsu acquired 30% of World Sport Group to promote and develop its sports-marketing business in Asia, and signed an agreement to become the Federation Internationale de Natation's exclusive worldwide marketing agent through 2008. In China, Dentsu set up a joint venture with Shanghai Media & Entertainment Group to develop programming and sell advertising for SMG's own channels, as well as market broadcasting rights to other TV stations in China.

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