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Dentsu reports weak first-half growth due to “absence of large-scale sports events”

Global marketing services group Dentsu, the parent of Dentsu Aegis Network, reported a decline in organic growth of 1.5 per cent, despite posting an overall increase in net revenue of 2.6 per cent in the first-half of 2019.

They blame the decrease on a decline in traditional media in Japan, as well as a weakness in the Australian and Chinese markets. The Japanese business also saw organic growth slip 2.1 per cent due to “an absence of large-scale sports events.”

The Japan-based group are the official marketing agency for the Tokyo 2020 Olympic and Paralympic Games, and hold a substantial package of official sponsor and supplier rights for the upcoming Rugby World Cup.

The agency is also the worldwide marketing partner for the IAAF World Athletic Series, which includes all World Championships and the IAAF World Athletics Final, which allows them to sell the media rights outside Europe (excluding sub-Saharan Africa).

Dentsu president and CEO Toshihiro Yamamoto said: “The weaker than expected first-half results have led us to lower our 2019 full-year forecasts.”

The company is in the middle of a corporate restructure so all operating divisions, including DAN, reports into it. This latest move is part of the group’s “One Dentsu” strategy.

“As we continue to bring the Japanese and international business closer together we can fuse our capabilities and increasingly leverage the diverse and talented 62,000 individuals across the group,” Yamamoto said.

“Although our business has expanded beyond advertising and is increasingly diverse in nature, our role and value are crystal clear: to find and execute the best solution for our clients. This is why it is imperative that we discover, connect and develop the diversity that will comprise One Dentsu.”