Dentsu, the Japanese marketing services conglomerate, has announced a new strategic plan covering the period to 2013, during which time it will focus on areas including digital media, consumer insight and expanding its reach in emerging markets.
The company, which is headquartered in Tokyo, has developed a new ‘medium-term management plan;, entitled Dentsu Innovation 2013, in response to a number of challenges.
In Japan, these include falling birthrates and an ageing population, as well an increased emphasis on the environment, all of which show its “social structure and societal awareness are changing.”
More broadly, the fact many advanced markets are ‘nearing maturity’ and emerging economies are becoming more important has also “accelerated the pace of the global business operations of our clients both at home and abroad.”
The ‘most prominent’ trend, however, is the growing importance of digital technology, which is having a “profound, global impact on how consumers, companies and media interact with each other.”
Digital media will not only “dynamically change the way we do business,” but also means “we are now able to more precisely understand, clearly analyse and gain insight into the activities taking place on this new platform,” Dentsu said.
In “taking on the Platform Era”, the Asian firm will seek to combine its more “traditional” advertising functions with new evolving technologies, and consumer insights drawn from across these various digital channels.
Similarly, it intends to pursue “good innovation”, which, in the first instance, takes the form of ensuring its services meet the changing realities of the current and future media landscapes.
With regard to its business model, this also requires establishing “ways to have keener insight into consumers”, including collaborating with other companies, as well as “pursuing restructuring of the media business” to capitalise on new technology.
Looking internationally, Dentsu also stated an intention to “secure a stable foothold and increase our competitiveness in BRICs and other growth markets.”
This will enable it to win “more local clients and global accounts, as well as the accounts of Japanese clients operating in those markets.”
Internally, it is also aiming to develop a pay structure which rewards “employees based on their individual contributions, skills, and market value.”
Similarly, as part of a cost control exercise, Dentsu will review its business structure in order to “promote further streamlining of Group-wide operations.”
Overall, the Japanese corporation hopes to boost its annual consolidated operating income to at least ¥70 billion ($750m; ¤528m; £457m) by 2013, with an operating margin of 20% or higher, and a return on shareholder equity of 8% at minimum.
Data sourced from Dentsu/Asia Media Journal; additional content by World Advertising Research Centre (WARC) staff, 22 July 2009