Dentsu: Rebuilding the lost empire

When I entered the advertising and marketing industry six years ago, my initial recollection of dentsu India was that of a dynamic agency, actively pursuing acquisitions. The company frequently made announcements about its successful acquisitions and securing new accounts. According to reports, dentsu has acquired 13 companies over the past decade, and remarkably, the founders of all these companies remained on board following the buyouts.

Despite being a latecomer to the Indian market, dentsu amassed an impressive roster of prominent clients by 2020. Maruti Suzuki, Reckitt, Oppo Electronics, the Association of Mutual Funds, and Toyota India were just a few of the notable names on its impressive list of over 2,500 clients. According to COMvergence-e4m data for the period April 2021 to March 2022, dentsu X reported a billing total of Rs 62,347 million, capturing a market share of 6.7%.

As 2023 unfolded, significant changes took place within the agency. Two of its major clients, Maruti Suzuki and Reckitt, were lost to GroupM. Insiders reveal that while the pitches were called upon the expiry of contracts, there were issues plaguing the agency. In 2021, there was an internal audit and rumours were rife about corruption at various levels of the agency, tarnishing the company's reputation.

Between 2021 and 2023, almost the entire leadership departed one after the other. The exodus saw exits by Global CEO Wendy Clark, APAC Head Ashish Bhasin, dentsu India CEO Anand Bhadkamkar, and Head of Media Services Divya Karani. The other notable departures included Isobar CEO Shams Jasani; iProspect CEO Rubeena Singh; Dan Performance Group CEO Vivek Bhargava; Posterscope President-APAC Haresh Nayak; Webchutney co-founder Sidharth Rao and Taproot CCO Agnello Dias.

The official reason for these departures was cited as ‘restructuring’. It was announced that the company's transition from 160 agency brands to six global units would result in the loss of 6,000 jobs, including a quarter of its top 1,000 leaders. The organization operated without an India Head for two years.

However, the creative service line pulled off well, winning the coveted title of “Agency of the Year” at Cannes Lions 2022.

According to clients and industry sources, the media business of the organization encountered numerous challenges due to the absence of robust leadership, resulting in sluggish operations. These sources assert that limited innovations and minimal interaction with senior leadership led to the following implications:

Lack of Vision and Direction: According to a big client, located outside Mumbai, one of the recurring issues was that meetings were attended by mid or junior-level employees who lacked the authority to make decisions. The absence of a clear vision, direction, and involvement by senior-level executives hindered the company's progress, leading to a state of confusion and loss of focus.

Lack of Innovation: Following a series of departures at the top level, clients voiced their dissatisfaction with the lack of innovative approaches. It was said that some departments seemed to operate on autopilot, lacking proactive initiatives. One of the clients went on to say that the agency had neither helped them to achieve substantial cost savings nor did they give fresh ideas to maintain engagement. Moreover, due to the absence of senior leadership communication channels faltered, resulting in a lack of information dissemination, decreased collaboration, and breaking down of teams.

Erosion of Client Confidence: The absence of effective leadership within the company undermined clients' trust in its capability to fulfil their requirements. Strong leadership serves as a symbol of stability, expertise, and dedication. Without this reassurance, some clients began exploring alternative options. Furthermore, there appeared to be a noticeable decline in accountability within the organization.

The wave of departures led to Dentsu grappling with numerous vacant key positions, forcing senior leaders to juggle multiple roles. For instance, when Divya Karani departed in March, Anita Kotwani was promoted as Head of Media Services while still overseeing Carat. The company is reported to have approached several senior leaders to fill these vacancies.

Likewise, with Roopam Garg stepping down as dentsu X CEO, another position is set to become vacant soon. Sources indicate that the company is preparing to make some announcements regarding these positions soon.

The company has finally found a new structure, and a new CEO in Harsha Razdan. His appointment stands out due to his diverse professional background and notable stints at esteemed companies like Unilever, PepsiCo, Accenture and KPMG. While this is his first foray into agency leadership, his past involvement with agencies as a client has endowed him with a deep understanding of the difficulties and expectations faced by both sides.

Dentsu is now confronted with the formidable task of rejuvenating the company's reputation, attracting new clients, and rebuilding a strong and motivated team. In the tightly-knit Media and Entertainment industry, news, whether good or bad, spreads rapidly. To regain its standing, the agency must adopt an assertive approach, encourage innovation, and deliver exceptional work to its current clients for demonstrating its worth.

Insiders suggest positive changes are underway. With a leader at the helm, departments are collaborating more effectively, and the office is infused with renewed enthusiasm.

Additionally, Razdan's background in consultancy indicates a strong focus on clients, which could aid the company in reclaiming its position.

Rebuilding what has been fragmented over the past three years will require ample patience and time. The new leadership must diligently reconstruct the company, brick by brick. We can only hope that results will manifest soon.