Dentsu and Aegis: at last, the marriage can be consummated

Finally last week, nine months or so since Dentsu and Aegis tied the knot, the pair can get down to consummating their marriage.

The marriage analogy is an appropriate one, albeit more like an arranged union than one of true love.

You can compare the delay between last July’s nuptials and the long-awaited consummation (let’s hope the delay has only fired up the desire) to that moment when the priest asks “does anyone know of any reason etc” and the Chinese competition authorities stick their hand up and go “er, yes, well, maybe.”

And now, in the form of a positioning statement, we have the first evidence of the way our newly-weds are settling in with each other. You can read their wedding speech here.

Unfortunately, it’s not a promising start – ‘the first truly global communications network for the digital age’. It’s neither exciting nor credible. Having had all this time to think about it, why couldn’t they come up with something better?

Still, both parties must be relieved that the wedding night is over.

The suitor is an ageing but loaded Japanese of impeccable standing, stuck in his ways and anxious to spread his wings in exciting new markets. Over the years he has wooed numerous pretty young westerners but never come close to tying the knot.

The recipient of his affections is a nubile, glamorous 30-something Euro babe, fully up-to-speed with trendy new ways of living. She too has had her share of suitors – which she has always rejected – but perhaps felt that now was a good time to trade her independence for a more secure future under the wing of an indulgent sugar-daddy.

So at last our joyful couple can embark on their new life together under their married name of Dentsu Aegis Network.

But what difference will married life make to Aegis and its new partner, Dentsu?

As far as Aegis is concerned, not a lot, except in one respect. To Dentsu, as an advertising network, not much; as a corporate entity – a lot.

So while this may not be a marriage made in heaven, in the romantic sense of the phrase, it may well – as arranged marriages are intended to do – make for a powerful union. In a nutshell, where Dentsu is weak by geography and discipline, Aegis is strong. And vice versa.

In that sense, it’s less about the absolute numbers. Pre-Aegis, Dentsu was fourth in the global league table with revenues of just over $4bn. Add Aegis’s $1.9bn and…it’s still fourth. But it’s much better balanced.

So is it business as usual for Aegis? Pretty much. It will continue to develop, as it has for the last few years, its geographical footprint and its digital reach. Where necessary, it will get a leg up from Dentsu – Japan, obviously, and maybe in parts of Asia.

But most importantly, Aegis will have access to the Bank of Dentsu – a bountiful source of cash with which to continue to acquire more digital businesses or invest in proprietary technology – increasingly likely to be a source of competitive advantage or meaningful differentiation.

While Aegis has done pretty well in expanding out from its European roots, the onset of Euro-sclerosis means accelerating its growth in the US, Asia and Latin America is important. So those cheques from the Bank of Dentsu will come in handy.

And what will Dentsu get from handing over all that money? As an advertising network, which is what it is best known for, not much since there is little synergy with the media planning and buying that is Aegis’s core business. There’s more chance with Dentsu’s fledgling digital interests, where it owns, among others, the digital agency Steak.

But it is corporate Dentsu that really benefits. It may control 24% of the Japanese advertising market – second only in size to the US – but as the Japanese economy enters its tenth year in the doldrums (a fate that may await Europe), that’s not a good place to be. Put it this way: pre-Aegis, around 85% of Dentsu’s revenue came from Japan, and the remaining 15% from 28 countries. Post-Aegis it will be around 42%, and from 100-plus countries. That’s a much healthier balance.

Sceptics will point to Dentsu’s pitiful record overseas, and a long list of failed attempts to break out of fortress Japan. It even once owned the legendary CDP agency, although the fact that it bought it long after it was past its best seemed to underline just how cack-handed Dentsu could be.

Since then, it has had numerous joint ventures with the likes of Havas (in a previous incarnation) and a minority stake in Publicis – all of which have to come to naught.

Cynics take this as evidence that Japanese corporate culture does not travel well, certainly in free-wheeling western sectors like advertising. But in this deal, while not quite a marriage between equals, Dentsu simply can’t afford to mess Aegis around. For its part, Aegis is a significant enough entity not to be messed around.

That tells me it might actually work.

JWT India: it’s a conspiracy, not a cock-up

My first reaction to the scandal engulfing JWT India, Ford and the bondage ads was that it was a cock-up, albeit one of a mighty embarrassing nature.

Some young creatives frustrated at their failure to get some edgy work through the process decide to upload it for the world to see. Young creatives being very single-minded as a breed, they completely missed the wider context. Following some appalling rape cases, India is in the grip of self-recrimination about the ways it treats women.

Against this background, ads featuring women tied up in the back of car are bound to cause trouble.

Yet if you look at the work, it’s actually very Ford – i.e. benefit-led, in this case the benefit being the size of the boot.

As it turns out, it’s not a cock-up, but a conspiracy to game the Abby awards at this week’s Goafest, India’s equivalent of Cannes.

Now Goafest is a very big deal in India. TV broadcasters and the serious press all send news teams to Goa. It may lack the scale of Cannes (what doesn’t?), but it makes up for that in energy. It’s a bit like a cross between a rave and US spring break weekend.

Some may say this heady cocktail explains the prevalence of scam culture at the Abbys. As I know from my stints in Mumbai on Campaign India, the Indian media treat creatives like rock stars. Winning big at the Abbys gives creatives a profile beyond advertising – it may even get them into Bollywood – so the temptation to cheat is high.

The former editor of Campaign India, Anant Rangaswami, and I would spend hours arguing with leading creatives in India. We saw scams as a pernicious evil, a way to bring the industry into disrepute; they saw them as a legitimate tactic to gain fame (personal and corporate) – and besides, since everyone else was at it, they might as well too. You can read his take on it here.

Now that the sorry affair has brought down a name as big JWT India’s Bobby Pawar, the industry might just see sense. Let’s hope.