Exclusive: Here's What Dentsu's Reorganization Actually Looks Like

Since the beginning of 2021, Dentsu says it has been operating in the U.S. under a new framework created by a restructuring across the organization. Investment in this new model came at the cost of many jobs. Dentsu cut some 6,000 roles globally in service of a restructuring that involved consolidating its agency roster under six global agency brands. Now, Dentsu is pinning its hopes on a pivot around centralized solutions for creative, data and CXM, and media. Dentsu claims the streamlined model will quickly help clients connect with the right audiences, prioritizing impact over mere efficiency in a collaborative structure that's easier to navigate. "It’s much more navigable for marketers when they have a singular or truncated engagement point," Forrester principal analyst Jay Pattisall told Adweek. "The level of complexity in marketing solutions is ever increasing and expanding. It is difficult to look to one particular discipline or capability to provide the holistic solutions that are necessary to create the type of experiences and marketing consumers are willing to engage in and have the effect of delivering results." Dentsu Americas CEO Jacki Kelley said the time was right for the organization to consolidate offerings and streamline operations after years of acquisitions. While it was already moving in that direction prior to the pandemic, the transition, like many changes across the industry, was accelerated by the seismic shifts in consumer behavior and client needs in 2020. Dentsu previously consolidated a number of creative agencies with the creation of Dentsumcgarrybowen last May. Pattisall said Dentsu was later to restructure to a more integrated offering than its competitors but, because the network doesn't have as many agency brands as industry giants such as WPP and is more focused on media operations, at least in the U.S. and Europe, it has advantages in completing such a global transition more quickly. Dentsu is now facing the challenges of 2021 by going to market in a new way in the U.S., focusing on connecting data and analytics to cross-agency creative and media solutions to engage with clients across a variety of services. Structural change with data at the center Individual agency brands now sit under a broad Dentsu Solutions function for creative, media and customer experience management, designed for collaboration across the holding company. Dentsu’s six global agency brands include integrated agency 360i, creative agencies Dentsumcgarrybowen and Isobar, data performance marketing agency Merkle, and media agencies Carat and iProspect. Each agency is situated within a broad Dentsu Solutions function designed for collaboration across Dentsu’s business. Dentsu appointed 360i CCO Menno Kluin to lead creative across the solution for the U.S. as Dentsu Creative U.S. CCO. 360i is represented in the U.S. under the creative function as well as under media through a Dentsu X powered by 360i offering. By combining Dentsu X and 360i, Dentsu is hoping two agencies it sees as complementary play off each other’s relative strengths. According to Dentsu, these changes are not only organizational but reflect and contribute to real changes in how its agencies work with clients. Dentsu capability centers comprising five core capabilities for each area of service sit within each Dentsu Solutions category. While clients enter their relationship with Dentsu through a specific agency or dedicated client team, they then have access to services across these collaborative capability centers. “This is really driven by client need,” said Dentsu Creative Americas CEO and Dentsumcgarrybowen global president Jon Dupuis, adding that the past year demonstrated the importance of being able to pivot quickly to meet evolving client demands. Data operations through Merkle and data platform M1 will play a key role informing all of Dentsu’s operations across capabilities, with Merkle falling under CXM solutions. According to Dupuis, data is centralized in the new model, informing context across Dentsu’s operations. Dentsu's acquisition of data and performance marketing agency Merkle in 2016 preceded similar acquisitions by rival holding companies, something Pattisall said has given Dentsu's M1 data platform some advantages over newer offerings. "It's an evolved platform and business, and they have advantages in that they’ve been learning things and experimenting," he said. "It fundamentally serves the purpose of an audience platform that enriches all the Dentus agencies' understanding of certain customer segments and how to reach them in paid channels." Creative Solutions: 'AOR on demand' Dupuis characterized the Creative Solutions offering as taking what he referred to as an “AOR on demand” approach, integrating creative agency capabilities to provide the expertise and intimacy of AOR relationships with the flexibility of project assignments. The creative solution works with clients across capability centers focused on strategy and insights, brand and experience, innovation and design, PR influencers and editorial, integrated production and content. Dentsu’s creative and media teams also collaborate for functions such as audience development. According to Dupuis, Dentsu’s evolution and its ability to tap into Merkle’s capabilities allow its creative teams to create content more efficiently and with greater context, something he called “game-changing from the creative perspective.” “The fact that I can create more individual-type messaging is a power we have not previously had because it has been cost-prohibitive,” he said. “We got to a place where the operating model and infrastructure is in place that can bring that level of personalization to the creative model.” As clients focus more on brand purpose, Dupuis said, these developments allow Dentsu to not only deliver messaging but drive behavioral change for brands. “The greatest way to get purpose to resonate is to put behaviors out there, not just messaging,” he said. “Those behaviors will have to be clear, contextual and relevant to audiences in the most personal of ways.” Media Solutions: reimagining investment for meaningful media Dentsu’s evolution is designed to help clients connect with specific audiences on appropriate channels at the right time. Media operations function across the capabilities of audience and insights, media effectiveness, performance marketing (a function bringing together capabilities from 360i and iProspect), investment management and original content. Dentsu has also upended its approach to categorizing media channels, looking at media investments through the lens of biddable and non-biddable media rather than traditional channel categories. “What we realized is that much of the way things are organized is there are separate agencies responsible for different channels and/or types of media,” said Doug Rozen, Dentsu Media Americas CEO and U.S. president of Dentsu X powered by 360i. That approach, he said, prevented a holistic, integrated view on media investments. “We wanted to celebrate that [more media is becoming biddable] while also recognizing the importance of relationship and reservation-driven media,” he added. Dentsu’s investment team’s changes include a pair of new offerings designed for an evolving media landscape. Brand Assurance targets ad placement, addressing everything from the deliverability of ads to suitability, safety and contextual relevance. Media Futures utilizes research to inform new kinds of partnerships and other ways to provide more meaningful media solutions to clients. Rozen defined “meaningful” media solutions as those constructed with purpose and intention in service of being not only efficient but effective in how, where and when they reach which audiences. “That puts incredible power on our planners, whereby they have to be more strategic than ever before,” he said. Dentsu views its media pivot as a course correction of sorts resulting from trends in automation, and cost driving the media buying and planning process in recent years. “The tools today allow us to understand to greater precision what we’re planning and activating," Rozen said. Put to the test The restructured offering in the U.S. arrives as clients are reevaluating media agency relationships after a transformative year, providing Dentsu with a wealth of new business opportunities. Transitions aren't always easy, however, and Pattisall said some marketers described Dentsu's solution as disorganized compared to competitors in a new business context, likely attributable to short-term growing pains typical of a new offering. Dentsu believes its approach will allow it to capitalize on opportunities for growth in 2021. "We see the trend line for both existing clients expanding their scope and new opportunities whose scope is integrated increasing in velocity in a marked way," Kelley said.