Since its inception, the media business has been driven by two indispensable units of the industry – people and clients. But Dentsu India has faltered on both these counts, facing significant challenges and hurdles.
Over the past two years, the company has been plagued by internal corruption issues, resulting in a loss of trust from both its employees and clients. Besides, the company also saw several high-profile exits within a remarkably short time, which further destabilised its operations. To top it all, Dentsu suffered a major setback when it lost two of its biggest accounts – Reckitt, and Maruti, to competitor GroupM.
In such a tumultuous period, Dentsu brought in a new leader to steer the agency towards a path of recovery. Harsha Razdan assumed the role of Chief Executive Officer on May 2, 2023.
Razdan’s appointment was unique because he came from a diverse professional background, having previously worked at renowned companies such as Unilever, PepsiCo, Accenture and KPMG. Although this was a first for him, Razdan’s prior interactions with agencies as a client, have empowered him with a deeper understanding of the challenges and expectations from both perspectives.
Before Razdan came into the company, Dentsu India had already made some significant structural changes with the launch of its three business-led pillars – Creative, Media, and CXM. Very recently, Dentsu appointed Anita Kotwani to head its Media business as CEO, Media, South Asia, while Creative is led by Amit Wadhwa, CEO, dentsu India. On the other hand, Anubhav Sonthalia is CEO, dentsu CXM India & Merkle Sokrati India.
As the new team takes over the reins of Dentsu, they face the daunting task of restoring the company’s reputation, attracting new clients, and rebuilding a strong and motivated team.
Here are some reforms that Denstu is believed to have implemented in the last few months.
New KPIs for Leadership Team
Razdan is believed to have introduced fresh Key Performance Indicators (KPIs) for the entire leadership team. These changes specifically impact the three client-facing areas within the company – Media, Creative, and CXM (Customer Experience Management). Moving forward, the three services will be expected to operate in a more collaborative manner, as bonus and incentives for each line will now be interconnected.
In the past, individual departments of Dentsu may have been rewarded solely based on their independent performances. According to an insider, “Under the new system, the success or shortcomings of a particular line of work is likely to affect the bonus of others too. For instance, if the creative service achieves outstanding results but the Media or CXM services fall short of their targets, the creative service may not receive its bonus. This means that each service is now incentivized to support and improve the work of other lines.”
By breaking down silos and encouraging cross-functional collaboration, this move aims to maximize the agency’s potential and drive its success in the Indian market.
Newly Optimised Approach for Clients
To enhance the efficiency of client communication, the teams have been instructed to optimize their approach by minimizing the frequency of meetings and limiting the number of individuals involved in client interactions. “The emphasis has been placed on establishing a cohesive brand representation, rather than merely fulfilling specific roles such as media, creative, or customer experience management (CXM) partners,” said a source close to the development.
Regardless of the team members’ service lines or areas of expertise, they have been encouraged to act as ‘brand custodians’. This means that their primary focus should be on understanding and addressing the brand’s overall needs, rather than confining themselves to their respective service lines. “By adopting this broader perspective, they can contribute to the brand’s comprehensive requirements and ensure a unified approach across all aspects of client engagement,” claimed an industry source.
The Crisis and Restructuring
Dentsu India has gone through a lot of churning in the last two years. Be it exits, elevations, restructuring or new appointments, the agency has been in the news consistently since the beginning of the pandemic. One of the first things to hit the agency was the crisis around its acquired events company Fountainhead, which had to shut shop as early as March 2020.
Post this, the group remained in news either to announce a new appointment or an exit. The exits were linked to corruption charges post an internal audit that highlighted discrepancies in accounts. This always remained source based and was officially denied by the agency. Till date they claim the exits were an outcome of the restructuring plan. To make things worse, the agency lost two key clients worth the billing of around Rs 1000cr. The agency was also slapped a penalty of close to Rs 50cr. by one of its key clients in 2022 for not being able to meet its commitments.
Globally, in 2020, Dentsu announced it would cut the number of global brands from 160 to six as part of a major transformation. As part of this transformation, the company merged Vizeum and iProspect in March 2021.
In April 2021, the agency made some key structural changes in India and promoted Dentsu X India’s then Chief Executive, Divya Karani, giving her a larger South Asia role. She was elevated as the CEO for Media, South Asia. Here, media includes multiple agencies such as Dentsu X, Carat, iProspect and Posterscope. In this additional role, Karani became responsible for driving the global media strategy and delivery in South Asia, ensuring its alignment and relevance to the market. Early this year, Karani also moved out and the role was given to Anita Kotwani, CEO of Carat.
Besides, Kartik Iyer, erstwhile President–Media Brands and Amplifi, who joined the network’s market leadership team as its Chief Operating Officer (COO), Amit Wadhwa was named CEO of dentsu Creative India in June, 2021. Meanwhile, the CXM line was given to Anubhav Sonthalia.
After the merger of all creative agencies, the unified agency Dentsu Creative includes Dentsu India, Taproot Dentsu, Dentsu Webchutney, Perfect Relations, Isobar, WATConsult, Dentsu One, and Dentsu Impact.
The organisation operated without an India Head for two years. Between August and September 2021, six senior executives, mostly CEOs, left Dentsu International India. Four of these executives ran digital entities and divisions, which then contributed nearly 50% of the total revenue of the Japanese advertising giant in India.
If clients and industry sources are to be believed, without a leadership, the organization’s media business faced several challenges that ultimately led to its sluggish functioning. The company was slammed for lacking vision and direction, as things had gone on autopilot mode with little or no innovation.
“Following a series of departures at the top-level, clients voiced their dissatisfaction with the declining level of innovation. Some departments of the agency seemed to operate on autopilot, lacking proactive initiatives. A client expressed disappointment, stating that they received neither substantial cost savings nor fresh ideas to maintain their engagement,” said an industry source.
According to another significant client outside of Mumbai, their experience highlighted a recurring issue where meetings were attended by mid or junior-level employees who lacked decision-making authority. The absence of a clear vision, direction, and involvement from senior-level executives hindered the company’s progress, leading to a state of confusion and a loss of focus.
With so much baggage, Dentsu faces an intimidating mission of revitalizing the company’s standing, attracting fresh clientele, and reconstructing a robust and motivated team.
Motivating Employees
Recognising the importance of instilling confidence and reassurance within his team, Razdan is believed to have embarked on a proactive approach to connect with the employees. In less than two months since assuming the role of CEO, he has reportedly conducted one-on-one meetings with multiple Dentsu India employees.
“Following the tumultuous events that unfolded within Dentsu over the past two years, it is understandable that employees may have felt unsettled and uncertain about the future. The internal corruption scandals, the exodus of key personnel, and the loss of major client accounts, undoubtedly created an atmosphere of chaos and doubt,” shared an insider.
Razdan seems to be conveying a clear message – that the agency is on the path to recovery and its well-being and job security are of paramount importance.
Confidence Building in Clients
To personally connect with Dentsu’s clients and strengthen relationships, Razdan has reportedly touched base with a large chunk of clients in just two months.
What sets these client meetings apart is Razdan’s decision to go alone, without any additional team members or intermediaries. “By engaging in one-on-one conversations with clients, he aims to truly comprehend their goals, challenges, and aspirations, allowing him to tailor Dentsu’s strategies and services to their specific needs,” the insider shared.
Sources further claim that the aim is to gain deeper insights into clients’ businesses, objectives and expectations.
Investment in Technology
By recognising the evolving landscape of the media business and the increasing role of technology, Dentsu has identified tech investments as a key area of focus. As part of this strategy, Dentsu is believed to be considering significant investments in the tech sector, including potential acquisitions.
An industry source said, “By investing heavily in technology, Dentsu India aims to leverage innovative solutions to drive efficiency, effectiveness, and competitiveness. Technology has the power to revolutionize the way the agency operates, enabling streamlined processes, data-driven insights, and enhanced targeting capabilities. Embracing cutting-edge tech solutions can empower Dentsu to deliver more personalised and impactful campaigns, adapt to rapidly changing market dynamics, and stay ahead of the curve in the Digital age.”
One avenue through which Dentsu plans to bolster its tech capabilities is strategic acquisitions.
“However, things are at an early stage. We don’t know the details, but the company is believed to be open to the idea of acquisition while continuing to grow its in-house tech capabilities,” the source added.
Feedback Mechanism for Clients
One of the key complaints that clients had against dentsu was the unavailability of a senior leadership team for them, informed sources said. Clients felt that over the past two years, there was a lack of direct engagement and accessibility to key decision-makers within the agency. This absence of senior leadership involvement hindered effective communication, timely issue resolution, and the building of strong client relationships.
Clients had also expressed their concern that Dentsu was not placing enough emphasis on fostering innovation. They believed that the agency had missed opportunities to leverage emerging technologies, explore creative solutions, and stay ahead of industry trends.
To address these issues and ensure that client feedback is noted and acted upon promptly, Dentsu is reportedly planning to implement a dedicated feedback mechanism. This initiative indicates the agency’s commitment to creating open lines of communication, proactively addressing concerns and continuously improving its services, all based on client inputs.
The feedback mechanism will provide clients with a structured platform to voice their opinions, and share experiences and constructive feedback. However, sources did not reveal much about how the system would function.
Denstu Spokesperson’s reply to IMPACT’s queries
“We are taking deliberate steps to set a clear direction for our network. It is a conscious choice we are making, and we are confident of this chosen path. We are fully committed to providing client-centric solutions and exceptional services. We thrive on resilience, and with our new leadership on board, there is a huge sense of momentum and drive as we catapult toward growth. We have consistently delivered. We were honoured and humbled to win The Agency of The Year Title at Cannes LIons last year – the first Indian network to ever win the coveted title. It was historic and inspiring, and reflects our resilience as a network. This year too all three Dentsu India entries were recognized at Cannes. This place is home to brilliant talent and ideas. And this is also a network made of incredibly brave humans who continue to perform day after day in the face of adversity.”
