Inside dentsu’s global challenges: Acquisition spree and integration hurdles 

The homepage of Dentsu’s global website boldly declares: “In a world of complexity, we offer simplicity through consistent, world-class services and integrated solutions.” 

Ironically, the Japanese ad major faces growing operational complexities within its own network. At the heart of its challenges lies the partial integration of its extensive international acquisitions, a dynamic that has added cost pressures and renewed discussions about a potential realignment of its global business portfolio.

Read more on acquisition talks

Once positioned as a bold challenger to global holding giants like WPP, Omnicom, and Publicis, Dentsu invested heavily in acquisitions to accelerate international expansion and diversify revenue streams. However, a review of the multi-year, Merger & Acquisition-driven Mid-Term Management Plan (2021–2024) reveals that the ambitious plan has not fully delivered the intended scale or profitability. 

The company’s FY2025 annual report highlights “incomplete integration, high-cost structures, and slower portfolio realignment” as key factors behind its operational challenges. These complexities have amplified portfolio inefficiencies and added profitability pressures across several international markets. 

In some cases, the group is also carrying legacy assets, making strategic pivots more difficult at a time when competitors are streamlining operations and consolidating strengths.

Notably, Dentsu’s Japan business — contributing 42% of total net revenue — continues to perform strongly, recording 5.3% organic growth in the first half of 2025. However, its international operations remain under pressure, with the Asia-Pacific region alone reporting an 8.9% revenue decline, resulting in a consolidated dip of 0.2%, reports stated earlier. 

e4m reached out to Dentsu’s global office for clarity on the issues cited in the annual report and their current stance on sale of global operations; however, officials declined to comment.

Added layers pushed up cost

Founded in 1901 in Tokyo, Japan, Dentsu operates in about 120 countries worldwide. In 2024, it reported net revenue of 1.2 trillion yen (approximately $9.2 billion) and employed close to 68,000 professionals globally.

Read more on Dentsu topping charts

For years, industry chatter suggested that Dentsu’s rapid acquisition strategy left the organization operationally fragmented and siloed. Insiders told e4m off the record: “The acquisition spree created a sprawling network that’s complex to manage. The added layers have pushed up costs and slowed responsiveness to client needs.”

In India, for instance, dentsu was the most aggressive acquirer topping acquisition charts between 2016-2024, according to COMvergence’s Global Marcom Agency Acquisitions Benchmarking Study 2024 released early this year. Over this period, it acquired seven companies, including Ugam Solutions (1,840 staff, 2019) and Extentia (750 staff, 2022) with 3,600 employees. 

“The pace of acquisitions often brings operational integration challenges and leadership churn. It is widely believed that several senior leaders of dentsu exited the agency in recent years, citing limited synergy realization, growing internal friction, and leadership misalignment,” said an insider. 

CT&T Priorities 

Compounding its integration journey, Dentsu’s strategic pivot towards Customer Transformation & Technology (CT&T) as a primary growth driver appears to have diluted focus on strengthening its media and creative capabilities — historically its strongest differentiators, many observers believe. 

While competitors successfully merged technology, data, and creativity into unified client offerings, Dentsu acknowledges in its report that achieving this balance remains a “work in progress”. A measured approach to internal investment, slower innovation cycles, and operational complexity have together tempered its competitive positioning in a fast-evolving ad-tech landscape.”

Other disruptions

These internal shifts in dentsu are unfolding against a backdrop of economic headwinds, which is leading to a transformational change in the global advertising ecosystem. The ongoing Omnicom-Interpublic merger has altered competitive dynamics, while WPP has undergone large-scale restructuring to protect margins and improve efficiencies.

Simultaneously, AI-driven marketing tools, increasing client demand for personalised, multi-platform campaigns, and tightening regulatory scrutiny on data privacy and sustainability reporting have disrupted traditional advertising models. While leaner, more integrated rivals have adapted swiftly, Dentsu’s fragmented structure and slower decision-making processes have made rapid pivots more challenging.

The ‘One Dentsu’ Reset

To overcome the challenges, Dentsu has launched — One Dentsu initiative — a comprehensive restructuring programme aimed at unifying operations, streamlining decision-making, and driving stronger collaboration across markets. The annual report highlights the need to reassess underperforming businesses, restore profitability, and focus on high-growth opportunities to stabilize international operations.

Industry experts see this as a critical turning point for the company. As one senior executive from a rival holding group noted on condition of anonymity, “This is Dentsu’s opportunity to simplify, integrate, and refocus. If they can realign priorities effectively, they’ll strengthen their ability to compete. But without sharper execution, they risk ceding further ground to faster-moving rivals.”

As part of this reset, Dentsu is expected to rationalise around 8% of its international workforce — approximately 3,400 roles — primarily across back-office and headquarters teams. Client-facing and sales roles are expected to remain largely unaffected.

Additionally, the company has outlined initiatives to achieve cost efficiencies of nearly JPY 52 billion (AUD 540 million) by 2027, signalling its commitment to restoring operational agility and financial discipline.