Dentsu Public Relations: Agency Business Report 2015

Dentsu Public Relations is considerably smaller than its advertising and media agency counterpart, with just two offices and a staff of 235. Nonetheless, that represents considerable scale in Japan, where public relations evolved much later than advertising.

Takehiko Chikami, (C) Getty Images
Takehiko Chikami, (C) Getty Images

Principal: Takehiko Chikami, Tokyo, President
Ownership: Dentsu Inc.
Offices: 2; Tokyo, Osaka
Revenue: Not disclosed; estimate US$42,000,000
Headcount: 235

Dentsu Public Relations is considerably smaller in scale than its advertising and media agency counterpart, with just two offices (in Tokyo and Osaka) and a staff of 235. Nonetheless, that represents considerable scale in Japan, where public relations evolved much later than advertising.

The agency declined to provide revenue figures for 2014. On paper, the year was relatively uneventful, with no new office openings and no key senior hires or management changes. However, it claims the top three services—media relations, digital and event management—all grew, and it added two new practice areas to its offering: sports marketing and a PR-staffing service. It lists its other practice areas as TV promotion (unusual for a PR agency), corporate communications, research (including social listening), crisis communications (including issues management), global communications and healthcare.

The agency also declined to name any specific companies as clients. However, the top three sectors it represents are the public sector (national and local governments), beverages and information technology. It services 30 per cent of its clients on a retainer basis.

In an interview with PRWeek in Tokyo, president Takehiko Chikami says that the agency has benefited from the mood of increased optimism in Japan, spurred in part by the country’s winning 2020 Olympics bid. A large part of the agency’s activities last year centered on promoting understanding of Japan in the international market, on behalf of government agencies. It also set up a division devoted to the Olympics and Paralympics, with Kuniko Obinata, a Nagano Paralympics gold medalist skier as an advisor, and one to support Japanese corporations in their activities around the Olympics.

"Major Japanese companies are thinking of 2020 as an opportunity to showcase their capabilities for the future," Chikami says.

He also notes that companies, including some medium-sized businesses, were targeting international expansion. As a result, Dentsu PR has seen an increasing number of global assignments. At the same time, Chikami admits that finding the talent to meet this demand is proving to be a challenge.

"Unfortunately, because of our educational system [in Japan], there is a lack of human resources capable of [taking on] global projects," he said. "We need to recruit more capable staff."

Given that Dentsu PR only has offices in Japan, the agency’s ability to service clients on a truly global scale is somewhat limited. On the positive side, however, it is able to draw on an international partnership with MSLGroup, and a joint-venture with BlueFocus in Beijing.

While traditional media relations remains a large part of the company’s activities, Chikami says 2014 saw digital communications—in particular, content marketing—become a core part of the business. Two years ago, the agency installed a production team to develop video content, and this continues to play an important role in securing new business. The agency has also invested in staff with an editorial background to build a brand-journalism offering.

And in line with the global trend, Chikami says the boundaries of PR in Japan are also expanding to encompass areas that would typically have been the preserve of advertising agencies. As well as producing content, the agency provides CRM services for a global retail company, which he says is unusual but indicative of a shift towards more balance between PR and advertising.

"Especially in digital communications, all disciplines are mixing," Chikami says. "All agencies are fighting for share. This competition raises the quality of service. Digital, PR and advertising agencies fight for an assignment, and often the winner of the account stands to become the lead agency for the client’s integrated campaigns."

Chikami says that non-traditional activities now account for 30 percent of the agency’s business, but that he expects that to grow to 50 percent over the next few years. Looking ahead, Chikami says increasing the share of digital marketing in the agency is a priority. He aims to improve the way in which the agency works with influencers in the digital sphere, and to integrate digital and traditional media activities more effectively.

At the same time, there is room for growth in more standard areas such as corporate communications: Chikami cites a survey conducted by a recently established strategy research institute within the agency, which highlighted a lack of confidence among the corporate PR divisions of Japanese companies in creating, editing and distributing information, and in crisis management. With this in mind, Dentsu PR last year set up various advisory committees, which Chikami says include members who can handle thorny challenges.

"I would like to strengthen the quality of corporate communications [in Japan], as many Japanese corporations have complicated issues," he says.

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