Tim Andree, Executive Chairman, Dentsu Aegis Network & Executive VP, Member of the Board, Dentsu Inc., has turned the Japanese ad agency into a global performer. An M&A specialist, he talks of the Aegis Media acquisition and how it has panned out in India, with Ashish Bhasin, ?Chairman & CEO South Asia Dentsu Aegis Network and Rohit Ohri, ?Executive Chairman Dentsu India & CEO Dentsu Asia Pacific (South) together helming the Dentsu Aegis Network
By Priyanka Mehra
Tim Andree, Executive Chairman, Dentsu Aegis Network & Executive VP, Member of the Board, Dentsu Inc., gives a whole new meaning to the phrase ‘standing tall’ with his 6’ 11” frame. Andree, who has earned himself the moniker of acquisition specialist, definitely stands out in any room, be it in or out of Japan.
The agency network is clearly on a growth trajectory in India, and has seen one of the smoothest mergers between Dentsu and Aegis Media, forming the Dentsu Aegis Network (DAN).
“We’ve been growing our organization through acquisitions and those investments have paid off extremely well. We began with smaller investments and then we closed the deal with Aegis - that was the largest transaction in the history of our industry at about $ 4.9 billion. The investment thus far has proven to be very sound and strategic. The net result about 18 months after the close of the deal with Aegis is that we have integrated the businesses very well. Globally, we have a new business track record; in the first half of this year, we have net new business of about $2.8 billion. So, with great momentum in the business, we’re operating at an organic growth rate of almost two or three times that of our peer group now. This year, we are close to 10% organic growth while the rest of the industry is still at 2.5 to 3%,” shares Andree.
THE GROWTH TRAJECTORY
Within two years of Andree joining Dentsu as CEO of its US agency in 2006, Dentsu America was ranked by Ad Age as the fastest growing US agency. That same year, Andree was named Dentsu Inc.’s first non-Japanese Executive Officer. There has been no looking back for Andree ever since. In 2010, Dentsu consolidated its operations in the Americas, Europe and Australia by launching Dentsu Network West and named Andree CEO. In 2012, Andree was named Senior Vice President of Dentsu Inc., and President & CEO of the newly formed Dentsu Network, which consolidated operations outside Japan under one organization. Under Andree’s leadership, Dentsu’s global operations grew both organically and through notable acquisitions such as ATTIK, mcgarrybowen, 360i, Firstborn, Bos, LOV, Taproot, and Mitchell Communications Group.
In March 2013, Dentsu completed the acquisition of Aegis Media, the largest transaction in the company’s history, adding agencies such as Carat, Isobar, iProspect, Vizeum and Posterscope to the Dentsu Group. Concurrently, Andree was appointed Executive Chairman of Dentsu Aegis Network, a new operating unit overseeing the global operations of the combined entities. Andree was also named Executive Vice President of Dentsu Inc., and appointed its first non-Japanese Director, Member of the Board.
In terms of revenue, whereas in 2006, international agencies contributed less than 5% of Dentsu’s annual revenue, today, 48% of revenues are generated by Dentsu operations in 124 countries worldwide.
The Talent Equation
Building the right capability to service clients along with hiring the right talent is the double pronged approach of the Dentsu Network.
“I’m very pleased that I’m actually sitting in a room where I first interviewed Rohit (Ohri) and it’s bringing back very good memories. The fact that we’ve been able to recruit that type of executive for Dentsu in a key market like India has made a huge difference for us. You get good people together, align them well and get out of their way and they tend to perform fantastically,” says Andree of the network in India.
Meanwhile, the acquisition of Taproot has been a game-changer for Dentsu, changing the agency’s perception in the Indian market. “It was a real coup when Aggie and Paddy decided to align Taproot with Dentsu. They have set the creative bar not only here in India, but across APAC, and that has been a magnet for talent for almost all of our agencies. They have an extraordinary creative offering, an extraordinary culture and way of doing things and it has been infectious to the rest of our organization. It has made the whole organization better story-tellers. From a creative standpoint, we have always been known for our media or innovation. Now we’re getting known for cutting edge creative ideas.”
The DAN Edge
Clearly, the collaboration has added strengths neither of the agencies would have been able to achieve in the past. It is what Andree refers to as East-West. “We have clients in the East that we’ve moved to the West. Clients of western-based companies have been able to grow their business by coming together. Proctor & Gamble would be the perfect example. We’ve really expanded their business since coming together. Dentsu has got the business in Japan for more than four years but now with Aegis we’ve been picking up P&G’s business in markets like Italy and Canada and market by market we’ve been growing. That kind of West-East example is well in force. And then as we come together, we’ve been very competitive in new business pitches,” explains Andree, hinting that some service areas weren’t fully built out earlier.
The same is true for the Aegis group, which wasn’t very strong in Europe, with some operations in the US, and weak spots in Asia. The Dentsu group, on the other hand, was fast in the US and had virtually nothing in Europe. The coming together of the two has become a good new option for global marketers who have consolidated their business, Microsoft being the most recent example of this.
“We continue to grow our business; we haven’t lost any clients. Our net new business is probably strongest in the industry right now globally,” says Andree on a positive note.
strategy at the core
Andree believes that the first and most important point in M&A transactions is the overall strategy. “All M&As and the use of capital should be to support your business strategy, not simply to get larger scale in itself, that is not a strategy. The biggest thing is to have a business strategy and to understand well what you need, going into the market, how well the potential organization who’s joining you matches that… How organizations that join you complement what you can offer clients or complement what you can do for employees... Critically, there has to be a story there to tell people why this is good for the client and why this is good for talent. If you don’t have that story, it is going to be very difficult,” he says. “We don’t like people joining our organization and being unhappy that they sold the company to us. So we do a lot of advance work to make sure we have a shared vision and shared values. Cultures can and should be different. I’m an American, I’m not Japanese. We have acquired a British organization; we have operations in 110 countries. Those cultures around the world are very different, but as long as organizations share values and vision, and complement assets, it is to their advantage.”
The best is yet to come
Andree’s stature serves various purposes. There is a story that Japanese commuters would lean against an affable Andree in packed trains, making the most of his frame to catch a power nap. As of now, he leads the network’s vision to bring integrated and holistic specialized solutions to clients, by having complementary services that can work well together. This in turn will end up mitigating the cost of convergence or the complexity present in the market today, making the network and its agencies a very valuable partner to the client.
To Andree goes the credit for making the Japanese agency a network to be reckoned with globally, with his strategic acquisitions and ability to pick the right talent. So what is next on his agenda? “I don’t sit around trying to think, ‘Oh, what I’ve done well.’ What’s keeping me excited and what’s keeping our teams excited is the headroom and opportunities ahead of us. We still have a lot more to do. We’re the newest kind of global group. We’re operating under a very different model than a traditional holding company. We’ve got a lot of momentum right now and we are going to remain acquisitive. We’re looking for the right people, the right partners and the right talent. I hope the best deal I do is the next one,” says Andree.
Feedback: priyanka.mehra@exchange4media.com
