Key facts
- Dentsu Group will reduce the number of its overseas subsidiaries by up to 30% by fiscal 2028.
- The company aims for over JPY 50 billion in operating cost reductions by FY2027 and a 16% operating margin by FY2028.
- JPY 3.7 billion has already been invested in AI, Media, and Data & Technology in the first half of 2026.
- AI will be integrated across Dentsu's marketing and operating model, including planning, content activation, and project management.
- APAC is identified as the 'Next Growth Base' for the company.
- Global HQ costs are projected to decrease by approximately 30% by FY2028.
Japanese advertising giant Dentsu Group is set to significantly restructure its international operations, announcing plans to reduce its overseas subsidiaries by up to 30% by fiscal year 2028. This strategic move comes as the company faces intensifying competition from tech and consulting firms leveraging artificial intelligence in the marketing landscape.
Dentsu aims to achieve substantial operating cost reductions, targeting over JPY 50 billion by FY2027, while striving for a 16% operating margin by FY2028. A key component of this transformation involves a substantial increase in investment in Media, AI, and Data & Technology, with JPY 3.7 billion already allocated in the first half of 2026. The company is placing AI at the core of its strategy, pursuing 'AI-powered marketing transformation' and embedding AI across its entire operating model, from planning and decision-making to content activation and project management.
Beyond internal development, Dentsu plans to create proprietary AI solutions and monetize its data assets through an 'open ecosystem' approach, collaborating with partners and co-creating solutions. Media remains a central focus, with efforts to enhance its value and scale media-led offerings globally. The company has designated APAC as its 'Next Growth Base', planning greater investment and collaboration within the region, particularly in data, social, and commerce.
This strategic overhaul also includes a significant cut in Global Headquarters costs, expected to decrease by approximately 30% by FY2028. Dentsu is also considering reducing the number of international entities, with plans to cut 70-80 in FY2026 and a further 50-80 by FY2028, as it works to eliminate loss-making markets and ensure all regions contribute to shareholder value by FY2028.