Jerry Buhlmann on Google, suicide in Japan, and globalisation

He said Google and Apple are "new industrial powers" that can rival "big spenders" such as Toyota in terms of capital expenditure but cautioned they are "not quite as dominant in a number of markets".

Buhlmann, who was speaking at the International Advertising Association lunch today, added: "They’re not really as big a global power as we all perceive them to be in the UK or the US."

He said that agencies should partner with such companies: "In a fast moving business you have to make choices – particularly around data and technology – what you invest in internally, what you partner with and what you outsource. And businesses like Google and Facebook are business that we will partner with.

"What we have to do is use our leverage and authority to help them in areas that are more value for clients, and what we have to do for ourselves is make sure we get the best value out of that too. It is a partnership. Whilst they’re hugely powerful, they aren’t really global."

When asked about the suicide of a young woman at the network’s Japan office after excessive overtime (see our archive of coverage of this topic), Buhlmann said that the issue is a problem in Japanese society but he acknowledged that Denstu was part of the problem. It has since introduced new rules including lights out in its buildings at 10pm.

He said: "That very sad story was in Japan in December 2015. That young lady was working too hard and unfortunately that is very similar to many young people in Japan because of the labour market culture they have there.

"And that very sad story does relate to Dentsu and people working at 100 hours a week, and they have an issue as a society in relation to that work life balance. The business issue is a Japanese issue as well that the prime minister in Japan is focused on, it’s one of his key priorities to change the labour law in Japan."

Earlier in the discussion Buhlmann said that one of the key criteria when making an acquisition is whether the owners of the business want to be part of the Dentsu Aegis Network culture.

In the last four years, the group has bought 200 businesses and Buhlmann said that 70 percent of them have stayed with Denstu Aegis Network post-earnout "against an industry average of 30 percent".

He added: "We are very good at choosing the people who want to stay."

Businesses Dentsu Aegis Network has acquired in recent years include the contract publisher and content agency John Brown Media, the mobile agency Fetch and the US independent agency Merkle.

Buhlmann also talked about globalisation and the digital economy, which he believes are the "two biggest forces of the world". He said that they may have helped with growth and wealth, "but what it hasn’t brought is the spread of prosperity".

He continued: "That has created a combination of an environment where a lot of people who feel economically or socially disenfranchised are now voting for protectionism."

About Brexit, Buhlmann said that as long as there is a "free trade environment between the UK and the rest of Europe then that’s relatively positive".

At Advertising Week Europe last year, he said that it would not be in the interest of the UK to leave the European Union because it is a "fastest growing economy in the largest trading block".

On fake news, Buhlmann said that it is "no bigger challenge in ensuring your advertising is in a brand safe environment".

He also revealed that 80 percent of Dentsu’s workforce is under 40 years of age.