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Invisible hand of the Tokyo Olympics

Tokyo — Not an official sponsor of the Olympics. It remains invisible to the millions of viewers who will start tuning this week. But without it Tokyo Games It couldn’t happen.

The Olympics ended with Dentsu, an advertising Goliath with near-mythical power and influence in Japan.

As the gatekeeper to the world’s third largest economy, he has become a major figure in international sports. After playing an important role in the bid for the Olympic Games in Tokyo, he was nominated as the exclusive advertising partner for the Olympic Games and brought a record $ 3.6 billion from Japanese sponsors.

Dentsu has almost completely seized the great marketing success of the Olympic Games and became Japan’s largest winner of this year’s competition.But as the pandemic has There was a lot of confusion at the event, Companies that are accustomed to always being at the top find themselves in an unfamiliar position.

Expectations for a huge storm have diminished. Advertising campaigns and promotional events, usually held months before the Olympics are canceled or reduced, deprive Dentsu of analysts being one of the most lucrative parts of the sports pageant.

And as the Olympics are about to begin, some of Dentsu’s largest clients have begun to withdraw. Top sponsor Toyota said Monday that it would not broadcast Olympic-themed TV ads in Japan during the Olympics. This reflects concerns about the potential public backlash against the companies that are undertaking the event.

Dentsu faces serious message management challenges for clients who continue their Olympic advertising campaign. poll It shows that about 80% of the Japanese people are against hosting the Olympics. The Olympics will be postponed for a year and will be held in a state of emergency in Tokyo.

“What kind of message are you sending now? It’s a very difficult question, and the sponsors are definitely suffering from it,” said Ebizuka, a veteran of Dentsu’s sports marketing department, who is currently a visiting professor at JF Oberlin University in Tokyo. Osamu says.

When asked how to shape the client’s approach to the Olympics, Dentsu said it was “not a sponsor” and “not in a position to comment.”

Despite that challenge, Dentsu remains unmatched in Japan. It is the largest marketing company in the country and accounts for nearly 28% of the huge advertising budget in the country.

Dentsu began its activities as a news agency in 1901 before realizing that it would be more profitable to package content with advertising. It was integrated into the state-run news agency that sent out the propaganda of the Imperial Japanese Army for World War II.

Under US occupation, the organization was divided into three parts: advertising agency Dentsu and Japan’s two largest news services, Kyodo News and Jiji Press.

Since then, Dentsu has been incorporated into almost every major institution in Japan. In addition to connecting with many businesses and the media, it has served as the informal communications sector of the governing Liberal Democratic Party with almost continuous power for over 75 years.

Conspiracy theorists sometimes refer to the company as the Japanese CIA. This is a puppet master who uses its vast network to gather information and shape the fate of the country.

Ryu Honma, who started writing about the company after working at rival Hakuhodo, said the comparison was fantastic. However, the company is undoubtedly an integral part of Japan Inc.

Dentsu is a national fixer and has a reputation for getting things done no matter how difficult it may be. For years, it has been known for its ruthless work ethic, expressed in a belief called the Ten Commandments of the Devil, instructing employees to “never let go of their jobs, even if it kills you.” I will.

That client is who in Japan for the company — part of the roster, Dentsu says it includes 95 of the world’s top 100 advertisers. Adopted from the ranks of Tokyo’s top universities, it is said to prefer children of politicians, celebrities and industry giants.

Most non-Japanese advertising companies avoid conflicts of interest by representing only one company in a particular industry, but Japanese companies are often not monopolistic. Dentsu frequently works with competitors in the same sector, one of its ubiquitous keys.

Dentsu offers almost all types of services related to communications. Dentsu’s advertising executives sell Dentsu’s commercials, starring Dentsu’s leading actors, to TV stations where Dentsu manages advertising sales.

The company buys an entire block of airtime before selling and filling ads. Japanese competition regulators have issued two warnings because the retention of TV ads is so tight.

It has a significant impact on both broadcast and print traditional media, which hate to offend the company and its customers for fear of losing advertising costs.

Dentsu’s television dominance makes Dentsu an integral partner for Japan’s political class. It was Dentsu who persuaded Prime Minister Shinzo Abe at the closing ceremony of the 2016 Rio de Janeiro Olympics, dressed as Nintendo’s video game series character Mario.

Sports have long been an important part of a company’s business. Dentsu has long led the International Olympic Committee’s marketing department, saying that international sporting events were one of the first advertising agencies to recognize how to raise client awareness abroad and help them enter new markets. Michael Payne, who was there, said.

Dentsu will leverage its role as a conduit to Japan’s advertising spending to become an integral part of the world’s athletics and swimming finances, while at the same time building strong relationships with FIFA, football governing bodies, Major League Baseball and more. I have come.

The relationship between the company and the Olympics dates back to the 1964 Tokyo Olympics, where Dentsu was in charge of public relations. The convention has not yet been commercialized, and Dentsu’s role was a manifestation of its position and political upheaval.

However, in 1984, when the Los Angeles Olympics first became completely dependent on private funding, Dentsu rushed to mix corporate customers.

Dentsu led the bidding process when Japan hosted the second Olympic Games, the 1998 Winter Olympics, in Nagano. And when Tokyo decided to compete in the 2016 Summer Olympics, the company was a natural choice.

Tokyo lost to Rio de Janeiro in a Dentsu-led bid. Anyway, Dentsu went forward and pocketed almost 87 percent of the Tokyo Commission’s spending. Government hearing At the time.

Concerns about the company’s 2016 performance did not prevent it from playing an important role in the 2020 bid, said Nick Burley, a consultant brought to the presentation shepherd.

He said the bidding committee assured him that Dentsu would not be involved. However, when I received the contract, I was surprised that it was a contract with Dentsu.

At least superficially, Dentsu primarily provided logistical support and handled the inside of the campaign, Burley said.

But behind the scenes, the situation looks darker.

French authorities have spent years investigating allegations of corruption surrounding the Tokyo 2020 bidding process. Some of the questions are the role played by strong former Dentsu employees in lobbying people who have long-standing ties to the company to influence the outcome.

The scandal led to Resignation of the head Dentsu of the Tokyo Organizing Committee said it was not involved in this issue.

Regardless of how the tournament was won, the company made huge profits. The Tokyo Organizing Committee has nominated Dentsu as a marketing partner within a year after the bidding process, which competitors took for granted.

The first thing Dentsu did was to break the habit of having only one company to represent each product category. For example, games in the past were sponsored by only one bank or airline, while Tokyo 2020 is sponsored by two banks each. This allowed Dentsu to use that connection to persuade about 70 domestic companies to pay more than $ 3 billion to support the game.

Terrence Burns, a sports consultant and former International Olympic Committee executive, said:

“If you’re going to do a sports marketing business in Japan, to be honest, they’re like your first and last destination. They have a lot of cards,” he added.

Dentsu needed victory. I’m having a hard time adapting to the rise of digital media. It was damaged by a large overcharge scandal and a high-profile suicide associated with the company’s intense work culture.And even before the coronavirus, the company started Post loss.

But when the pandemic broke out, Dentsu’s Olympic bets became sour. The exact financial impact on Dentsu remains unclear, but former company executive Ebisuka is undoubtedly “suffering.”

So far, Dentsu can only do its best to help clients overcome uncertainties, Ebitsuka said.

They have no choice but to send a “subtle message”. “Let’s look to the future and get over the pandemic together,” he said.

Invisible hand of the Tokyo Olympics

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