The invisible hand behind the Tokyo Olympics

Written by Ben Dooley and Hisako Ueno
It’s not an official sponsor of the Olympics. It will stay invisible to the tens of millions of viewers who start tuning on this week. But with out it, the Tokyo Games couldn’t have occurred.
The drive behind the Olympic curtain is Dentsu, an promoting goliath with close to legendary ranges of energy and affect in Japan.
As a gatekeeper to the world’s third-largest financial system, it has grow to be a serious determine in worldwide sports activities. It performed a distinguished position in Tokyo’s Olympic bid, then was named the Games’ unique promoting associate, bringing in a record-shattering $3.6 billion from Japanese sponsors.
With its practically full management over the Olympic advertising and marketing bonanza, Dentsu stood to be Japan’s largest winner of this 12 months’s Games. But because the pandemic has performed havoc with the occasion, an organization accustomed to all the time popping out on high finds itself in an unfamiliar place.
Its expectation of an infinite windfall has dwindled. The promoting campaigns and promotional occasions that sponsors normally mount within the months earlier than the Olympics have been canceled or pared down, depriving Dentsu of what analysts say is likely one of the most profitable elements of the sporting pageant.
And with the Olympics about to start, a few of Dentsu’s largest purchasers have begun pulling again. Toyota, a high sponsor, mentioned Monday that it might not run Olympics-themed tv advertisements in Japan through the Games, reflecting issues a couple of potential public backlash in opposition to corporations underwriting the occasion.
For the purchasers that proceed their Olympic promoting campaigns, Dentsu faces a critical take a look at of its message management. Polls present that about 80% of the Japanese public opposes holding the Olympics, which had been postponed by a 12 months and can now be held amid a state of emergency in Tokyo.
“What kind of message do you send right now? It’s a really difficult question, and sponsors are definitely troubled by it,” mentioned Osamu Ebizuka, a veteran of Dentsu’s sports activities advertising and marketing division who’s now a visiting professor of enterprise administration at J.F. Oberlin University in Tokyo.
Dentsu, requested how it might form its purchasers’ method towards the Olympics, mentioned that it was “not a sponsor,” so it was “not in a position to comment.”
Even with its challenges, Dentsu stays an unparalleled drive in Japan. It is by far the nation’s largest advertising and marketing agency, with a grip on practically 28% of the nation’s huge promoting finances.
Dentsu began life in 1901 as a information company earlier than realizing it was extra worthwhile to bundle its content material with commercials. In the lead-up to World War II, it was merged right into a state-run information service that pumped out propaganda for Japan’s Imperial Army.
Under U.S. occupation, the group break up into three elements: the advert company Dentsu and Japan’s two largest information companies, Kyodo and Jiji Press.
In the years since, Dentsu has grow to be hard-wired into practically each main establishment in Japan. In addition to its many company and media connections, it has served because the unofficial communications division of the governing Liberal Democratic Party over its greater than 75 years in practically steady energy.
The conspiratorially minded typically confer with the corporate as Japan’s CIA, a puppet grasp utilizing its huge community to collect info and form the nation’s destiny.
The comparability is fanciful, mentioned Ryu Honma, an writer who started writing in regards to the firm after working at its rival Hakuhodo. But the corporate has unquestionably made itself indispensable to Japan Inc.
Dentsu is the nation’s fixer, with a status for getting issues finished, irrespective of how troublesome. For years, it was recognized for a ruthless work ethic expressed in a credo known as the Devil’s Ten Commandments, instructing staff to “never let go of a job, even if it kills you.”
Its purchasers are a who’s who of company Japan — a part of a roster, Dentsu likes to say, that features 95 of the world’s 100 high advertisers. It recruits from the ranks of Tokyo’s high universities and is claimed to point out a desire for the kids of politicians, celebrities and titans of business.
Whereas most advert corporations outdoors Japan keep away from conflicts of curiosity by representing just one firm in any given business, Japanese corporations are sometimes much less unique. Dentsu regularly works for competing corporations in the identical sector, one of many keys to its ubiquity.
Dentsu gives nearly each form of service associated to communications. Dentsu advert executives promote commercials directed by Dentsu, starring actors represented by Dentsu, to TV stations the place Dentsu manages advert gross sales.
The firm buys up whole blocks of airtime earlier than it has offered advertisements to fill them. Its maintain on tv promoting is so tight that Japan’s competitors regulator has twice issued it warnings.
It exerts appreciable affect on conventional media, each broadcast and print, that are loath to offend the corporate and its purchasers for worry of shedding advert {dollars}.

The firm’s ties to the Olympics date again to the 1964 Tokyo Games, when Dentsu was answerable for public relations. The Games had not but been commercialized, and Dentsu’s position was extra an indication of its stature and political sway.
But in 1984, when the Los Angeles Olympics grew to become the primary to rely solely on personal funding, Dentsu rushed to place its company purchasers within the combine.
Dentsu took the lead within the bid course of when Japan hosted its second Olympics, the 1998 Winter Games in Nagano. And when Tokyo determined to vie for the 2016 Summer Olympics, the corporate was the apparent selection.
Tokyo misplaced out to Rio de Janeiro after a Dentsu-led bid that was extensively criticized for being ham-handed and exorbitantly over finances. Regardless, Dentsu got here out forward, pocketing nearly 87% of the Tokyo committee’s expenditures, in line with a authorities listening to on the time.
Concerns in regards to the firm’s 2016 efficiency didn’t forestall it from enjoying a big position within the 2020 bid, mentioned Nick Varley, a guide who was introduced on to shepherd the displays.
The bid committee assured him that Dentsu wouldn’t be concerned, he mentioned. But when he acquired his contract, he was stunned to seek out it was an settlement with Dentsu.
On the floor, at the very least, Dentsu largely supplied logistical assist and dealt with the home aspect of the marketing campaign, Varley mentioned.
But behind the scenes, the scenario seems to have been murkier.
The French authorities have spent years investigating allegations of corruption surrounding the Tokyo 2020 bid course of. Among the questions is the position {that a} highly effective former Dentsu worker performed in lobbying individuals with long-standing connections to the corporate in an effort to sway the end result.
The scandal led to the resignation of the top of the Tokyo Olympic committee. Dentsu has mentioned it had no involvement within the matter.
Regardless of how the Games had been received, the corporate stood to make an infinite revenue. Within a 12 months, the Tokyo Olympic committee had named Dentsu its advertising and marketing associate, after a bidding course of that opponents described as a foregone conclusion.

Dentsu was in want of a win. It has struggled to regulate to the rise of digital media. It was broken by an enormous overcharging scandal and a high-profile suicide linked to the corporate’s intense work tradition. And, even earlier than the coronavirus, the agency had begun posting losses.
But when the pandemic hit, Dentsu’s Olympic guess went bitter. While the precise monetary impression on Dentsu stays unclear, mentioned Ebizuka, the previous firm govt, there is no such thing as a doubt that it’s “suffering.”
For now, all Dentsu can do is hope for one of the best because it tries to assist its purchasers navigate the unsure scenario, Ebizuka mentioned.
They haven’t any selection however to ship a “subtle message,” he mentioned: “Let’s look toward the future and just get through the pandemic together.”
This article initially appeared in The New York Times.