Probe into Dentsu overcharging clients in Japan reveals catalogue of failures

An investigation into overcharging at media agency Dentsu in Japan has revealed almost 1000 financial and reporting errors, with 96 affected advertisers.

The company has vowed to take disciplinary actions against executives.


Dentsu listed 40 cases of overcharging to 10 advertisers – where the requested number of digit ads were not fulfilled – and more than 950 cases of substandard reporting.

Of those, 537 related to daily reports that “were not in line with advertiser instructions or expectations”, with some placement details incorrect “albeit without any impact on total digital posting numbers”.

A further 416 related to invoicing discrepancies.

In total, the series of blunders amounted to 114.82 million Yen.

The investigation was launched after the agency was rocked by revelations in September that it has overcharged clients to the tune of ¥230 million (US$2.3 million).

Investigators probed 214,000 invoices issued to 2,263 clients between November 1 2012 and July 31 2016. The investigation spanned 17 Dentsu subsidiaries, all based in Japan.

Dentsu stressed all irregularities were limited to the domestic market.

The company admitted in a statement that “it did not build and operate an adequate structure for standardizing work, separating duties, and conducting checks.”

It also “did not provide advertisers with clear definitions of services scope or disclaimers”, failed to to “fully recognize operational risks relating to business errors or other shortcomings and “did not sufficiently standardize flows for following up on errors”.

The agency also identified “human resources management issues”.

“Although the rapid growth of digital advertising has greatly changed the skillset and workload requirements at business sites, Dentsu did not adequately assign or train human resources in qualitative or quantitative terms,” it said.

“With progress in digital advertising rapidly changing the business structure, Dentsu expanded its business with the cooperation of domestic digital companies within the group. Coordination was inadequate, however, as communication gaps arose in the course of business amid a rapidly increased diversity of human resources.”

Dentsu said measures have been put in place to “prevent such issues from recurring by eradicating the causes of unsuitable practices”.

“Dentsu is confident that these practices will not occur again due to the measures put in place,” the statement said, adding that it “offers sincere apologies for the great concern and trouble that this matter has caused its advertisers, shareholders and other stakeholders.”

The company said it will “clarify responsibility for these issues by taking disciplinary actions against executive officers and have taken appropriate disciplinary actions against other employees in line with in-house rules.”


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.