Decoding the Europe, Middle East, and Africa Region: Interview with Giulio Maregori, CEO of dentsu EMEA

The Dentsu Group operates in over 145 countries worldwide. Under its newly established management structure, the "Group Management Team," the Group is structured around four key business regions: Japan, Americas, APAC, and EMEA. This series interviews top management leading each overseas business region. We explore how leaders in each region are developing their businesses through new opportunities while tackling challenges head-on. We present these insights alongside regional trends.

For the second installment, we spoke with Giulio Maregori, CEO of dentsu EMEA, based in Milan, Italy, about trends in the EMEA (Europe, Middle East, Africa) region.

*The interview was conducted online on May 10, 2023.

 

Giulio Malegori, CEO of dentsu EMEA. Member of the Group Executive Management team at the Dentsu Group. Joined Aegis Media Group in 2010 as President and CEO of its Italian operations. Became Head of Southern Europe in 2013 and assumed his current position in 2017. His hobby is listening to music, and he enjoys visiting record shops when in Tokyo. He is from Italy.

 

Over 40 diverse and complex markets

――First, could you tell us about your current responsibilities?

Currently, as CEO of dentsu EMEA, I oversee the overall growth strategy and business execution for the region. I joined the former Aegis Media in 2010 as President and CEO of its Italian operations, became Head of Southern Europe in 2013, and have served as CEO of the EMEA region since 2017.

――Which markets within EMEA are showing growth?

EMEA covers over 40 diverse regions, making it a highly complex market. Across the region, advertising spend is projected to grow between 1.9% and 2.6% in 2024. The UK and France are the fastest-growing markets. Regarding investment and growth in Germany's advertising market, advertising spend is on a recovery trajectory, with positive growth forecast for 2023.

Europe is currently feeling the impact of the situation in Ukraine more strongly than other regions due to its geographical proximity. Needless to say, inflation rates have risen significantly in almost all markets. Considering the effects on energy supply and the procurement of raw materials and components, the impact on this region is immense. As a result of these developments, GDP growth rates are also being affected.

――What about Africa?

Africa is a vast region with a very large population. However, from a business perspective, it is relatively small in scale and remains a media-centric market. Furthermore, economic conditions vary significantly between countries. For dentsu EMEA's business, sub-Saharan Africa, including South Africa, is growing steadily.

――How do you view consumers in the EMEA region?

At the macroeconomic level, the events of 2022 had a significant and direct impact on individual consumers' financial situations. The war between Russia and Ukraine led to soaring energy prices, resulting in a comprehensive increase in costs for many consumers. For example, in some countries, household energy costs like electricity and gas doubled.

While inflation doesn't seem to be a major issue in Japan, Europe has consistently grappled with it. Take the UK, Europe's second-largest market and dentsu EMEA's largest market: it continues to record high inflation rates, with March's rate at 10.1% (Editor's note: May was 8.7%). The impact of inflation, coupled with macroeconomic uncertainty and political factors, is fueling further consumer anxiety and squeezing personal spending.

Within this industry, consumer media consumption patterns also vary by country and region. For instance, in Northern Europe, the majority of advertising spend is directed toward digital. However, in countries like Spain, Italy, and France, half of advertising investment is allocated to offline channels, with television as the primary medium.

Trends Shift Toward DX and Generative AI

――Are there any notable marketing trends in the EMEA region?

Uncertain times create the greatest opportunities for expression and creativity, accelerating digital transformation. There has never been a more exciting time to support clients' new challenges in our industry.

Like much of the world, we are watching generative AI and chatbots as one of the most exciting technologies poised to significantly impact consumers, clients, and the entire industry. Chatbots equipped with AI, machine learning, and natural language processing (technologies and software enabling computers to process human language) can respond to user queries almost like a human.

Furthermore, brands are increasingly prioritizing conversational commerce, which offers benefits like automation-driven personalization, 24/7 availability, convenience, speed, and scalability. By delivering shopping experiences tailored to each individual consumer, brands enhance customer engagement and loyalty, ultimately driving increased sales.

In the near future, the convergence of AI chatbots and conversational commerce may significantly alter how consumers conduct research, ultimately impacting the entire consumer purchase journey.

――How do you view clients adapting to these trends?

It varies by industry. For example, telecommunications and fast-moving consumer goods (FMCG) are entirely different. Businesses where purchases can be conveniently made online are rapidly embracing e-commerce and accelerating the adoption of new technologies, including AI.

A common trend across all clients is the pursuit of extracting the best insights from data to deliver highly personalized communication across both media and creative. I believe dentsu EMEA's role is to support clients in adopting these new trends, staying ahead of competitors, and seizing new business opportunities to gain a competitive edge.

――What is crucial in responding to these trends and client dynamics?

We have built strong relationships with clients across the EMEA region. Given that EMEA comprises over 40 markets, a great deal happens daily at the local level. Our role is to serve as trusted partners, facilitating knowledge of new technologies and their safe implementation as companies and brands navigate future methods of communication and interaction with consumers. We are fully committed to placing client centricity at the core of all our actions and decisions. Our job is to provide our clients with our knowledge, ideas, and solutions, supporting them in capitalizing on new opportunities through these trends.

――What do you see as the high-potential businesses for dentsu EMEA in this region?

We operate in three key areas: Media, Creative, and CXM (Customer Experience Management). Among these, our CXM business is experiencing significant growth. Last year, CXM achieved double-digit growth at dentsu EMEA, and this momentum continues to strengthen this year. This is a critical area for us, where we maintain both organic investment and strategic investments through M&A. For example, we recently acquired the Spanish agency Omega, making our CXM business one of Spain's largest CRM agencies.

We must also mention our core media business at dentsu EMEA. While media is a market with lower growth rates compared to CXM, dentsu EMEA leads the region in new client wins within this market, securing the top position in the EMEA New Business League in 2022.

Finally, dentsu EMEA's creative business achieved organic growth (growth driven by internal resources) at twice the market rate in 2022, demonstrating the strength of Dentsu Inc.'s creative capabilities and services in this region.

Potential of East to West Clients

――What is your impression of Japanese brands and marketing in the EMEA region?

We work with many Japanese companies across the entire EMEA region. What makes Japanese brands and marketing compelling is their high level of innovation and creativity, fused with technology. And precisely because dentsu is Japanese-born and headquartered in Japan, we can support Japanese clients in effectively engaging with the EMEA market.

Therefore, we aim to further deepen and develop the relationship between Japanese clients and dentsu EMEA in this region. Regarding the relationship with Japanese clients, which we call "East to West Clients," we've made an excellent start. We hope to build on this foundation and accelerate further.

As a side note, I'm a huge fan of Japanese brands. For example, I'm Italian, but I have a Japanese classic car in my garage at home. The color is, of course, my favorite "red" – that's the Italian in me (laughs). It's a truly beautiful car. You can see remarkable innovation, distinctive creativity, and cutting-edge technology in that car.

――Finally, what is the best way for Japanese marketing to evolve in the EMEA region?

Just as we learn from and are inspired by Japan's tradition of innovation and creativity, I believe our advanced and diverse media perspective, along with our deep expertise in data and technology within EMEA, can greatly benefit Japan.

By merging the capabilities of dentsu East and West, we can further enrich our services and provide better support in an era where clients and consumers require broad capabilities and experience.