People and AI Elevating Each Other Dentsu Group Japan's Unique AI Strategy: "AI For Growth"

※This article is based on content originally published in the November 22, 2024, "Nikkei Business Digital Edition SPECIAL," with some editing.

From left: Susumu Namikawa, Center Director / Executive Creative Director / Chief AI Master, CX Creative Center, Dentsu Inc.; Takuya Kodama, Head of AI MIRAI / AI Business Planner / Chief AI Master, Dentsu Group

*Data, situations, and affiliations/positions of individuals cited are as of the time of writing this article.

Solutions leveraging AI are being released one after another, advancing its use in various business scenarios. dentsu Japan, comprising approximately 150 companies within the domestic Dentsu Group, has been engaged in AI-powered client support from an early stage. In August 2024, it announced its new vision "AI For Growth," representing its unique AI strategy. How does dentsu Japan aim to contribute to client companies' growth through AI? Nikkei BP Research Institute's Toshiyuki Sugiyama interviewed two key figures driving dentsu Japan's AI strategy about the current state of AI adoption and the direction they are pursuing.

(Interviewer: Toshiyuki Sugiyama, Nikkei BP Research Institute)

 

Corporate AI-related investment is
essential for survival

Approximately two years after ChatGPT's debut, the adoption of generative AI based on large language models (LLMs) is gaining momentum. Having weathered three global AI booms, generative AI is now permeating the business world. However, some companies hesitate to fully embrace it, citing unclear benefits after initial implementation.

In response, Takuya Kodama, who oversees AI utilization at the Dentsu Group, points out, "The world of AI sees new technologies emerging almost daily. We cannot afford to stand still here."

Dentsu Group AI MIRAI Director / AI Business Planner / Chief AI Master Takuya Kodama

"I tell client companies that AI-related investment is 'Essential for Survival'. It's an investment necessary for a company's continued existence, and I believe it's on the same level as a business continuity plan (BCP). Even if the return on investment (ROI) for AI investment is currently below 1x, there is no option to stop doing it. Because while you hesitate, companies actively engaging with AI will take over the market." (Kodama)

Susumu Namikawa, who leads AI adoption at Dentsu Inc., notes: "I foresee a significant gap emerging over the next three years between companies that consciously engage with AI and those that don't. It's crucial not to stop at adoption, but to actively utilize AI and unlock its full potential."

Susumu Namikawa, Center Director / Executive Creative Director / Chief AI Master, Dentsu Inc. CX Creative Center

The decision to implement generative AI company-wide likely rests with management. However, it may be the individual employees who drive its adoption. When employees utilize generative AI in their daily tasks, experience its convenience firsthand, and feel the efficiency gains, their attitude toward the initiative gradually shifts. This momentum then propels management to move swiftly toward full implementation, driving significant transformation within the company.

"As technology advances and AI becomes capable of autonomously handling certain business tasks, the key will be how we divide responsibilities between humans and machines. It's true that AI is increasingly moving towards enhancing individuals, as seen in AI integrated into office applications. This is precisely why it's crucial for each person to proactively master AI and leverage it for their own growth," says Mr. Kodama.

Mr. Namikawa also sees AI delivering value from the perspective of creating new added value. "We're already seeing real-world examples where leveraging AI has deepened customer understanding. Based on this understanding, companies can enhance the value they provide to customers, which ultimately leads to increased customer sales. By accumulating as many of these success stories as possible, companies should come to realize that AI implementation can translate into significant business opportunities."

Two projects
dentsu Japan's AI Foundation

dentsu Japan has been working on AI utilization since around 2016. In 2017, it launched the "Advanced Creative Center" within Dentsu Digital Inc., aiming to fuse creativity with AI. The following year, 2018, saw the launch of the "AI MIRAI" project to promote AI utilization across all of dentsu Japan. Mr. Namikawa led the former, while Mr. Kodama led the latter.

"At Dentsu Japan, many talented individuals have been involved in AI-related projects. The AI banner ad generation system 'AICO' developed by the Advanced Creative Center is one example. AI MIRAI was born as an overarching team consolidating these activities and gathering talent from across the group companies," said Mr. Kodama.

However, "AI MIRAI" had a distinctly grassroots feel and maintained a certain distance even from dentsu Japan's management. Amid rapidly growing interest in generative AI, discussions arose about the need to clearly articulate dentsu Japan's overall AI vision both internally and externally. This led to the August 2024 announcement of "AI For Growth," the company's unique AI vision. This new vision emerged precisely because of the existence of these two projects.

Humans and AI collaborate
Achieving Synergy at a Higher Level

"AI For Growth" aims to "contribute to the growth of client companies and society by combining 'human intelligence' with 'AI intelligence.'" At its core is the stance of not merely using AI as a tool for automation or efficiency, but rather inputting human thought processes, know-how, and various data into AI, creating a cycle where humans learn from the evolved AI. This fosters a situation where humans and AI mutually elevate each other.

To achieve this, it is necessary to nurture AI technology using the collective intelligence of all employees working at dentsu Japan. Therefore, "AI For Growth" has established focus points both externally and internally. Specifically, it is structured across three layers and eight domains.

dentsu Japan's AI vision "AI For Growth" consists of three layers and eight domains. It comprehensively covers everything necessary for AI utilization.

 Please refer to the diagram above. The outer layer is "Client Services," serving as the interface with client companies. Here, we promote the optimal use of AI to support client companies in marketing, transformation, and product development.

The middle layer is "AI Assets." It aims to enhance services for client companies through expanding data infrastructure, developing AI talent, and conducting technological research and development. Mr. Kodama stated, "This part is precisely what leads to dentsu Japan's competitive advantage," and explained as follows:

"The most tangible effect of combining human knowledge with AI intelligence is seen in the data infrastructure layer. By formalizing not only diverse marketing data but also the tacit knowledge—such as the 'thinking patterns' of creative members—AI becomes significantly stronger and smarter. We are also collaborating with the University of Tokyo's Next Generation Intelligence Science Research Center to establish unique methods specific to dentsu Japan. We are confident these are elements that cannot be replicated by other companies." (Kodama)

The innermost layer is "Corporate Functions," centered on establishing AI governance, organizational structure, and management. We are updating systems and rules based on ethics suited to the AI era, strengthening the organization to enable higher creativity and productivity.

As assets built over nearly a decade since the "AI MIRAI" era, dentsu Japan already possesses a diverse suite of AI solutions. These are primarily utilized for "Organizational/Business Transformation" and "Marketing Transformation." Among these solutions are those where "human knowledge enhances AI" and those where "AI knowledge enhances humans."

Leveraging the accumulated expertise of dentsu Japan's creators and planners, people and AI mutually enhance each other

An example of solutions where human knowledge enhances AI is "AICO2," announced in August 2024. This is an improved version of AICO, first introduced in 2017, which trains AI on the thinking processes cultivated by copywriters over many years to automatically generate copy. Mr. Namikawa explains, "We input the artisanal data of our copywriters to 'raise' the AI. As a result, the AI can now produce copy that makes you gasp. We call this AI, trained through such learning, a 'Creative Thinking Model.'" This tool could only be developed by dentsu Japan, which possesses extensive professional know-how to teach the AI.

Conversely, AIQQQ STUDIO, released in February 2024, positions AI knowledge as an enhancer for humans. It combines vast hypotheses generated by proprietary AI with creators' rich insights to support new business and communication design development in terms of volume, quality, and speed.

"For a new product planning project with a manufacturer, even though we only fed it a rough product direction, the AI proposed 400 ideas. It lacks the human-like preconceptions about how products in this field 'should be,' so it doesn't unconsciously narrow the scope of thinking. That innocence is stimulating. However, AI can only create a starting point. The direction of narrowing down with intent and the refinement process are handled by humans. We strive to create sessions where humans and AI collaborate, adding the missing perspectives." (Mr. Namikawa)

We have already deployed diverse AI solutions in the fields of "Organizational/Business Transformation" and "Marketing Transformation."

 

We have strengths in processes that incorporate intuition and right-brain sensibilities.

Listening to Mr. Kodama and Mr. Namikawa, "AI For Growth" seems to suggest that while it provides added value to customers through AI-human collaboration, the starting point is still people. When asked, Mr. Kodama responded:

"When considering new ventures, starting with market size analysis isn't wrong. But I believe Dentsu Inc.'s approach—combining that logical foundation with insights honed from understanding consumers, then leveraging AI to generate numerous ideas—is distinctive. Simultaneously, we explore the feasibility of those ideas. We take pride in our strength in processes that incorporate human sensibility and right-brain intuition."

What about Mr. Namikawa? "I believe services like AICO2 and AIQQQ STUDIO cannot be provided solely through strong technical capabilities. The crucial point is the high-level synergy between humans and AI. The know-how data forming the basis of our creative thinking model isn't limited to copywriting; it's extensively accumulated within dentsu Japan. AI learns from this unique knowledge we possess and becomes even smarter. We will continue product development and research fundamentally based on this mutual interaction and growth between humans and AI."

What mindset is needed for business transformation leveraging generative AI? According to Mr. Kodama, "I believe we need ideas that can completely transform existing industries from scratch using AI. We should see more bold reengineering in the future." Mr. Namikawa stated, "One approach could be focusing on highly feasible technologies and backcasting from science fiction-like visions. The world depicted in science fiction is already becoming achievable."

First, "AI For Growth" began as the vision for dentsu Japan. Given the group's operations across approximately 120 countries and regions, the plan is to expand through globalization. Collaboration with major overseas IT companies has already begun, positioning the group to leverage economies of scale and expand AI capabilities. What path will dentsu Japan forge by combining this with the creativity traditional consulting firms lack? Expectations are high for the vision of "humans and AI elevating each other."

Post-Interview Notes (Toshiyuki Sugiyama, Nikkei BP Research Institute)
It's often said that leveraging AI in business yields greater results when combined with another core strength. Companies strong in manufacturing can use AI to dramatically boost efficiency while maintaining high quality. Companies strong in sales can use AI to introduce products that truly surprise customers. Listening to Mr. Kodama and Mr. Namikawa, it becomes clear that for the Dentsu Group, that strength is its people. Few would deny the potential of the company's employees, especially in creative fields. "AI For Growth" may well be built upon that underlying strength.