Full circle

Beyond the broader economic malaise, Madison and Wall’s Brian Wieser, known for his analysis of the major holding companies’ financial results and investors calls, said it’s difficult to isolate “the performance of Merkle with much precision” – i.e. we can’t drill down into how the local CX unit tracks with other markets. 

More broadly though, he said Dentsu’s challenges aren’t unique to this territory, with the company struggling to find its footing amidst a structural shift to a single Japanese-led global organisation. 

“It’s having an impact everywhere, presumably as a consequence of managerial changes which then leads to other executives experiencing uncertainty around their roles and clients noticing all of this change,” Wieser told Mi3. 

Others have speculated that Merkle’s maybe changing tack and rethinking a shift towards a systems integrator approach fuelled by acquisitions of three major Salesforce shops by the end of 2022 – Amicus Digital, Davanti and Aware Service.

While Merkle ANZ continued to deliver its services across design, data, AI, e-commerce and tech, parts of the market increasingly saw the agency as a pure-play systems integrator, a move that risked it being pigeon-holed between major global consultancies, and local, lower cost providers.

Against that background, and with clients pulling back from large-scale tech transformation, the cuts may signal the agency’s plans to refocus squarely on its heritage.

“It’s never nice to have to make these decisions, but we must be positioned to deliver what clients are looking for today and into the future,” said Douglas. “Our focus remains unchanged, ensuring we continue to build a strong and fierce reputation as an experience-led transformation business across ANZ for our clients, partners and our people.”

It’s understood the agency will be focused on better leveraging the globally acquired and integrated capabilities of Tag and Extentia. Meanwhile, the agency’s B2B unit – Merkle B2B – is unaffected by the cuts. It is transitioning to a group-wide proposition as Dentsu B2B.