No. 1--for a While

Like Gulliver among the Lilliputians, Dentsu Advertising Ltd. has long dominated the business of mass selling in Japan, and its roster of clients gleams with famous names: Toyota, Pepsi-Cola, Nestle, Max Factor. The agency operates in one of the world's ripest ad markets: the Japanese watch more television than any other people, and are even more brand-conscious than Americans. Helped by a booming economy and a rising currency in recent years, Dentsu has grown particularly fast. In 1972 it elbowed McCann-Erickson out of second place in global billings, and now it has become the new top banana of world wide advertising. Billings last year reached $950 million v. something more than $800 million for the American-based giant J. Walter Thompson Co., which has been in the No. 1 position ever since such records have been kept.

Repeating that performance this year may be tough because the energy emergency is clobbering Japan's economy and currency. Last week the government ordered businessmen and consumers to reduce oil and electricity use by 15% from last year's limits. Already newspapers and magazines are dropping pages, and broadcasting hours are beng cut after midnight. The crunch will be a major test for Yoshichika Nakahata, 63, who, after 39 years with almost every department from television accounts to art and copy, was named Dentsu's president in November. Noted more for administrative skill than for creative flair, Nakahata vows to lead the company with "the energy of a roaring tiger."

Dreamy Clout. At Dentsu, that could be more than mere hyperbole. The diligence of the 5,000-person work force is legendary, and the lights of the agency's 15-story glass-and-concrete head quarters near Tokyo's Ginza regularly glow late into the night. Competing admen joke that "the first people on the streets each morning are the ragpickers -- and Dentsu men hurrying to work." In seeking new business, the firm's account executives are the most aggressive in Japan; they often refer to calls on prospective clients as attacks. Each summer a group of Dentsu workers climbs en masse to the top of Mount Fuji. No sooner do the panting executives reach the summit than they crowd into the mountaintop post office to send greeting cards to clients.

Dentsu gets only 3% of its business outside Japan, but it wields the kind of clout over its home market that American admen can only dream about. The agency places about a quarter of all the print ads in Japan and four out of every five rich prime-time TV commercials. Of its 5,000 or so competitors, the closest rival is the Hakuhodo agency, which has billings of less than $3,000,000. One reason for Dentsu's preeminence: because of its money, drive and just plain bigness, it can buy up prime print space and broadcast time months in advance, leaving only crumbs for its competitors.

Founded in 1902 as a news service, Dentsu did not shift into advertising in earnest until the mid-1930s. The caliber of that era's ads is summed up in a Dentsu candy promotion, which showed the silhouette of a Japanese bomber over China under the headline: EVEN OUR WILD EAGLES TAKE ALONG MORINAGA CARAMEL ON BOMBING RUNS.

After the war, Dentsu got a running lead on its rivals by quickly adopting proven U.S. ad techniques, including the account-executive system and market analysis. Even today, when visiting U.S. agencies, its representatives come equipped with tape recorders and cameras to sop up every bit of information. Many Dentsu promotions bear Madison Avenue's imprint, using such celebrities as David Niven to promote men's cosmetics, Arnold Palmer to sell golf togs and the Osmond Brothers to push soft drinks.

The client-agency relationship in Japan is generally far more enduring than in the U.S., and there is not much shifting of accounts. Competing companies often use the same agency to create their ads, an impossible conflict of interest for U.S. corporations, which demand unswerving devotion from their ad firms. Dentsu, for example, creates ads for three major appliance companies (Matsushita, Toshiba and Hitachi) by farming the accounts out to different offices, which compete against each other. The arrangement works.

Even so, some American admen believe that Dentsu's methods would falter in the more competitive markets of the U.S. and Europe. That contention may soon be tested. Having gained almost as much control as they can in their home market, Dentsu officials are seriously considering more actively expanding their business overseas.

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