Foreign agencies spy new media opportunities in Japan

<p>When Dentsu sneezes, the common perception is that the Japanese economy is about to catch a cold. With that in mind, the Japanese juggernaut’s first half financial results for 2007 will be read with interest.<br /><br /> In spite of the continued growth of the country’s economy, Dentsu’s financial results for this year’s first-half stand in contrast to the upbeat figures from the same period in 2006. The agency recorded a year-on-year consolidated billings decrease of 3.6 per cent. <br /><br />Importantly, although a slight increase in advertising expenditure is forecast for the coming year, it is down on last year and growth of the four traditional media is again expected to be minimal. <br /><br />In a market where media buying is largely controlled by three agencies, the bulk of whose revenue comes from procuring TV and print for clients, this trend could be a significant turning point. “The four traditional media remain an important and effective vehicle in many contexts,” says Sam Cassels, CEO of Publicis Japan. “But their cost and relevance is now questioned more thoroughly by marketers, given the proliferation of new media vehicles and a more detailed understanding of people’s evolving media habits.”<br /><br />Naked Communications’ Jonny Shaw notes that although Japan has been slow to grasp digital marketing, its rise over the past two years means that marketers must now seize the new opportunities that are open to them. “Big agencies are hyper-aware of the need to change their game,” he says. <br /><br />Certainly agencies like Dentsu are increasing investment in the internet. “We are fully committed to digital and overseas growth,” says Dentsu senior manager Yukihiro Oguchi. But the amount allocated to online remains minimal compared to that spent on mass media. <br /><br />“The key word is collaboration,” says Shaw. “The stereotype of dinosaurs protecting traditional media is misleading. Systems are evolving to accommodate a new reality. The idea of being in control is becoming outdated. The successful companies will be those that are open to cross-pollination of people and work.”<br />It is not just online advertising that is threatening traditional media strongholds. <br /></p><p>PR is also becoming more relevant in the Japanese market as consumers spend ever more time online. With 10 million regular bloggers, Japan is the blog kingdom of the world. “The media environment has dramatically changed,” says Tetsuya Honda of Blue Current. “Consumers are becoming smarter. Word-of-mouth is more effective than mass advertising. Japan’s high media buying costs mean that PR has a higher rate of ROI.” <br /><br />In view of this shift, Dentsu is currently making an effort to recruit people with a PR background, he adds.<br /><br />Ultimately, it appears that foreign and independent media agencies, which have struggled long and hard to establish a foothold in Japan, may now have an opportunity to compete more effectively. “The emergence of new media and the rate of growth does provide fresh opportunity and I suspect that we are not the only people exploiting it,” says Eaton.<br /></p>