Joining earlier this month as president and representative director, Kondo replaced Masahiro Kano, the former chief executive, who moved to data management platform Krux Digital as country manager for Japan last October. Kondo was previously head of agency at Google Japan and before that GM of Yahoo Japan.
Kondo said his decision to move to TubeMogul, which operates a software platform for digital video advertising incorporating RTB technology, was spurred by what he sees as major growth potential for online video in Japan.
According to Salop, the market was worth around US$40 million when TubeMogul opened its Japan office, but that figure has since increased ten-fold. Research from Cyber Agent and Seed Planning dated October 2014 puts the current value of the Japanese video advertising market at close to $418 million, set to increase to more than $733 million by 2017, with mobile video ads overtaking desktop ads to account for 52 per cent of the pie.
“It’s really starting to take off,” Salop said. “Being here early, we’ve had an opportunity to educate agencies and advertisers and I think we’re really starting to benefit from this growth.”
TubeMogul operates somewhat differently in Japan than in markets such as the US in that agencies, rather than advertisers, make up its client base. They include major domestic agencies and digitally focused companies such as GMO Tech and Rakuten’s LinkShare. Salop said this approach would continue, but that there was lots of scope to educate marketers about the benefits of online video advertising by addressing them jointly with agencies.
Beyond direct response
Kondo said the traditional perception of video advertising in Japan was as a direct-response tool, but that demand was shifting towards branding. He said marketers’ understanding of the platform was still in the early stages given the continued prevalence of TV advertising, but that they wanted to learn how to combine TV and video advertising effectively. Video advertising could be particularly effective—and more cost-effective than TV—for advertising secondary or niche products to a more targeted audience, he said.
Salop said that TubeMogul was expanding its services across devices and had recently launched its first programmatic TV solution in the US. While Japan is still not at that stage, she said it was important to consider how to localise for the market—and for international markets in general. The key is simplification and customised solutions, she and Kondo said.
Kondo claimed that many marketers were unable to use all of Google’s functions effectively due to a lack of understanding, but at the same time Google was limited in its ability to offer customised services to help. Operating as an entertprise software company allowed more flexibility, he said.
“[In order to offer] efficiency for businesses, big IT companies want to give one simple solution across many countries,” Kondo said. “Our business stance is that we want to provide the answer to local business demands.
“Almost all marketers [in Japan] cannot understand programmatic,” he added. “We have to have a step-by-step approach. Almost all think programmatic is just direct response. But actually direct response is just one function. TubeMogul wants to provide branding as programmatic.”
The year of programmatic?
Salop pointed out that the Japanese market as a whole was very brand marketing-focused and that digital agencies were expanding their business into this area due to client demand. And while not fully understanding it, “clients are saying this is the year programmatic is starting to take off in Japan,” she said.
Education is an obvious way to spur adoption, and TubeMogul aims to launch a certification programme in Japan this year, as it has done in other countries such as the US. Measurement is also an important factor to take into account. “We have to develop a measurement method across all devices, and offer clear case studies,” Kondo said.
TubeMogul’s global alignment with ComScore for digital metrics applies in Japan, but it will be necessary to work with other business partners too, such as Video Research (which provides TV metrics), to ensure advertisers understand how to get the best out of a combination of TV and video advertising. Online GRPs and viewability standards are “not well-developed” in Japan, he said. TubeMogul is working with industry bodies such as the Japan Interactive Advertising Association (JIAA) to develop more satisfactory measurement means.
A further way TubeMogul is working to develop its presence in Japan and the video advertising sector as a whole is by growing inventory. The company is currently working with Rakuten’s Showtime, Sony’s Mora online music and video store, and recipe-sharing site Cookpad, to create new inventory for video advertising.
“We are focused on growing our inventory especially on the premium side,” Salop said. “You have pre-roll on traditional video sites but there are new ways, so we are very proactive about working with publishers.”
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