McCann, Carat grow in Japan with new strategic alliances

McCann-Erickson Japan has established a joint venture company with MIK Planning. The new company, called Momentum MIK, continues to focus on sales promotion, event development and implementation. Momentum MIK is 75 per cent owned by McCann and 25 per cent by MIK Planning, with projected annual billings of five billion yen (US$48 million). McCann VP Hiroshi Namiki has been named the president of Momentum MIK, and members of the board of directors were elected from both companies. McCann's sales promotion specialist Momentum Communications Development Center was spun off to form the new venture company. "In a mature consumer market, where the competition among corporations and product categories is becoming more severe, and due to the emergence of totally new technologies, the market paradigm is changing fast," said Mr Namiki. "We must become more specialised and sophisticated in order to respond to the demanding needs of our clients and provide them with effective solutions." Meanwhile, Carat has acquired a majority stake in Tokyo-based Strategic Planners International (SPI), an independent media planning company founded by former Bates executive Kim Walker. The new company will be renamed Carat SPI KK. "We aim to marry our unique, Japanese experience, with the immense international resources of Carat to deliver global best practices to our clients," said Mr Walker, president of Carat SPI. Some of Carat SPI's major clients include: Adidas, Club Med, Disney, Fujitsu, Nippon Lever, Warner Lambert and Volkswagen. Established in 1995, the agency has made profits of about Y150 million (US$1.4 million) in the media business. "Even with this deal, we remain the only true media independent, as we have no connection to a creative agency, so 100 per cent of our focus is on delivering business advantage through the efficient and effective use of media," said Mr Walker. "We will not undermine the unique positioning of Carat SPI, but on the other hand, we will be seeking ways to expand our presence in the market through cooperation with major Japanese agencies or other innovative means," said Mr Douglas Flynn, CEO of Aegis Plc, Carat's holding company. "We think a number of recent investments by foreign advertising companies in Japan have been rash, politically awkward and unprofitable. "As the second largest advertising market in the world, we have to treat this issue (business expansion) very seriously, but we will not rush into it."

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