MindShare Japan to target digital media, local clients for growth

At the end of 2000, its first full year in business, MindShare

Japan had media budgets totalling Y53 billion under management,

according to CEO Mark Patterson.

MindShare plans but does not yet buy media in Japan, and so "funds under

management" is one measure of the scale of the business. The figure is

similar to the media billings of tenth-ranked Asahi Advertising measured

the traditional way.

"We've created the brand, we've built up a good client base. I see my

job now as taking MindShare Japan through to its next phase; continuing

to develop both the product and the people and to push for new business

aggressively," said Mr Patterson.

Current MindShare clients are mainly Western multinationals, aligned

with either JWT or O&M. These include IBM, Nippon Lever, Northwest

Airlines, Haagen Dazs, de Beers and Nestle. It is a blue ribbon list,

but Western MNCs only account for around five per cent of all media

spending in Japan.

For MindShare, as for other Western agencies, the key to growth is

winning major assignments from Japanese advertisers. Only McCann

Erickson has achieved this, with 50 Japanese corporations from their 80

clients providing about 40 per cent of billings and ensuring the

agency's consistent top 10 ranking.

MindShare's strategy for building business relies partly on new

technologies that will improve the quality of service, adding value that

prospects should find attractive.

This year, MindShare will invest in 3D (see story this page).

To augment 3D, MindShare plans research to aid planning for B2B clients,

such as IBM. There will also be developments from MindShare's Advanced

Technology Group (ATG), a specialist in fee-based market modelling,

whose clients include Nippon Lever. M.Digital, MindShare's digital arm,

is also winning business with new assignments from IBM and Zurich

Insurance.

"We hope to grow digital (in 2001). It could be easier to win Japanese

clients for digital than for traditional media," said Mr Patterson.

About 25 per cent of MindShare's staff is with M.Digital, which only

contributes four per cent of revenue, an imbalance Mr Patterson hopes

market opportunities will correct. The start of Digital Television in

Japan should also bring syndication opportunities for a new unit Mr

Patterson has initiated.

Asatsu-DK, WPP's Japanese partner, plays a key role in MindShare's

plans.

Its links with major domestic advertisers could introduce MindShare's

enhanced media services to Japanese clients.

The time, it seems, is ripe for media agencies operating in Japan.

Research by Nikkei Advertising Research Institute, shows that

advertisers reckon the top priorities for agencies are: effective media

planning (82.5 per cent) and sales-boosting initiatives (64.9 per

cent).

"This plays to modern media planning techniques which media specialists

are best equipped to handle," said Mr Kim Walker, president of

Carat-SPI.

But things will not change overnight. True strategic media planning is

rare in Japan, so global best practices will be useless without a

willing client culture and planners trained in these new skills, added

Mr Walker.

While many Japanese agencies lag, the leaders, Dentsu and Hakuhodo are

both investing large sums in proprietary research and planning

technologies, as is McCann, said Mr Ron Pullen, EVP at

McCann-Erickson.

"Multinational media agencies have always had an opportunity to do

business in Japan provided they were prepared to make the necessary

investments in the market," said Mr Pullen.

MindShare is paying the admission fees to that select club and hopes to

have Y73 billion under management as a result a year from now.