OPINION: Five big mistakes companies make with digital strategy in Japan

It is the year 2012. Digital is now traditional. Online music sales now outstrip retail CD sales. Digital marketing spend outstrips newspapers. Japan’s mobile carriers will soon all launch 4G services. The once dominant Mixi (Japan’s local SNS service, which at its height claimed approximately 30 million members) is in steady decline, while Facebook and Twitter have become the largest social networks in a once blog-dominant market. The world is moving forward. Yet has marketing moved with the times?
 
For some brands, yes. For others, and perhaps the majority, it’s a big 'no'.
 
Traditionally, foreign companies have competed on an uneven playing field in Japan due to the heavy dependence on bricks-and-mortar retail and rigid distribution systems. Digital provides them an opportunity to compete like never before, yet foreign companies make some fundamental errors with their digital strategies in this market. Avoiding these errors could, in some cases, tip the scales back in their favour.
 
What is holding up the ability for brands to change and maximise the opportunities available to them? Here are five of the biggest mistakes that companies are making with their digital strategies, keeping them behind—not ahead of—the times that we, the consumers, live in.
 
1. Procured digital

The commoditisation of digital is becoming a frequent topic, and while this might be fair in regards to the development of standard display ads and the ongoing redesigns of corporate brochure-like websites, this is also becoming true in the creation of true strategically driven and business-changing digital ideas.
 
As digital continues its growth in our consumers lives, as the time spent across digital's complex media grows, as technology enables brands to engage more deeply with their consumers and as e-commerce closes the gap against traditional retail, the brands that embrace this are winning. And those who don't will continue to flatline.
 
Japan’s conservative media landscape has restricted brands and agencies in the past from developing strong creative. Yet with the increasing dominance of Facebook and Twitter, and with the opening up of major portals (Yahoo! Japan for the first time will soon allow third-party adserving), the industry requires a shift from an ROI-driven media plan to a re-emphasis on the power of the idea.
 
If the focus starts on the cost of everything and the value of nothing, then the results will more often than not be a cost-effective campaign that does little for the brand or the consumer and ultimately limits sales.
 
2. One-night stands

For years now the strength of digital has been the ability to have ongoing conversations and engagement with consumers. With the growth of earned media, especially social-media platforms, this has reinforced the need to look at how "traditional" campaigns are structured and the budgets that support them.
 
Too often Japan marketing spend in digital is aligned with the peaks and troughs of ATL spend, creating one-night-stand engagements with the hope that this will keep consumers interested until the next campaign goes live six months later.
 
Too much focus has been placed on "integrated activity" rather than on "ongoing activity".
 
3. All about comms

Digital spend on comms (i.e. what I define as traditional campaign promotions "pushing" awareness) significantly outweighs other forms of digital marketing. Yet the brands in Japan that are winning are those that are investing in using digital to provide products and services, creating ecosystems for users to engage in or even solve B2B challenges.
 
The biggest challenge for many foreign companies when competing with their sizeable Japanese competitors is the size of their sales force. The opportunities for digital as a communication platform to bridge the gap and increase their share of voice with retailers, healthcare practitioners or even rural local drug stores is immense and requires a paradigm change in regards to how the brand communicates.
 
"Digital" needs to be seen more as a technology that enables engagement, providing the end users with a solution or a value add.
 
To replicate the same approach as say, TV, in digital, is surely like buying an iPhone just to make phone calls.
 
4. Risk-free innovation

The industry we live in is moving faster than ever. The rise and fall of social-media platforms such as Mixi in Japan, the success and failure of mobile apps, as well as the speed at which information now travels, means our approach to marketing needs two key elements: flexibility and innovation.
 
Marc Mathieu, senior vice-president of marketing for Unilever, demanded "more magic, less logic" and the desire to create a culture where taking risks was accepted. Yet how many clients, marketing directors or brand managers, and how many agencies, are willing to take this on board due to the fear and consequences of failure?
 
Digital's ability to track the user journey (albeit many of these measurements being soft and distracting) does not mean that the consumer's engagement is a 1+1 = 2 affair. Innovation is not a mathematical equation and will never be risk free, yet how many brands allocate budget, even a controlled and small percentage of budget, to enable them to truly innovate outside of what they have being doing for decades?
 
Those who don't take risks will get the same results. Those who do will have a far greater chance of success.
 
5. If only companies knew what companies knew
 
Technology pioneer Mitchell Kapor said, "Taking information off the internet is like taking a drink from a fire hydrant."  The amount of data available from multiple digital analytics tools is mind-boggling.
 
Take a company in Japan with a portfolio of brands, across multiple brand teams, across multiple agencies and across multiple campaigns in any given year, and you can start to envisage a PowerPoint presentation of encyclopaedic depth. The challenge is putting all this together in a format that provides insights that enable marketing teams to make strategic decisions about a brand, or even a portfolio of brands.
 
Too often data is treated in silos and measured against specific and short-term campaign performances. Rarely os it consolidated to form a bigger picture. This leads to a very granular approach to understanding the data and gives rise to optimisation based on what brands would do if they did the same thing again.
 
Yet this data is far more powerful and must be used to shape and support the overall strategy rather than just specific execution rationales.
 
The sad reality is that this column could have been written five years ago, and it would still be relevant today. The tipping point will come. For some brands, such as Nike and Japan’s Uniqlo, it is at the core of everything they do. For the others it will only come when their brands embrace digital as quickly as their customers already have.