AOI Pro and TYO, which have provided TV commercial production services in Japan since 1963 and 1982, respectively, are to operate a joint holding company, AOI TYO Holdings, from January 2017.
Why the sudden decision to come together? A spokesperson from AOI Pro, commenting on behalf of the new entity, noted via email that Japanese advertisers’ continuing shift to online means significant growth in the companies’ mainstay TV advertising production business will be difficult to achieve. The spokesperson also pointed to opportunities in new areas such as virtual reality (VR) and augmented reality (AR). Sharing resources will help mitigate threats and capitalise on those growth areas, she suggested.
But both companies recognise that major growth will only come through international expansion. Both already have some presence in Asia: AOI Pro is established in China, Thailand and Indonesia, while TYO operates in Indonesia under a joint-venture and holds a stake in a Thai creative agency. Both aim to attract more local business in addition to that from Japanese companies looking for overseas services.
“We embarked on this merger in order to provide superior services not only in Japan but also in Asia, with the goal to be the number one provider of visual advertising-related services in that territory,” said the spokesperson. “Subsequent to the merger, AOI Pro plans to expand their client base from Japanese-affiliated companies to local businesses in the region.”
The bulk of AOI Pro’s international growth currently comes from Beijing, where it acquired a local production company, Beijing Kuiyou Advertising, in 2016. It also has an affiliation with Kuiyou in Shanghai.
Looking ahead, AOI Pro expects to have more direct transactions with clients, something that TYO already has experience in. In a statement announcing the merger, the company lists video content marketing as a priority area for development. A vehicle for this is subsidiary company Quark Tokyo, formerly Nakamino, which AOI Pro acquired in December 2015. Quark offers video-related services ranging from strategy to design, production, data analysis and media reach.
“With business being direct with the advertiser, the need to penetrate a new customer base will arise,” the spokesperson explained. “The synergy with TYO, which has strong direct ties with advertisers, [will] be of great significance.”
Unexpectedly, TYO also recently launched a public-relations business, according to the statement, “which is expected to create synergies with the conventional video advertising business”.
The spokesperson explained that by offering a “one-stop package for the entire realm of communications including advertising and PR” and bringing PR operations in-house rather than outsourcing them, AOI TYO Holdings will be able to take on larger projects across client departments and maximise profits.
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AOI Pro writes its name with a full stop, "AOI Pro." but we have omitted the mark for grammatical clarity.