In spite of sizeable shifts in recent years, most acknowledge that the Japanese market still trails peer markets in its use of data to inform marketing activities. Advertising and marketing activities remain largely focused on traditional media and relationships, and the process has been less than transparent.
“Data is hard to come by in Japan,” says Jason Jutla, programmatic lead, APAC, for global digital agency Essence. “First-party data and retargeting are heavily used, as they should be. Second-party data is less mature and limited to simple vertical alignment. Third-party data is almost non-existent.”
However, marketers are increasingly aware of the potential of using data to make their investments go further, leading them to demand more from agencies that have traditionally sold them TV inventory but offered little in the way of analytical services. International clients operating in Japan are demanding the same accountability they are used to in other markets, while Japanese companies looking to overseas markets will quickly become aware of the benefits of full data analysis.
First-party data and retargeting are heavily used, as they should be. Second-party data is less mature and limited to simple vertical alignment. Third-party data is almost non-existent. —Jason Jutla, Essence
“There is still a gap in Japan,” says Anthony Plant, CEO of IPG Mediabrands Japan. “Western markets have shifted to a real-time model with a huge digital and increasingly huge programmatic focus to their communications, while Japan has been very much driven by traditional media, and hasn’t been transparent or accountable in the same way as other markets. So Japan is behind that curve.
“What you see is that some clients that are comfortable with that older model and will be for some years, especially some of the more traditional Japanese clients. The global clients, because they are exposed to what is happening in other markets, are much more aggressive in demanding and driving a more accountable communications model, but we are also seeing a Japan client base that is much more eager to get to this model as they look both inside Japan and outside for potential regional and global opportunities.”
This changing landscape means agencies have to adapt to meet those demands. That means building teams of data scientists and analysts.
“We are more focused on the business outcomes than the reach,” says Takeshi Miyazawa, MD of UM Japan. “We plan for the business outcome first, then we use our data to measure success against those business outcomes. So, you can give your audience a much more precise idea of the reach and success, and help drive their business.”
Plant says IPG has been on a building programme in Japan for over two-and a-half years, to boost the company’s digital and data capabilities. “We are investing in tools and people that allow us to bring accountability to all media,” he says. That includes traditional media because “you can look at every screen now as being held as accountable”.
“Top agencies are heavily investing in data management to fulfil marketers’ needs,” agrees Yusuke Yokota, MediaMath’s Japan country manager. “They develop data management technology by themselves or co-operate with tech companies. But the most important role of agencies is to develop a ‘marketing scenario’—how to best utilise the marketer’s data. Without scenario planning, even with high quality data, it is meaningless to the marketer. As data management progresses, agencies will develop increased transparency.”
Along with agencies setting up internal teams focused on this area, others are looking to form alliances with third parties and consulting firms. The desire for increased measurability is also shifting investment online, and away from traditional channels. According to recent Dentsu figures, online led adspend growth in Japan, with internet advertising up by 10.2 percent. The figures also showed that advertising continues on an upward trend, with spend in the market up for the fourth consecutive year.
This is also forcing a re-think for marketers in terms of which data to capture. “Like any other market, consumers’ mobility to move between publishers, devices, HTML & apps is making advertisers harder to locate, capture, target and communicate to in scale at the right time and with the relevant context,” says Yuki Imamura, managing director for APAC and Japan at Kenshoo.
“The need for the technology that answers to this question is a growing demand. This technology needs to seamlessly integrate between campaign execution, measurement, audience management and reporting.”
The most effective channels of marketing still remain very different from other developed markets. “Traditional media still works the best in terms of ROI when you want to achieve branding and awareness,” adds Imamura. National broadcasting remains dominant, but that position is less stable than it once was.
Top marketers are looking for ways to converge various kinds of data such as first-party, offline or CRM, and are also trying to integrate cross-device data including web applications as they need a more holistic view of measurement. Just measuring a single campaign’s performance is no longer enough. —Yusuke Yokota, MediaMath
There are lessons the traditional Japanese market can learn from others when it comes to measuring effectiveness. Plant urges brands to treat their agencies as strategic business partners.
“Japan clients are beginning to look at the potential now that’s possible from a more data-driven approach,” he says. “What am I trying to achieve for my business? What outcomes do I want? I would say, ask those questions of yourself and your media partner first.”
Putting data in the context of the business and marketing aims is a still a changing mindset for Japan, but a process which most experts predict will continue apace. The agencies that stand out will be those that can offer their clients a wide range of useful data that’s aligned with the business aims.
“Understanding the customers’ behaviour correctly, both online and offline and across devices, is critical to surviving in today’s competitive Japanese market,” concludes Yokota. “Top marketers are looking for ways to converge various kinds of data such as first-party, offline or CRM, and are also trying to integrate cross-device data including web applications as they need a more holistic view of measurement. Just measuring a single campaign’s performance is no longer enough. Marketers need to have KPIs aligned with the whole organisation.”
How data is fuelling online video
Unruly, an online video ad tech company owned by News Corp, entered Japan last year with high expectations for growth. Accenture expects online video spending in the market to reach nearly US$1 billion by 2017. What’s driving it?
“Household brands in Japan are turning to digital video solutions for a more data-driven and analytical approach for brand marketing over traditional means,” says Haruyo Kagawa, Unruly’s country manager for Japan.
Brands from sectors ranging from FMCG to automotive and consumer electronics are using data to develop video content strategies and optimise the video before distributing it, she says.
“We help them identify which parts of the video are driving emotional and social engagement. Alongside academics, we've found the things that drive sharing are the same things that drive brand metrics and on and offline sales, e.g. intense emotional response. Brands then use our programmatic video distribution platform to get their video watched, tracked and shared.”
Household brands in Japan are turning to digital video solutions for a more data-driven and analytical approach for brand marketing over traditional means. —Haruyo Kagawa, Unruly
Of course, you would expect someone who runs an online video company to advocate the use of online video optimisation services. But if you’re going to do video at all, you need to do it right. Research by Unruly last year showed that 80 percent of Japanese video viewers are likely to lose trust in a brand if its video feels too much like an ad.
“What we often hear from brands is a strong need for building a new method and process for digital video,” says Kagawa. “This is driven by a demand for creating video content for digital (unlike modified versions of TV creative for digital distribution).
This article was first published in Japanese on Campaignjapan.com