Japan - it's a different world.
In its 40+ year history in Japan, McCann Erickson have
become not only the largest foreign agency in the country (9th) but have
also assembled a long list of Japanese clients. We asked Max Gosling,
president/CEO of McCann-Erickson in Japan, for his perspective on some
of the challenges Western advertisers face in the world’s
second largest marketplace, after the USA.
- DK.
“. . . perhaps the greatest difference between working with Japanese
agencies and the global agencies is the lack of financial transparency
in Japan. This is a constant cause of concern for Western advertisers,” says Max Gosling, president of McCann Erickson in Japan. (Picture right) .
One fundamental difference is a lack of understanding of brands and brand building in the Western sense. Many Japanese companies rely on the corporate brand to carry all of their individual products. Individual products seldom have any brand equity beyond that of the corporate brand. As a result, many products have very short life cycles - perhaps only 3 years. Additionally, many consumer markets are characterized by an incessant bombardment of new products with new names, ingredients, or variants. This works against building long-lived brands with deep equity. Against this background, global brand strategies do work in Japan and can provide a strong competitive advantage for Western advertisers, however they need sensitive interpretation for success.
One practice, which works against brand building, is the high level of client conflict within large Japanese agencies which often handle multiple competing brands. It is rare for one agency to be responsible for the total communications of a brand. One agency may handle television advertising, another magazines, and yet another newspapers. Often, there is no single brand champion on the agency side.
Another difference from many other major markets is the lack of media audience measurement data in Japan. For example, only 2 of Japan’s 32 television markets have daily people meter data available. Western clients can partially overcome this by good strategic media planning upfront. Most of the market retains a bulk-buying attitude to media, with little post analysis of performance. Western clients should not accept this. Even with the lack of data for many regions, in the key markets of Tokyo and Osaka, significant media efficiencies are achievable through planning and post analysis in ways similar to other developed markets.
Another difference. Japanese agencies often act as media sellers. This is not likely to change soon because media companies have significant equity in many agencies, and agency remuneration is still based largely on media commissions.
Much advertising in Japan focuses on execution rather than strategy. Japanese celebrities are widely used in the 15’ TV commercials that dominate the airwaves. The same celebrities may advertise a number of different products concurrently and so the celebrity rather than the brand is the hero.
However, perhaps the greatest difference between working with Japanese agencies and the global agencies is the lack of financial transparency in Japan. This is a constant cause of concern for Western advertisers
In conclusion, if you combine the lack of brand understanding, the tendency to split brand assignments between agencies, the practice of Japanese agencies handling competitive clients, the lack of media audience measurement, the focus on execution using celebrities, and the lack of financial transparency between agency and client, Western advertisers coming to Japan enter a very different world.