Digital space challenges companies to keep up with marketing innovations

Japan is without a doubt the hottest consumer laboratory in the world for consumer connectivity.

Looking at “mobile” subscribers, there are some 69 million subscribers using mobile data services, making mobile Internet penetration in Japan more than twice that of the U.S. or top European countries. Despite the brutal recession of the last couple of years, Japanese online sales are thriving and have increased by 17% annually since 2005. By 2015, Japan’s online retail market is projected to grow as large as US$70 billion.

One interesting way to gauge the increasing significance of “all things digital” is through the health of mobile marketing and advertising expenditures. In 2009, Japan’s mobile marketing and advertising spending reportedly totaled 103 billion yen (US$1.14 billion), demonstrating a 13% year-on-year growth rate. It should be noted that this year was considered to be low (presumably affected negatively by the poor economy), since growth in the previous year had been 59%.

Thinking ahead, Dentsu, which is said to be the world’s largest advertising agency, recently announced it partnership with Apple for sales of the mobile device advertising platform “iAd” in Japan. Dentsu also recently announced its establishment of a 10 billion yen investment fund that will target a broad range of digital businesses with foreign and domestic partners. Believe me, Dentsu knows.

Looking at the digital space as yet another media channel (or set of channels), it is clear that:

– A growing number of consumers are constantly exposed to information and promotional offers through increasingly user-friendly and mobile devices (i.e. devices through which the Internet may be accessed, whether that is laptop, smart phone, tablet, PDA, etc.).

– Consumer relationships with products and brands is changing, and the “path to purchase” is becoming more complex and nuanced, with “social” aspects (i.e. blogs, social networks, etc.) playing an increasingly important role in how consumers evaluate, purchase, and share opinions about brands.

– Marketers today are scrambling to “meet the consumer halfway” with new ways of communicating, interacting and selling via the various connected devices and avenues available.

There are many interesting examples of how companies are incorporating digital-based strategies into their marketing and communications activities with customers and prospective customers, particularly in the area of social media.

American company Twitter, whose social networking environment is even more well-leveraged in Japan than in its home market, has achieved rapid critical mass in Japan and hence companies are increasingly finding new and different ways of using it.

Coca-Cola promoted both its Georgia Espresso Blux and its new “self care” drink called LOVEBODY via accounts on Twitter; both utilized inter-related campaigns involving creative use of tweeting as well as subway ads and TV commercials. Dell reportedly reaches Twitter users in 12 countries; the number of users who have signed up to receive Dell’s tweets has grown steadily over the past several months, to 1.5 million.

Other companies actively working to engage current and potential customers via the digital space are diverse, and range from brick-and-mortar convenience retailers to high-end luxury brands (e.g. 7-Eleven, Lawson’s, KDDI, Burberry and Polo Ralph Lauren).

Worldwide, approximately 80 of the Fortune Global 100 companies are reportedly using at least one of the top social media platforms to actively engage with stakeholders. Considering its high degree of mobile lifestyle adoption and sophisticated devices, Japan appears to offer multi-national companies a fertile environment for honing digital marketing strategies that can in turn can be used elsewhere in the world.

Debbie Howard is Chairman of CarterJMRN and President Emeritus of the American Chamber of Commerce in Japan.

Originally Published in Nikkei Weekly, 6th December 2010

CarterJMRN is a strategic market research agency that has been helping clients with consumers and businesses in Japan and beyond since 1989.

We believe that, although the terrain you face in building a successful marketing strategy and activation path sometimes seems obscure, the path to success is knowable and that the consumer is the guide who will show you the way.

Find out more and get in touch on our site

Let's Talk