A New Player in the Advertising Industry

My articles regarding the 'Effectiveness of Advertising' will be appearing serially in Space magazine for one year from this month. First, let me explain why I am in charge of this series of articles. Actually, it is related to the concept of SPI, the company at which I am currently working, that has made me be in charge of these articles.

SPI stands for Strategy, Productivity, Insight. We are not an advertising agency, but Japan's first marketing communications consultancy. Many of you might not be very familiar as to what is a marketing communications consultancy and have questions such as what is the difference between us and an advertising agency. Our business field has been expanded, but currently our services cover advertising media as well as general marketing communications. But to make the long story short, from the very beginning, we were the company to help advertisers achieve the greatest efficiency from their marketing communications investments (i.e., ROI).

SPI was originally founded as 'Strategic Planners International'. It was a venture company founded in 1995 by four gentlemen who used to work at a foreign-capital advertising agency. The four consisted of a foreigner who was the ex-President and three Japanese Media Directors. Strategic Planners International believed that there was huge potential in the 'old-style' advertising media environment in Japan. Seldom did companies in Japan conducted regular advertising tracking surveys or audit the effectiveness of their advertising investments. But these practices were relatively common in most other countries. Under the circumstances at that time, Strategic Planners International thought, not an advertising agency, but a company that could objectively audit the efficiency and effectiveness of advertising would be in great demand by advertisers in the near future.

Several years of success later, Strategic Planners International was acquired by the Aegis Group plc, which is one of the largest media communications and marketing research groups in the world. The Aegis Group Media is comprised of consultancy company in the USA called 'MMA', a global marketing research company called 'Synovate', and an advertising media planning/buying agency called 'Carat'. Carat is the core company within a holding company called Aegis Media.

In Europe, not advertising agencies, but media specialist agencies like Carat, which is the largest media agency in Europe, is currently most powerful in the advertising industry. These media specialist companies buy most of the advertising media in the major markets there; 85% in the UK and 75% in France, respectively. There are two reasons why media specialists have become so powerful: 1) They are able to meet advertisers demands for lower cost ad media buys, and 2) Targeting marketing of consumers has become much more difficult because of the increasing complex nature of the ad media market due to new mediums such as the Internet, which has changed attitudes towards ad media particularly among younger generations.

I believe that it is important for advertisers, not only in Europe, but also here in Japan, to increase the efficiency and effectiveness of limited marcom investments. Hakuhodo, Daiko and Yomiuri Advertising have recently formed a new media specialist agency here in Japan. This tells us that the current situation in Japan is changing. Currently, only advertisers, the media owners and advertising agencies are players in Japanese ad industry. But in Europe and the USA new players, such as media specialist companies, media auditing companies, marcom consultancies, etc., have also been establishing themselves in important positions within the industry.

In the coming year, through the theme of the 'Effectiveness of Advertising', I would like to explore innovative thinking for the advertising industry here in Japan. I not only want to examine the existing thinking within the industry, but lead new and innovative thinking with your involvement.

Please contact us with questions or for more detailed information.
spiindex@spi-consultants.net