Q&A with UM Japan boss Takeshi Miyazawa: Local thinking around media transparency is slowly changing

Takeshi MiyazawaTakeshi Miyazawa is the managing director of media agency UM McCann. He worked for Dentsu for 13 years in Japan, China and India before moving to McCann Worldgroup just over a year ago.

In this Q&A with Mumbrella Asia’s editor Robin Hicks in his office in Tokyo, Takeshi talks about transparency in what he suggests could be the world’s least transparent media market, why TV is still king, how newspapers are holding ground, and why the most active social media group in Japan is probably the oldest. 

IPG Mediabrands is the only international media agency in Japan that buys media independently. How much does size matter in Japan for media agencies?

We’re not the biggest – we are ranked around six in the market by size. The biggest in the market are all local agencies. Yes, size matters. But a key difference between Japan and other markets is that media is negotiated on a client by client basis, based on the volume of spend by media. This allows us to operate very effectively for large and smaller clients achieving competitive pricing across all media.

What do you make of the findings of the ANA report in the US, which revealed that non-transparent practices such as kickbacks and value banks are pervasive in the world’s biggest media market? In some markets in APAC, such as Australia, transparency is a big issue, but less so in others, for example Indonesia. What about Japan?

From my experience in India, transparency is certainly not an issue in that market. But Japan is probably the most grey [non-transparent] market in terms of media trading. Most local businesses are not overly concerned about transparency. If the agency provides enough for them in terms of service, then they are happy. In the West, the way the client-agency relationship is structured, everything is organised by the scope of work. But locally in Japan, the way it is arranged is based on, let’s say, a gentlemen’s agreement. This is standard local thinking, but it is slowly changing.

As an international agency, we stick to strict international [media trading] standards, and we are the only agency to do so. Other agencies may say they are keeping to international standards, but they have to buy through local agencies.

Typically in Japan employees work for their companies for their whole working lives; 40-45 years for one company. But a lot of the local companies have hired marketing professionals from the likes of P&G and Unilever, and they are bringing global best practices with them. This is bringing about change within their organisations in terms of media procurement.

A year ago I had a conversation with a client about transparency, and it was clear that he did not prioritise it. But I had a similar conversation with this client just a month ago, and he was keen to find out more, and learn about what the requirements and processes are to adopt a more transparent relationship with his media agency. So the situation is changing.

How is the conservatism of marketers affecting their transition to new channels to keep up with where consumers are going?

TV ads still take 65% of spend in Japan

TV ads still take 65% of spend in Japan

Of total media investment in Japan, 65% goes on traditional TV. It’s still a TV-driven market. The background of this is Japan’s ageing population. The average age in Japan is over 40, which is why TV is still effective because seniors still watch TV. But people over 50-60 years old are adapting for the digital economy. The most active age group that uses social media, according to our friends at Facebook, is people in their 60s.

Transit media in Japan

Transport media: big in Japan

In Japan, the commuting time is huge, especially in Tokyo where the average commute time is 42 minutes. So a combination of TV, digital screens and the digital signage in transport gives brands much more opportunity to reach their target audiences at scale. We also get a lot of enquiries from clients who say, hey, we are spending 95% of our budget on TV, but we know we have to change, so can you guys give us your credentials to show how you are keeping up with consumers?

What about programmatic trading? How significant is that in the conversations you’re having with clients, and what are clients saying about some of the concerns with programmatic, such as viewability, fraud and brand safety?

We already deliver private marketplaces for some premium brands, which enjoy the benefits of programmatic with good exposure without worrying about their brands appearing in the wrong websites. In Japan, clients are meticulous about where their brands appear, and so private marketplaces have been adopted very quickly.

At the same time, while PMPs are an interesting way of managing brands in programmatic, the inventory is pretty limited and targeting is difficult. Finding the right balance in programmatic for clients is a challenge we are working to solve fast.

You mentioned the older generation in Japan, which is the largest part of the population. How is their media behaviour changing in an increasingly digital world?

If you look at the media survey data, they’re still pretty TV driven. But we’re increasingly seeing senior embrace digital. Take my father for example. He is 70 years old. He retired last year – finally. Before he retired, he tended to watch TV, he wasn’t a digital guy. But after he retired, he had plenty of time on his hands, so he bought a digital recorder, a smart phone, got wi-fi at home, and bought an iPad to watch TV dramas. Within two months, his home had been completely digitalised. He opened a Facebook account, and began connecting with old friends from school, and then started playing golf or going fishing with them. My father is fairly typical of that age group in Japan after they retire.

Yomiuri Shimbun

Ad for Yomiuri Shimbun

What about newspapers? In other mature media markets such as Australia, we’ve seen newspapers fall off a cliff in recent years. What about Japan?

The decline has not been sharp, as newspapers in Japan are home-delivered and people have long-term subscriptions. We are seeing a lot of luxury brands starting to spend on newspaper advertising where previously they spent on magazines. Also, newspapers are one of the most effective channels for direct-response advertising, so they are holding up in that respect.

From a media perspective, what are clients talking about the most at the moment?

Most of the interest is focused on data. As clients are looking to shift budget from traditional to digital channels, for instance TV to transport media, they want to know what is the most effective mix to use. Reach is still important, but how effective the mix is is key, and how to smartly use data to achieve better business outcomes.

There’s been a lot of criticism of digital measurement recently, versus traditional measurement forms. How is the debate on measurement panning out in Japan?

The earlier methodology for TV measurement was machine based, and covered three cities. But that’s changing, and will be expanded to cover another two cites, so the sample size will grow.

Many brands are interested in how to combine TV and digital measurement systems. With digital, there are a lot of different metrics at play, and clients want more consistent KPIs.

If every medium was measured using impressions, it would be easy to compare to other media. But is one impression in the home or inside a station or in a smartphone really of equal value? Maybe not. And if someone is using a smartphone and watching television at the same time, the measurement will be different. So following the consumer journey from a measurement perspective is tricky.

What’s your view on the economy in Japan, and how that’s affecting the media landscape?

Tokyo 2020If you’d asked me three months ago, I would have given a very positive answer. But after Brexit and the appreciation of the Japanese Yen I am slightly less confident. Marketers have grown a little bit conservative in the last month or so, is my sense. But the economy is still projected to grow, and the international brands we work with feel there is opportunity. It’s a mixed situation.

For the next six months or so. But for the next few years in the run up to the [2020] Olympic Games in Tokyo, we are pretty optimistic.


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