It's a once in a lifetime opportunity
Truth be told, while working in a digital marketing agency in Tokyo, I am part of a number of international ecommerce masterminds. Without fail, everyone in a first world country is jealous of the CPMs that I get here in Japan. Oftentimes, I am able to reach people with my ads for half the cost that my comrades in North America. How is this possible? Well, put simply, Japan is still very much a blue ocean of opportunity when it comes to marketing online.
Background of Advertising in Japan
To understand why Japan is the way it is, I’ll first need to bore you with a bit of agency history so bear with me. As mentioned i our blog, How to Hire the Right Digital Marketing Agency in Tokyo, essentially Japan’s larger ad agencies have for years been making the bulk of their margins on traditional media placements. Even today, a one-page ad in a luxury lifestyle magazine can run you upwards of USD 20,000. In most cases, the agency doing the buying will get a 20% kickback which makes these spends far more lucrative than digital.
Since profit margins are so much higher for agencies with print, TV and outdoor in Japan, many are reluctant to make the jump online. Since no one is really promising or even considering how much ROI an activation will deliver, marketers have thus far been able to get away with reporting softer vanity metrics to back up their buys. All of this has contributed to the idea that digital isn’t as effective as other mediums. At the same time though, every commuter to Tokyo and Osaka has their eyes glued to their smartphones.
Further exacerbating this odd situation is the fact that many in Japan still view online advertising as something that they need to contact a large agency for. Due to the language barrier and a cultural aversion to trying novel approaches, you just don’t have as many avant garde marketers here who are pushing the limits of what’s possible and documenting their achievements. As a result, Japan is woefully behind where it could be in regards to the state of digital advertising.
Digital Advertising DOES Work in Japan
Now, the lack of cavalier advertisers trying to turn a quick profit on Shopify also means that there is a wealth of overproduced content in the feeds. Bluntly put, everything that comes up in our feeds reeks of an advertisement—it’s just not native to the feed on which it appears. Given the disruptive nature of a lot of what get’s run, it only stands to reason that many marketers wrongly conclude that digital doesn’t work.
Alas, digital does indeed work here in Japan and the consumer’s behavior proves this. Case in point, we (a digital marketing agency in Tokyo) were able to turn 1,000,000 yen (approx. USD 10,000) into over 25,000,000 yen (approx. USD 250,000) in just four days over Black Friday / Cyber Monday despite the consumer holiday not yet really being a “thing” in Japan. And this was for a product that had a high retail price. If digital truly didn’t work in Japan, such numbers would be inconceivable.
Despite our recent result, succeeding online in Japan does require that one commit to the platforms though. No matter which way you slice it, repurposing creative that was originally designed for TV just isn’t going to cut it on Instagram and YouTube. Sadly, this is a go-to play for a lot of media buyers here who are just looking to chuck the same creative at every placement they can, context be damned.
Here's How You Can Advertise on Digital Effectively in Japan
Instead, what marketers in Japan ought to do is make video creative that is native to the feed. This will ensure that user’s “ad alarms” are not tripped so that they actually even stop to see your content. On top of this, you’ll want to make use of all the machine learning opportunities that now power Facebook ads such as automatic placements and dynamic creative. When used in tandem, these offerings can drive truly astonishing ROIs.
When it comes to online sales, Japan really is a true blue ocean. For the reasons outlined here, there just isn’t the competition that you’d expect of the world’s third-largest economy. Because of this, you can far more easily drive profits if you’re willing to attack the market head on. While the Japanese language barrier and cultural nuances can seem daunting, we as a digital marketing agency in Tokyo are here to help. If you’re looking to really demolish online sales in Japan, shoot us a message and let’s discuss how we can help you grow.