Terrie's Take 699 -- 2012 Ad Spending Shows Interesting Trends, ebiz news from Japan

Terrie's Take terrie at mailman.japaninc.com
Sun Feb 24 22:04:11 JST 2013

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, Feb 24, 2013, Issue No. 699


- What's New -- 2012 Ad Spending Shows Interesting Trends
- News -- Entrance charge for Mt. Fuji hikers?
- Upcoming Events
- Corrections/Feedback -- Visa realities
- Travel Picks -- Sandboarding in Tottori; Rail Trip in Mie
- News Credits

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Dentsu, the world's largest single-brand advertising agency, has just
released the preliminary version of its 2012 report on advertising in
Japan. The full version will come out at the end of March. This report is
quite interesting because it helps confirm underlying areas of growth as
defined by advertiser trends -- one of course has to assume that the
advertisers know their markets well enough to correctly identify growth
segments and and media types. We have found it to be a basic truth in media
that companies generally only step up advertising when they are already
experiencing increased sales in a given segment or media and want to
reinforce the benefit.

Knowing such trends allows the rest of us to make some informed guesses
about where to take our businesses in 2013. For example, service firms can
figure out which industries are healthy and growing, and manufacturing
companies can decide/confirm whether or not to continue investing in a
given consumer market segment.

Japan's overall ad spend was JPY5.89trn in 2012, up 3.2% over 2011 and the
first upturn since 2008, although the number was still well down from the
peak of 2008. Dentsu's commentary is that ad spending rode on the back of
the 3/11 disaster recovery as well as the 2012 London Olympics. The Games
were particularly prominent in terrestrial/satellite TV and newspaper ad
spending, which were up a respectable 3% and 4.2% respectively.

But the real action, as could be guessed, was on the Internet, which saw
revenues rise 7.7% to JPY868bn. In fact, the Internet is now easily the
second largest media format in Japan, almost as large as the ad market for
magazines and newspapers combined. In contrast, radio decreased
fractionally again this year, to an ad spend of JPY124.6bn,  showing that
while operators are doing their best to hold back the Internet tide, this
particular media is under great pressure to morph into something else to

Dentsu gives a fairly good overview of what they see as the major trends.
Not surprisingly, mass consumer items such as autos, cell phones,
beverages, health and beauty products, and travel, drew the biggest
advances in advertising spending. Auto ads were up significantly, 26.9%,
mainly because of makers pushing ever-popular K-cars (engines smaller than
660cc). The losers were government public service ads, which have become
less necessary due to 3/11 recovery efforts, energy ads (also for obvious
reasons), and hobbies/sports ads. Not sure why sports would be considered
less popular for promotion -- unless advertisers are finally factoring in
the aging population...

[Continued below...]

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[...Article continues]

What Dentsu doesn't mention in its analysis, but what stands out for us in
the report, is the apparent move away from print advertising by small- and
medium-sized companies, which can't be good for publishers or the print
industry in general. We interpolate this trend from the almost 20% decrease
in classified ads and the slight decline in ads run in free papers, which
is the most favored print medium for small firms. Also particularly
hard-hit were telephone directories, suffering a y-o-y drop of 12%, and 20%
since 2010. That is one business that needs to find an internet solution
sooner rather than later.

However, there is one print media format that seems to be holding up quite
well, being particularly favored by smaller firms, and that is flyers. This
category only suffered a 4% decline, indicating that while small firms may
not be up for magazine ads, they do still have to get their message out. It
also explains why our letterbox is still stuffed with local advertiser
"chirashi" every day.

We imagine that many smaller firms have also moved to the Internet for
their marketing, but Dentsu doesn't yet break out the types of ads that
people are running online, so we can only guess which web channels are most
favored. Going by the number of web-based job ads for web marketing people
and freelance writers, though, it appears that that rather than spending on
ads, many smaller (and larger) firms are moving to blogging and networking
on Facebook, Line, and other SNS media. This trend will be difficult for
Dentsu to track, but is a category of spending that will increasingly
affect ad spending patterns.

The report also notes that a sector everyone had written off several years
ago, that of education ads by language schools, is strongly recovering.
Thanks to foreign M&A activity by major listed firms and the rapid
internationalization of Japanese mid-tier players, the need for their
employees to learn and do business in English is back, and the advertisers
know this. We think this is the main reason that rapid transit advertising
was also up almost 4% last year. Train carriage ad panels are where the
language schools like to focus their message and the competition for this
space on certain train lines is fierce.


While we're on the topic of media and Dentsu, interesting to see the
company join up with NTV, Asahi TV, TBS, TV Tokyo, Shogakukan, and others
to form a Japanese TV broadcasting channel in Singapore. The "Hello! Japan"
cable channel launches tomorrow, run by a Singapore-based (but
Japanese-run) firm called J Food & Culture Pte. Ltd. The new StarHub
channel will initially serve about 50% of Singapore's households, but is
planned to eventually reach viewers in 10 other countries in the Asia
Pacific, including Hong Kong, Korea, India, Australia, and most of the
ASEAN countries. Content will be a mix of drama, talk shows, manga, sports,
documentaries, and travel, all of which will be either dubbed or sub-titled
-- quite a big job requiring plenty of translators...

It's hard to see how the new channel will make money, but then given the
list of shareholders, perhaps that isn't the intent. The press release
Dentsu put out for the channel clearly states that, "the export of
broadcast content is regarded as a strategic move to promote awareness and
understanding of a culture which can increase the degree of positive
feelings toward 'that country'." In this case, "that country" means Japan.
Looks like Japan is getting smart and realizing that it should feed a
fertile future market with positive images. Here at home there are plenty
of small exporters and tourism operators cheering on any efforts that
achieve this.

Another reason why money may not be such an issue for Hello! Japan is the
involvement of the government, which of course has an agenda in promoting
the positive image of Japan abroad. The Yomiuri newspaper reported back in
January that Hello! Japan would be drawing funds from the Cool Japan Fund
-- perhaps as much as JPY8bn. The rationale for backing the project, apart
from the propaganda factor, is that in 2011 the export of Japanese cultural
content and products was estimated to be around JPY2.3trn, and the
government says it wants this number to increase to JPY11trn by 2020, or
JPY17trn if you were to include food exports.

Given that until now only NHK has been promoting Japanese content overseas,
the new J Food and Culture company seems to be in the right place at the
right time, providing a more practical and open medium for Japan's
commercial interests to increase their SE Asia exposure. Our take is that
the new channel will be a hit.

...The information janitors/


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+++ NEWS

- Entrance charge for Mt. Fuji hikers?
- 5-year long IPO drought about to end
- Net right-wingers harass English teacher in Okinawa
- Yen about to strengthen again?
- China exports its pollution to Fukuoka

=> Entrance charge for Mt. Fuji hikers?

In what we think is a very retrograde step for local tourism, the governors
of Yamanashi and Shizuoka have said that they are planning to introduce an
entrance fee for people hiking Mt. Fuji. No word yet on how much will be
levied, but the charges may appear as early as the start of the 2013
climbing season. ***Ed: The governors say that the fee will be used to help
"environmental protection" efforts on the mountain, but our guess is that
little of these monies will wind up being spent that way. Instead we bet
they want to tap into the 250,000-300,000 climbers each year, and most of
the proceeds will go to whichever government workers they assign to manage
the collection efforts. At JPY1,000/person for example, this would be a
very healthy and steady income flow for the lucky recipients.** (Source: TT
commentary from e.nikkei.com, Feb 23, 2013)


=> 5-year long IPO drought about to end

After a tough 5 years for Initial Public Offerings (IPOs) in Japan, the
drought is about to break, with 13 IPOs being planned for the first quarter
of this year. This is the highest level of IPOs since 2008, the year of the
Lehman Shock, and well up on the seven Q1 IPOs of last year. Expected to go
public are an online retailer of organic veges, a hospital software
company, a freight company, and a low-cost home builder. ***Ed: Probably
too early to predict whether this marks a turning point in the VC industry
and public listings. Let's see how these stocks do price-wise 1 day and 90
days out from their listings.** (Source: TT commentary from e.nikkei.com,
Feb 22, 2013)


=> Net right-wingers harass English teacher in Okinawa

With the appearance of a right-wing government, the activities of
right-wingers online have increased as well, and an English teacher in
Okinawa is now feeling their wrath. This interesting Washington Post
article covers the story of one Miki Dezaki (an American), who teaches his
classes that racial and other forms of discrimination also exist in Japan,
not just overseas. He has been getting tacit approval from his school over
the subject matter, because the fact is that Okinawans have long faced
discrimination by Tokyo and the mainland in general. But now under pressure
from ni-channeru (2-channel) "netouyu" (net right wingers), the school is
telling him to take his posts on Youtube.com down. ***Ed: We have said many
times now, that Japan needs to face up to its domestic discrimination
problem and implement a law that outlaws it. Unfortunately for Mr Dezaki,
he is experiencing first-hand what happens when such basic protections are
not available.** (Source: TT commentary from washingtonpost.com, Feb 22,


=> Yen about to strengthen again?

Interesting WSJ article tying the recent announcement by the Reserve Bank
of NZ that it would intervene in the currency markets to reduce the value
of the NZ dollar versus the Japanese yen. The article points out that while
the NZ announcement might be viewed as the latest salvo in an Asia-Pacific
currency war, that in fact, two of the so-called "commodity currencies",
the Canadian dollar and Australian dollar (NZ dollar is the third) have
already starting weakening against the yen and that the NZ dollar is likely
to follow suit soon. The WSJ reckons that the main cause of the run-up in
these currencies has been the carry trade (borrowing cheap Japanese yen to
trade at higher rates in Canada, Australia, and NZ), and that this trade is
coming to an end. (Source: TT commentary from wsj.com, Feb 22, 2013)


=> China exports its pollution to Fukuoka

Fukuoka is usually a great place to visit and it is small enough that the
air and sea are clean. But not in January and February, when its proximity
to China means that spring winds push the muck generated in generated over
to Kyushu. Apparently smog levels exceeded Japan's recommended limit on
Saturday, with PM2.5 particulates reaching a density of 50.5ugm/m3. The
maximum recommended level is 35ugm/m3. The Fukuoka Prefectural government
told residents to wear face masks and to forego hanging out laundry.
(Source: TT commentary from japantimes.co.jp, Feb 24, 2013)


NOTE: Broken links
Some online news sources remove their articles after just a few days of
posting them, thus breaking our links -- we apologize for the inconvenience.



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In this section we run comments and corrections submitted by readers. We
encourage you to spot our mistakes and amplify our points, by email, to
editors at terrie.com.

=> Last week in TT698, we described how Japan has plenty of competition in
the immigration stakes, when it comes to attracting new skilled migrants to
live here. AND we didn't even get into how higher taxes might impact the
situation! We received excellent feedback from local moving and housing
expert, Steve Burson, about just what the issues are for the new Highly
Skilled visa.

***  Steve's Response:
The Highly Skilled Foreign Professional visa has not been particularly
successful and there are currently many on-going discussions about how to
make it better (there are a number of people in the foreign community being
approached to give their ideas).

 * It needs to be understood that the Highly Skilled Foreign Professional
visa is not a new visa category. It is a something that has been placed
under the “Designated Activities Visa” that exists from previous times.
Designated activities visas are issued against a particular “activity” at a
particular “organization”. Once the activity or the organization changes,
the visa is no longer valid. It is important to understand that you can’t
change jobs on a Highly Skilled Foreign Professional visa without going
through the whole process again.
* The Immigration Bureau/Justice Ministry understands that creating a new
visa category is probably best. However, this requires Diet approval, and
it was judged that the Highly Skilled Foreign Professional visa would never
start if they waited for something to get passed through the Diet (at the
time nothing much was getting passed by the DPJ). So, the ministry knew
from the outset that the Highly Skilled Foreign Professional visa was not
going to be the perfect system, but they pushed forward to have it
implemented anyway, as they felt they at least needed to start something.
* The immigration bureau will of course not tell you this straight out; it
is something I have understood through many conversations over the past 2
years. I think the fact that they have tried doing something, and are
forwardly looking to try and make it better deserves some credit.
Hopefully, with a new government and a better system, a new visa category
really can be passed through the Diet, to really try and encourage skilled
workers to migrate to Japan.

*(Thanks to Steve Burson: H&R Group, President, *.www.MoreThanRelo.com)


=> Sand Boarding and Paragliding, Tottori
The best ways to enjoy the Tottori Sand Dunes

Looking to get the most out of your trip to the Tottori Sand Dunes? Here
are two things that could make it unforgettable. Ever tried, or even heard
of, sand boarding? It's exactly what it sounds like. Readers who are
snowboarders, surfers and skateboarders should have no trouble picking it

Get in some summer sliding while enjoying the deep blue Sea of Japan, the
yellow-white sand dunes, and the pine forests and mountains on 3 sides.
There are also some small drops on the dune face for anyone feeling
confident enough to take them. A warning to the snowboarders, the sand
grips the edge of a sand board a lot more tightly than snow grips a
snowboard's edge. Dig your edge in too deep and you are going down. Your
weight will also need to be over your back foot. Get used to these two
things and you're good to go.


=> Memorable train journey along coast of Mie Prefecture, Mie

Memorable train journeys immensely enrich a traveler’s experience. Riding a
train is not just a question of getting from A to B but rather it's part of
discovering a foreign country. Just sit back, relax, and watch the
landscape pass by while on-the-go to your next sightseeing spot. You will
learn a lot about Japan from this passive sort of sightseeing than you
might imagine.

Riding the JR Wideview Nanki Express from Nagoya to Shingu and then to the
train’s terminal in Kii-Katsura, a well-known onsen resort in the Kumano
area of Wakayama Prefecture, is just such a journey. Certainly you will
discover that not all of Japan is urban, built-up land -- not just yet. The
Kii Peninsula is the piece of Honshu that sticks out from the "belly" of
Osaka. Three prefectures - Wakayama, Mie and Nara - share this southern
peninsular and it is almost entirely covered in mountains and is much less




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Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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