The real meaning of a ‘new Dentsu’

Last year, Dentsu president Toshihiro Yamamoto promised to create a ‘new Dentsu’—with a commitment to reform its work environment. The ambition is not just to prevent a recurrence of the tragic event of last year, but to reduce efficiencies and ultimately deliver a more productive Dentsu. A laudable ambition, and an opportunity for Dentsu to take a lead for Japan. Hopefully, with the strength of Dentsu’s connections to the Liberal Democrat party, it will become a beacon for Prime Minster Abe’s work style reform. But the more systemic challenge it faces is not actually reform, it’s renovation.

We've now had the privilege of working with five Japanese clients in the last two years—and the incredible experience of working in Japan. During this time, we've met with over 40 businesses and had many meetings with Dentsu. And in the course of long flights and project delivery, we've of course thought intensely about how Japanese businesses communicate and Dentsu's contribution to that.

Redmandarin is an advisory practice specialising in sponsorship. Our proposition is to offer unequalled levels of insight and sophistication in planning large, integrated communications campaigns through sponsorship to deliver targeted progress on business objectives. But as we’ve slowly come to realise, our entire approach is premised on marketing principles which are universal—outside of Japan.

Universal marketing principles?

Let’s take a look at some examples.

Both Western and Japanese businesses consider brand holistically—a combination of corporate reputation, product, marketing communications and employee relations. Western practice however is then to identify brand attributes which are understood to be drivers of purchase, and to upweight the communication of these attributes. This is based not only on the concept of purchase drivers, but on the belief that focused communications have more impact. Japanese businesses, by contrast, are reluctant to separate out specific attributes or functions, anxious that the emphasis will distort overall understanding of the brand.

Both are legitimate positions, of course. It’s just that the world outside of Japan thinks one way—and Japanese businesses think the other.

It is both an abdication of responsibility and a betrayal of trust not to absorb and assimilate western communications thinking, and understand how best to help clients communicate internationally.

This Japanese preference for the harmonious whole also clearly influences the concept of segmentation. Segmentation of course is premised on the belief that consumers or clients are not a homogenous group but an amalgamation of sub-groups with differing characteristics, needs and relationships to a product. Despite diverging levels of understanding and application from country to country, and business to business, segmentation is a marketing fact of life. Remove the concept of segmentation, and marketing communications inevitably gravitate to generic, catch-all statements. But, from our experience, Japanese businesses approach segmentation largely as a reference to different product audiences.

One final example, not strictly from the domain of marketing, is the concept of vision. It took us six months to differentiate Japanese business use of the word. Outside of Japan, vision is the inspiring destination of a corporate journey. It is used as a North Star to guide change, and is intrinsically a dynamic concept. Vision in Japan—from the many visions we've encountered—is more commonly closer to a longer term forecast. That's not to suggest Japanese businesses are static, just to call out another major difference.

Significant differences, I think you'll agree, and with huge implications for all marketing communications. Western communication practices provide a consistent framework everywhere outside of Japan, not only for delivery, but also for consumer interpretation. The result is that Japanese businesses are poorly equipped to communicate and market outside of Japan. They do not understand how audiences deconstruct messaging or the cues they expect to see. And as a consequence, Japanese management will often struggle to harness the creative power of its international agencies.

Japan’s powerful, untold stories

For a European person, to feel close to a brand means active feelings of warmth and fondness. When I ask people in London which Japanese brands they feel close to, the list is always similar: Sony, invariably first; Honda and Toyota, almost always second; Muji, Uniqlo and Shiseido in equal third, thanks to their successful retail presence. And then the list stops. It’s a short list. Okay, it’s not scientific—but as a litmus test, it consistently delivers the same results.

So the last two years in Japan have been eye opening for me: I have met some amazing businesses. Companies such as Ajinomoto: now how many businesses can lay claim to having discovered an archetypal flavour? Like ASICS, who command such immense respect from serious runners around the world. Like Alsok, which is commercially transforming the concept and service of security. Like Pasona, a uniquely values-driven organisation which reminds me strongly of my time at The Body Shop. Like Seiko, which incredibly still manufacturers every single component of every watch they produce. There are many, many more.

Perhaps the largest surprise for me has been to experience the respect and affection which Panasonic commands in Japan. In 2008, brand consultancy Landor described the Panasonic brand as ‘known all too well and loved by all too few’ and, generally speaking, little has changed. Painfully, even, if we look at television, the category which Panasonic has misadvisedly used as its consumer platform for Olympic Partnership since 1987, its image is flat by comparison with Korean and Chinese newcomers such as Samsung, LG or Huawei. But my time in Japan has kindled a strong fondness for Panasonic, and an appreciation for the depth of its commitment to research and the breadth of its innovation, which runs contrary to all previous impressions.

All of these brands, Ajinomoto, ASICS, Alsok, Panasonic and many more, have wonderful stories – stories that are almost completely untold internationally. And Japanese businesses are suffering as a result, because their marketing and sales activity is simply unsupported by the brand equity they enjoy in Japan.

Dentsu and the responsibility of leadership

The excellent FT article from October 2016 by Leo Lewis, Kana Inagaki and Robin Harding’s presents a balanced picture of the soft power welded by Dentsu. Amongst other factors, it references the Japanese norm of rotating employees through different departments. This rotation may be excellent at building broader organisational understanding, but it comes at the expense of internal expertise. Meanwhile, Dentsu’s judgment is beyond challenge.

But with power comes responsibility. In theory, Dentsu Aegis Network (DAN) provides an accomplished cultural intermediary for international markets. But in practice, brand control is managed centrally by most Japanese businesses, and international agencies apply their creativity within a communications framework built for Japan.

So despite the enviable reach and expertise of DAN, the ability of most Japanese brands to connect with consumers outside of Japan is limited by two powerful forces: an intrinsically Japanese worldview which prioritises the whole brand gestalt over messaging which is more directly relevant to audiences—and Dentsu's dominant influence over the communications practice of Japan's major businesses.

Ultimately, the challenge facing Japanese businesses is to take responsibility for their international marketing communications—but, let’s be honest, this requires cultural change of an immense scale. For Dentsu, the challenge is more direct because it is, de facto, the brand steward of Japan’s largest businesses. Given the sheer scale of its business, power and its undeniable influence over its clients' communications, it is both an abdication of responsibility and a betrayal of trust not to absorb and assimilate western communications thinking, and understand how best to help its clients communicate internationally.

The real challenge for new Dentsu

Commercial legacy for the Games isn’t measured by Games-related turnover, tourist spend or an increase in Tokyo Bay real estate values. It’s measured in exports and inward investment. That is partly a function of product and service quality and relevance. But despite the Bank of Japan’s recent upbeat Tankan report, it also fundamentally depends on the ability of Japan’s businesses to communicate with the rest of the world. In the present constellation, unless Dentsu becomes fully international in its outlook, as well as its holdings, Japanese business ambitions for global growth will happen very slowly. And Dentsu will be a very real limiting factor for Japan's international growth on the back of 2020.

So the real challenge that Dentsu faces is renovation, or re-invention. The global opportunity, both for Dentsu and Japan’s businesses, is to take the larger place on the world stage that they deserve.