Online Marketing Ain't What it Used to Be

by Terrie Lloyd

According to Dentsu, Japan's largest ad agency, the amount spent in Japan last year on web advertisements was \19 billion (US$13 million). This was just a drop in the bucket compared to the more than US$600 million spent in the US, which in turn is another drop in the bucket compared to the overall electronic media (including TV and radio) ad spending for 1997.

Dentsu is certain that ad revenues will pick up as Japanese use the Web more and are predicting a national ad budget of \60 billion (US$40 million) in 1998. But while they and just about everyone else are wringing their hands over when Japanese banner advertising is going to hit the big time, they are overlooking the obvious.

The Japanese market will never get to the same size as the US while it costs \680 per hour (\200 to NTT and the remainder to an ISP) to be connected. People are not surfing to the same extent, so they are not seeing the ads -- let alone clicking on them. But that does not mean people are not using the Internet. Japanese users tend to go directly to a site that has the information they seek, and of course they are using e-mail. The pattern is simple: the average user gets from friends or traditional media the URLs of interest, logs-on, gets the data, logs-off, prints it out, and studies it while commuting on the train. Once you understand that the Japanese tend to be more focused in their Internet usage than other countries, the challenge of defining and developing an audience becomes a lot easier.

There are two proven techniques in reaching a target audience. The first is to find targeted e-mail newsletters and piggyback on them by renting space. If used correctly this technique can reach 100,000 people in less than a week, and create enough responses to start a virtual community -- a private audience for direct marketing. LINC Media [publisher of Computing Japan] recently did this with a tightly focused online weekly magazine and signed up 15,000 subscribers in only 6 weeks.

The best place to find online e-mail newsletters is http://www.mag2.co.jp, otherwise known as magu-magu. They have about 3,500 online magazines listed, many of which accept advertising and advertorials. Of course, everything is in Japanese, but you'll find some great bargains. Some publications only charge \10,000 -- \20,000 (US$70 -- US$140) to reach more than 15,000 readers.

The second technique is to create awareness and interest in the traditional media. This does not bring nearly the same volume of subscribers, but it does create a better quality audience that will be more responsive to your marketing. The best way to cut through the noise of the marketplace with traditional media is to build unique and compelling features into a web site, so that journalists just can't help but be interested. We usually consider our PR efforts successful when we are able to get into the Nikkei Shimbun morning edition and Internet magazine, two proven result getters.

Interestingly, although it isn't that hard to create a focused online community of 20,000 people, there does seem to be a natural limit to the maximum number of unique individuals (versus "sessions" or "hits" or other unqualified usage measurements) that you can pull in. I believe this is probably due to the saturation of the Japanese market (3,500 online magazines is a lot of reading!) and the limited range of interests of the average Internet user. Nikkei Biztech has the largest controlled circulation Internet community, with about 90,000 people. Other sites claim much higher numbers, but only their Webmasters know for sure.

Next month: A behind the scenes look at building a marketing campaign for http://www.dai-job.com - by combining traditional media, e-mail, and web site.

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