By CLAIRE COZENS, campaignlive.co.uk, Friday, 28 August 1998 12:00AM
Much has been made of the speed with which foreign advertising
groups are entering the Japanese market following the slump in the
Japanese economy. TBWA’s announcement (Campaign, last week) that it is
to acquire a majority stake in the Japanese advertising agency, Nippo,
follows WPP’s acquisition of a 20 per cent stake in Japan’s third
largest agency, Asatsu. And only two months ago, Omnicom bought 20 per
cent of Japan’s ninth largest agency, I&S.
But, until relatively recently, many advertising giants have been
under-represented in the world’s second-biggest market.
Japan’s economic crisis is bringing opportunities unthinkable only a few
years ago. ’A number of issues are coinciding to make this kind of deal
more feasible,’ Michael Greenlees, president of TBWA, says. ’The
consolidation of the ad industry in Japan means smaller companies are
having to rethink their strategies.’
In the current economic climate, Japanese agency owners are keen to look
for fresh equity and management know-how to enable them to survive and
many are courting foreign companies.
Another spur for western agencies to strengthen their positions in Japan
is the rapidly growing number of US and European companies, particularly
in the deregulated financial services sector.
Although TBWA has links with Japan’s number two agency, Hakuhodo, it has
for some time been trying to enter the territory via acquisition.
To an extent, Omnicom is playing catch-up in the Japanese market. The
Interpublic Group, WPP and Young & Rubicam all have stronger
representation in Japan. According to Ad Age International,
McCann-Erickson’s Japanese agency stands in seventh position, Dentsu
Young & Rubicam is in 13th place and J. Walter Thompson Tokyo is
In spite of all the changes, Japan remains a relatively closed market
dominated by two domestic giants, Dentsu and Hakuhodo. It is slowly
opening up, but remains a tough market to crack.
This article was first published on campaignlive.co.uk