GLOBAL BRIEF: Japan opens its doors, slowly. Western agencies hope to take advantage of Japan’s woes, Claire Cozens says

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.

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

14th.



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

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