Japan Travel Market Out of Favor with Europe

Yesterday, I had lunch with one of the chief directors of an organization called ANTOR. I work with him as an advisor for promotion for his country and help them with marketing and promotion for Japan.

While every other European nation has seen travel and travelers from Japan drop precipitously over these last 3 years his country has seen a 300% increase in travelers from Japan! Yes. Yes. Thank you for your kind applause. Thank you. Thank you.


... That is until the March 11, 2011 disaster struck. 


After that catastrophe, business across the board in Japan has dropped off a cliff for most sectors of the market and travel is one of the hardest hit. 


He related to me many of his worries and travails concerning Japan and the travel market.


Somethings he told me that really surprised me were that:


*After the March 11, 2011 earthquake, tsunami and nuclear accident in Japan, and some European nations citizens left Japan, many government tourism agencies have moved their offices permanently out of Japan and into China.


* Many European nations have slashed their promotional budgets for Japan. In his case, his advertising budget for Japan was cut by 70%!  

Annual ANTOR Japan event: Let's Go Kaigai!

*ANTOR Japan member countries have an annual summer promotion. Every year they have over 35 nations participate in this big promotion in Tokyo. This year they will have only 12 countries participating.


*The European Union Tourism Organization has cut the advertising budget  for Japan to.... Are you ready for it?.. To zero. ZERO! Zip. Nada. Nothing! They have completely given up on Japan and will not spend any more money on promotion on this country. They have redirected all the budget to China!


Sigh....


Most definitely a long hot summer coming for Japan. When will the tourism industry (all industry) recover in this country?

Japan to Hire Foreigners for Travel Advice

Wow! Look at this. Here's one place that the Japanese government seems to be allowing to practice of hiring foreigners!

(Reuters) - Japan is planning to recruit dozens of foreigners to visit the country and give advice on how to make things more travel-friendly for non-Japanese speaking visitors even as it aims for higher tourist numbers.

The government will pay travel allowances to about 100 native English, Chinese and Korean speakers to visit key cities and come up with ideas on how to make it easier for travelers to use public transport, stay at local hotels and eat at local restaurants, said an official at the Japan Tourism Agency.

Although Japan has made an effort to provide information in other languages in recent years, especially in major cities, these remain hit-or-miss and English still dominates.

But Japan's National Tourism Organization projects that the number of visitors from China will reach a record 1.5 million this year, many of them high-spending tourists eager to shop for Japanese electronics and other goods.

"What we hear is that there really isn't enough information on things like how to buy train tickets, or how to use the baths in traditional Japanese inns," said the official.

"It's hard for us Japanese to judge how prepared different parts of the country are -- we need people to use as monitors who really don't know Japan at all."

The official said one way to recruit these travelers could be over the Internet but that they would look at other methods such as asking the relatives of foreign students studying in Japan.

All expenses within Japan will be paid by branch offices of the Transport Ministry, which oversees the Tourism Agency. Part of plane fares to Japan may also be covered.

The information will be compiled by the government as part of a survey of tourism preparedness by late March next year.

From Reuters

Marketing Japan: Why Google Worries About its Own Future....

By Mike in Tokyo Rogers

Google is dominating the Internet scene today and seems like they have destroyed the competition. But did you know that there are rumblings below the surface? Did you know that Google themselves fear for their position in the long run? It's true.

If you stop to think about it for a few moments, you can see where Google may be headed for some bad times in the very near future. Some reasons have to do with Google being so good at what they do that they have created a hole in their armor that can be exploited.

Today, I will lay out just a few of the reasons that Google and outside Internet experts alike seem to think that Google won't be king of the hill for too much longer. Here's why....

Have you ever asked the question, "Where will Google be in 10 years?"

I think a look at what has happened to major terrestrial TV broadcasting stations, or what has happened to Rock "hit" radio in recent years is a good indicator of what might probably happen to Google. If you consider the shape these two entities - TV and radio - are in today, as compared with their dominant position just 15 years ago, then it's not too far of a stretch of the imagination to see Google as, perhaps not a bit player, but not the dominant player.

Why?

I think it has to do with a few things; first the fracturing of the audience and the variety of choice given to us by the Internet due to the Long Tail. Because the Internet allows us so much choice, that choice allows people to exercise their quite unique individual tastes. This is damaging the "hit" market and exponentially growing the "niche" market. When people have many choices, they will exercise that choice.

When there were only 4 types of jam for toast, for example; strawberry, grape, blueberry or orange marmalade, people bought one of those. Now that there are hundreds - and the online stores can carry thousands - people are buying the peach, plum, or Canadian Boysenberry.

When a customer, buys one product, like Canadian Boysenberry, that's money displaced that takes away from a purchase of generic strawberry. That is what is called, "the Long Tail."

(See brief information on the Long Tail see "A Primer on the Long tail" here and "Is the Long Tail all Junk" here. For an in-depth analysis, please read Chris Anderson's definitive work in The Long Tail.)

The Long Tail

What does all this have to do with Google? Ah, there is the crux.

Think of Google search engine like a TV station. The TV station must have very broad appeal in order to survive... Today, this broad appeal actually has started working against them in the long run.

Take the example I often use of TV Tokyo. Let's compare TV Tokyo and, the Food Channel on TV:

TV Tokyo has over 1,000 employees.
Food Channel TV has about 20 employees.

TV Tokyo has a extremely wide target audience of anywhere between 6-years-old kids to 84-year-old seniors.
Food Channel TV has a focused target audience of women between 34-years-old to 50-years-old.

It costs about $150,000 (USD) to buy 25 commercials on TV Tokyo.
It costs about $8,000 (USD) to buy 25 commercials on Food Channel.

Now, the question is; "You are a manufacturer of kitchen appliances and cook ware. Where will you advertise?"

It is obvious that you will take the focused marketing that the Food Channel offers.... Now, extrapolate this into every segment of manufacturing, goods, services and possible sponsorships. What do you get?

You get a market that demands specialization. Isn't it obvious? Isn't that the way everything has been going? What restaurants do well? The family restaurant that has everything, but nothing is especially tasty, or the specialization restaurant that only serves, say, Italian food, or the sushi shop, or the Chinese restaurant?

The catch-all shops are, in many ways, still useful and profitable (see WalMart), but they are getting fierce competition from specialization and will be in the future. People, when given a choice, will choice specialization.

I touched on that in more detail here in "Marketing Japan: Why Digital Conversion Will Destroy TV Tokyo and TBS":

When there are 300 TV channels competing for your attention and sponsor's money - both of these critical factors to the survival of TV (audience and money) will be more widely dispersed.

Think of it this way: You are the maker of, say, outdoor goods like tents, bicycles and barbeques. Say, the price for 25 TV ads on a TV station like TV Tokyo is about $150,000 (USD). The price of 35 TV ads on the sports channel is $14,000. Sure there are more viewers on TV Tokyo, but Sports TV offers a targeted audience of men who like sports (and, by the way, many are probably are married, have families, and like the outdoors).... TV Tokyo's audience ranges from 10-year-olds to 80-year-olds; Sports TV target audience is mainly 30 ~ 50-year-old men.

Now, where would you spend the money if you were the sponsor? 

It is obvious that you would go for the Sports TV. It will be the same for all manufacturers whether they make diapers or women's fashion brand shoes. The diaspora of audience will make targeting even more important as time goes by.

Now, keep this in mind... Sit back and consider... Like I said, if Google were a TV station... Google is a catch all search engine... Whatever you want to search for, Google search engine has...

But wait a minute! What about specialization?

What if some smart Internet site, say a Food Channel, decides that they wanted to corner the market for Internet searches for "Food" and anything at all related to just food and food only.

Some might say, well, "Google will make one too..."

No, they won't... They can't... They might try though...

Think back to the Long Tail and all the millions and billions (more!) niches there are! There are niches inside of niches! Google cannot compete with that...

But a small company focusing on their niche and that niche only can... And they can do very well at it.

Then imagine that every niche in the world had their own search engine. Think of it; anything to do with cars might have their own specific search engine, travel only (then inside of "travel only" sub-niches like "Travel in Western Europe" or "Travel in Lower New Jersey"); the same with sports, medicine, shopping for women's clothes, you name it.

Can you see? Google could never keep up with that.

Google would become like today's catch all TV station and the niche search engines would eat them up.

From what I am seeing, I am beginning to think that this is inevitable... I suspect that Google does too!

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Keywords:
Google search engine, mike rogers, Marketing Japan, Google, Long Tail, travel, food, TV, TV Tokyo, sports, medicine, cars,  The long Tail, Chris Anderson,  Mike in Tokyo Rogers, niche, niches

The Advertising Scam in Japan

This is a letter I wrote to a business associate....

Don't Waste Money Going Through Old Ad Agencies

Before your company goes and spends a bunch of money on old media through the old channels, please read this.

We specialize in repairing client websites in upgrading to web 2.0 (most are still web 1.0 - so they are 6 years behind). This involves getting bloggers aboard, SEO and daily updates to build community. You can see by the bio that my partners are experts in this field.

Once we do fix the web problems, then we integrate an intelligent Mortar and Click plan that drives old media users to the new media. It is extremely cheap and cost effective under our method.

You can use this info or think of using it in one of two ways: Firstly, we don't mind if you middle-man in the deals, so, say, a TV ad campaign that we charge ¥2.2 million for, you can charge your client's, say, ¥3.2 million for and pocket the ¥1 million (up to you on margins, but I recommend keeping them low, that way word spreads fast). Or, two; using us to represent your projects.

Now, we only focus on travel and airlines (we will expand into fashion later this year).... So that may or may not be your business focus. That's OK. We only work with people we like and trust, so if you are interested, then that's great.

An important point about all of this is that we have to keep it under our hat the prices that we can buy this media for or our connections might get into hot water at the TV stations or magazines. We do not involve the station of magazine/newspaper sales departments in our negotiations; we go directly to hensei (programming department). Since we are media insiders, we know exactly who to talk to, how it works, and when to get the dirt cheap campaigns. Like I mentioned, say, twenty-five 15 second commercials a week on TBS or TV Tokyo, 6 am - 11 pm, normally about ¥16,500,000.... We can do that (and already have many times) for ¥2.2 million.

Anyhow, that's basically it. If you are interested in hearing more, just let me know.

About keeping our deals hush hush; let me explain. The reasons for doing so might surprise you...

For many years Dentsu & crowd have dominated the ad agency market, as you know. They have totally corrupted the process so that there is no transparency between client and agency at all. The bizarre part is that new ad agencies follow this model.

For example, you go to Dentsu to buy a TV commercial. They tell you it costs ¥50,000,000. Then they also tell you it is a 40% margin. You pay ¥70,000,000. The commercial airs. When it is over, you never see the bill from the TV station. You never really do know what the ads cost. 

One thing about this ad business deal that you probably do not know is that the TV, radio, print, etc. they all hate Dentsu also. Why? Because we know what they are doing when they sell the commercials. From the station perspective, they  WANT to discount. But Dentsu has had such a hold for so long that they have frightened the Japanese companies into submission.... This is the big reason we work only with foreign companies. Foreign companies, generally speaking, don't care about Dentsu. There are people inside the broadcasting and print industry who want to take down this Dentsu system and we work with them...So we must stick with foreign companies for now. 10 years from now? Expand into Japanese companies. (Currently, even if a Japanese company wanted to work with us, some old fashioned thinker in marketing would quash it. Why? The Dentsu system has been around for 100 years. Us? 1 year. The old guys are worried that, if they piss of Dentsu, then Dentsu will not help them anymore - not that Dentsu is doing anything for them now!) 

We hope to provide the solution. Koji Kamibayashi and I are industry insiders. Koji and Tim are internet experts. We see an opportunity. We will only deal with foreign companies who are trying to do business in Japan (I mean foreign companies who are trying to sell to the Japanese).

Also, I arranged many barter deals for clients through another new system we developed whereby we have created a sort of "inkai" among our clients and satellite partners.... This was about ¥20,000,000 ~ ¥30,000,000 worth of promotion that I arranged for retainer fee only (¥1,900,000). There was no money passed between our client's and stations for this stuff.

Japan is astronomically high. Dentsu wants to keep it that way....

Dentsu has had such a tight hold on this business for so long that they have frightened the Japanese companies into submission.... Even if Denstu is selling no commercials at all for a TV station, old habits die hard, and the people-in-charge at the stations are afraid that, if they go outside the customary way things have always been done, then Dentsu might get mad at them. 

The key to the future and breaking down the old-guard are the foreign companies in Japan. Foreign companies, generally speaking, don't care about Dentsu. There are people inside the broadcasting and print industry who want to take down this "Dentsu system." 

These are the companies that I like to work with. 

10 years from now? Expand into Japanese companies. (Currently, even if a Japanese company wanted to work with us, some old fashioned thinker in marketing would quash it. Why? The Dentsu system has been around for 100 years. Us? 1 year. The old guys are worried that, if they piss of Dentsu, then Dentsu will not help them anymore - not that Dentsu is doing anything for them now!) 

We hope to provide the solution. Koji Kamibayashi and I are industry insiders. Koji and Tim are internet experts. We see an opportunity. We will only deal with foreign companies who are trying to do business in Japan (I mean foreign companies who are trying to sell to the Japanese - not companies that deal in the Metropolis magazine crowd - no offense intended).

I arranged dozens of barter deals for clients through another new system we developed whereby we have created a sort of "inkai" (business association) among our clients and satellite partners.... This was about ¥20,000,000 ~ ¥30,000,000 worth of promotion that I arranged for retainer fee only (¥1,900,000). There was no money passed between our client's and stations for this stuff (there's lots more, but this is a sample).

Anyhow, like I said, if you need more details, I can come see you. Maybe we'd be good, mutually beneficial partners.


See you,


Mike


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---Keywords:
Ad agencies, Dentsu, inkai, broadcasting, bloggers, SEO, travel, airlines, TBS, TV Tokyo