Right questions, wrong audience

A questionnaire from Japan’s Ministry of International Trade and Industry (MITI), sent to the Japan Advertising Agencies Association (JAAA) and leading Japanese agencies, is causing consternation among many industry executives.

The questionnaire is designed to help MITI make comparisons between the US, Europe and Japanese advertising industries. It was created to prepare Japan for the next World Trade Organisation talks in 2000, as the country often comes in for criticism on such occasions. The US frequently argues that many Japanese markets are closed to foreign competition, with practices that raise the price of market entry or ensure foreign competitors make slow progress on Japanese turf.

Most of the questionnaire is designed to collect basic facts and figures about the Japanese advertising industry and the broad business plans of Japanese agencies.

But a number of questions touch on the sensitive issue of foreign competition. For example, one question asks about the market shares of Western agencies in Japan and adds, in parentheses: “The US was demanding to secure market share [targets] in the semi-conductor and automobile negotiations.”

Questions are also asked about the market dominance of Dentsu and Hakuhodo; agency shares of prime-time TV (Dentsu has about 50 per cent); the lack of written agreements between Japanese agencies and their clients, and between Japanese agencies and the media; the preferential discounts offered to some advertisers; and the lack of financial transparency.

All these topics have long vexed managers of international agencies, and many of their clients in Japan. Yet, according to a spokesman in MITI’s trade relations bureau, answers to the questionnaire indicated that foreign agencies experience no undue problems in Japan.

Had foreign agencies been asked their views, however, the results might have been different. Agencies cite problems such as ascertaining whether TV spots are aired as scheduled outside the main metropolitan regions (recent spot checks have caught a number of TV stations invoicing for ads they never transmit), and the difficulty of conducting media research in Japan.

The industry’s main provider of media research data, Video Research Company, is part-owned by Dentsu and Hakuhodo, and sets prices so high that research is scarcely affordable, thereby putting foreign agencies’ planning activities at a disadvantage. Dentsu and Hakuhodo, meanwhile, are investing heavily in their own sophisticated proprietary research systems.

But it doesn’t matter whom MITI or the JAAA consulted over the questionnaire. There is still time for the European and US negotiators to research the questions – for which the Japanese are already preparing some deft answers.


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