How will the emergence of new advertising methods transform advertising communication and business?

Amid the emergence of new advertising methods, what transformations will the advertising communication business face? We discussed its characteristics and future potential.

Should we buy "slots"? Or focus on "attributes"?

Uemura: I originally came from television at Dentsu Inc., but then programmatic advertising emerged online and gained attention. In the internet industry, buying a pre-reserved "slot" for ad placement is called reservation-based. This also applies to the four major mass media, right?

With reservation-based advertising, exposure is fixed at the time of ordering: the exact date, time, and placement. The billing amount is also determined at the time of order. In contrast, with programmatic advertising, neither the exposure time nor the billing amount is fixed at the time of ordering. You don't know how much you'll pay, or if you'll get placement, until the results are in. While there might be a set upper limit for placement costs, the rest is left to chance. It's a world unlike any previous advertising.

There's also the perspective of whether you buy based on media slots/pages or user attributes. Reserved advertising on the four major mass media outlets or portal sites involves buying slots or pages. In contrast, online advertising includes methods where ads are displayed based on user demographics, like "40-something male white-collar workers living in Tokyo," even though you don't know exactly which page or slot they'll appear on.

This type of programmatic advertising presents two major functional issues. First, it makes planning difficult. For example, you can't guarantee massive exposure on a specific day to coincide with a new product launch. This makes it unsuitable for campaigns. This issue also impacts material procurement, distribution strategies, and annual business planning.

The second problem stems from buying and selling ads based on those "attributes." While you can target "Tokyo-based, 40-something white-collar workers," the same person's mood is completely different when reading the business section on Monday morning, the movie listings in the newspaper on Friday evening, or when doing childcare on Saturday afternoon. Placing a stroller ad in the Monday morning business section just because it's the same person is pointless. It means we can't run ads tailored to the preferences of those watching programs or reading pages, as the four major mass media have always done.

Oku: Even in the online world, there are sites where attributes don't matter much, right?

Uemura: Recipe sites are a prime example. People visiting recipe sites aren't defined by age, gender, or location. They're simply people who want to cook. So, placing a seasoning ad there poses no problem. Instead of targeting people, you just need to match the ad message to the atmosphere created by the content or media. So, the operational mindset that says you should just target people, completely ignoring the value of the content or contact point, definitely doesn't apply to everything.

 

The best of both worlds: reservation-based and programmatic? The concept of pre-approved programmatic

 

Oku: When designing media, four elements are said to be crucial: "mood," "scene," "location," and "time." Mood refers to whether the ad recipient is in a high-energy state or feeling a bit down. Scene is the surrounding situation – whether the atmosphere around them is lively or calm. Location and time need no explanation.

These four elements have been discussed for a long time, but they remain highly relevant today. Controlling these elements is precisely what mass media can do. I think incorporating the benefits of operational flexibility into mass media is a valid approach. For example, in TV advertising, you could prepare four patterns of content (A/B/C/D) for a given slot and switch them out at the last minute based on factors like weather or daily fluctuations. With digital, the actual switching isn't particularly difficult. The creative would be properly vetted beforehand. It's essentially a pre-approved programmatic approach. I believe this technique would also enhance the overall power of the advertising.

Uemura: This is something that's existed in other businesses for a long time. Take baseball stadiums: they sell annual season tickets through a reservation model first, then sell any unsold seats on a day-of basis, or through operational sales. Hotels take advance reservations and sell any vacant rooms on the day. Ultimately, businesses selling slots have always done the same thing.

TV hasn't done this yet, but it's an interesting approach that could create added value – a hybrid between reservation-based and operational models. It works for both spot and time slots. The internet industry tends to get swept up in technological trends and rush to one extreme or the other. But for both sellers and buyers, it's fundamentally about balance. Strategically using both approaches effectively is key. By clearly identifying the true purpose of advertising and understanding advertising psychology, we can avoid being swayed by trends and find methods that meet the client's needs.

Oku: Adding another point to the issues with performance-based advertising Mr. Uemura mentioned earlier, when buying and selling ads based on "attributes," there's the problem of targeting. Ideally, targeting would be rock-solid, but in reality, it's surprisingly common for the decision-maker holding the purse strings to be outside the target group. For example, even with products aimed at men, the wife might hold the purchasing power. Furthermore, there are cases where simple attributes don't cut it. You might have a target group living in a specific area who are internationally active, or targets defined by entirely different contexts. The question is how far this kind of application can realistically go.

Uemura: So, while programmatic allows pinpoint targeting, there are times when you need something more fuzzy, not pinpoint.

Oku: Targeting precisely like laser beam is good, but there might be other decision-makers around them too. Ultimately, it's a matter of balance, isn't it?

Uemura: Online, we're looking at historical data. But even if someone has frequently viewed car pages over the past three weeks, they might have already made the purchase. You can't simply predict the future based solely on past data.

Oku: Even when adopting new advertising methods, it seems both the media side and those involved in advertising communication business need to focus more on wisdom, not just technology.