Can Digital Marketing Truly Become "People-Centered"?

Dentsu Digital Inc. launched 'People Driven Marketing' (PDM) in 2017, a marketing approach centered on 'people.' How will marketing evolve with PDM 2.0, which focuses on people's "consciousness" and "behavior," and the upcoming 3.0 version launching this fall? Joined by Transcosmos CMO Shunsuke Sato, Dentsu Digital Inc. President and CEO Yoshihisa Suzuki exchanged views on the present and future of digital marketing.

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The Era of Digital Marketing Pursuing Results

Suzuki: I've met Mr. Sato several times at marketing industry gatherings, but this is our first proper conversation. When discussing digital marketing, I'd like to start by explaining why Dentsu Inc. established Dentsu Digital Inc.

Dentsu Inc. has long been a top runner, demonstrating its presence primarily through advertising. But honestly, we've been playing catch-up in the digital realm. There's also the reality that advertising has become just "one of them" in marketing.

Unable to land a job in advertising, I ended up in the internet industry.

Sato: Actually, Dentsu Inc. was my top choice during job hunting. I wanted to do advertising and marketing, but I was rejected without much fuss (laughs).

So, I ended up joining an internet company right out of college, and that's where my career in the digital world began.

Suzuki: That just shows the interviewers didn't have the foresight (laughs). Now, Sato-san is a driving force in the digital marketing industry.

Sato: As Suzuki-san says, advertising is undergoing major changes now. With the spread of SNS, the power of traditional mass advertising has relatively diminished.

Back when I wanted to join Dentsu Inc., everyone talked about which TV commercials featured which celebrities. But as devices became personal and information diversified, it's become tough for mass push advertising, like TV commercials, to capture customers' hearts anymore.

Meanwhile, real-time, performance-based online advertising—which optimizes ad placements, bid amounts, and targeting—has seen significant automation through platforms. It's already becoming difficult for advertising agencies to profit solely from selling ad space.

MaaS and Subscriptions Trigger Digital Transformation

Suzuki: Amidst these major shifts, Dentsu Digital Inc. was born to establish a competitive edge in the digital domains Dentsu Inc. couldn't fully cover.

Over the past two to three months, I've sensed a remarkably rapid shift in the digitalization of Japanese companies. This is because digital technology is fundamentally updating the very nature of products and services.

Prime examples include "MaaS (Mobility as a Service)," which treats transportation as a service, and "subscriptions," where products or services are purchased for a fixed price on a regular basis.

To survive amid this change, merely producing existing goods and services is no longer sufficient. We anticipate that companies will increasingly accelerate their transformation into service providers and digital platform operators.

All data, while strictly adhering to compliance and privacy policies, will be integrated asinformative data (*). Through data utilization, the probability of success and the algorithms driving it will become increasingly clear and visible.

With the dawn of the Reiwa era, this digital transformation is accelerating rapidly. Here, speed will determine the outcome.

※Informative data = Information related to individuals, such as internet usage logs, that cannot identify a specific individual

 

Companies hold their own data across departments—marketing, sales promotion, manufacturing, and management dashboards. However, data remains siloed and passed between departments like a baton. By accumulating and integrating this data, companies can potentially accelerate their operations.

For example, when customer trends shift and production adjustments become necessary, management decisions are required. Previously, such decisions could only be made after sequentially passing the baton from each department. With integrated data, management decisions can be made instantly. Achieving this speed is digital transformation, and digital transformation itself is the condition for survival.

Globally, Chinese companies like Alibaba and Tencent have already launched services integrating marketing and systems. Domestically, the rapid increase in companies adopting solutions from Adobe Systems and Salesforce is also noteworthy.

How to Connect the Physical and Digital Worlds

Sato: It's crucial for the entire company to change, not just the marketing department, right?

However, large corporations face the challenge of slow change. As an outsourcer, transcosmos integrates the data accumulated by companies end-to-end. We drive our business as a digital transformation partner essential for the transformation of large corporations.

For example, Transcosmos has strengths in call center outsourcing. Traditionally, call centers were seen as a "cost-only support" model where expenses were incurred. While call center data might be used for operational improvements, the concept of leveraging it for marketing simply didn't exist.

However, with the proliferation of smartphones, customer support now involves multiple touchpoints beyond phone calls—messaging apps, social media, and more. While this data is digitally accumulated, there remains almost no connection to marketing, leaving it fragmented.

Even when companies try to bridge this gap, the siloed structures typical of large corporations act as barriers. To break through this, Transcosmos launched "DEC" (Digital Marketing, E-commerce, Contact Center) three years ago. This service provides comprehensive support spanning from customer support to marketing. Furthermore, by seamlessly connecting the physical world with data, DEC enables "winning" digital marketing.

Individuals now possess multiple devices, and the information they access has diversified. The challenge lies in collecting data that advertising alone cannot capture. Support data, communication data, and e-commerce purchase histories all hold future potential. Furthermore, how to connect data acquired digitally to the physical world will become a major theme going forward.

To achieve this, I believe we must prioritize content, listen more closely to consumer voices, and provide customers with new experiences.

Why the Cashless War is Heating Up

Suzuki: It's true that in the past, creating content for a powerful medium like television would capture everyone's attention. But today, values, channels, media, and lifestyles are completely different and diverse for each individual.

It's no longer enough to rely solely on television; you must align with each individual's specific situation at that moment to move their "emotions" or trigger "action."

I believe the ultimate winners will be those who can acquire and understand this individual context as data.

Sato: We're now at a stage where we can gather substantial one-to-one data digitally. The next step is how well we can connect that to real-world data. This requires creating new customer experiences.

Uber is a successful example of connecting real-world data with the internet. Acquiring real-world data through a new mobility experience led to Uber's success.

The reason the "cashless war" is heating up so intensely is precisely because the real-world purchase data obtained through the new customer experience of cashless payments is considered to hold immense value.

Once you have real-world data, connecting it to online data is what finally reveals a person's true profile.

"People-Centric" Marketing That Stands by People

Suzuki: Since last year, the Dentsu Group has been advancing a digital transformation initiative called PDM 2.0.

We believe that beyond the evolution of digital marketing lies marketing that truly connects with people.

Suzuki: No matter how much digital marketing evolves, it ultimately comes down to "people." PDM, with its "human-centric" approach, conceptualizes this methodology.

The Dentsu Group has always been a company skilled in communication. It is our conviction that what moves people's hearts and inspires them can only be created by people, not by AI or robots.

This fall, we're launching the further evolved PDM 3.0. PDM 3.0 identifies more critical customer profiles and manages both CRM (Customer Relationship Management) and advertising. By strengthening partnerships with companies like Transcosmos, Adobe Systems, and Salesforce, we maximize the use of corporate data.

One such initiative is the "Dual Funnel Solution" provided by the Dentsu Group. This system simultaneously achieves "new customer acquisition" and "existing customer nurturing."

Gaining Passionate Fans Through "Emotional Connection"

Sato: In future marketing, creating "passionate fans" is the key word. The "Dual Funnel Solution" defines this as cultivating loyal customers.

In Japan, where the population is declining, it's essential to increase touchpoints with each individual customer to turn them into loyal customers. The ideal scenario is for one person to purchase all the products and services offered by that company.

For example, if brands like LVMH or Netflix, which have passionate fans, launched a car, their fans might buy it. The game is won by how many such powerful fans you can acquire.

However, with current mass advertising, it's realistically difficult to turn people into such ardent fans solely through that approach. The only way forward is to cultivate fans by providing personalized customer experiences—tailored content and benefits—leveraging digital tools.

I believe Japanese marketing companies should focus their efforts on developing strategies for this purpose going forward.

Suzuki: Time, meaning the number of touchpoints with people, also becomes crucial. How do we capture that limited 24-hour window? We must consider how to attract these finite resources – "people" and "time" – to our services. This will lead to unprecedented, innovative, and rich customer experiences.

Sato: Just as foreign companies continuously release competing services, it's possible to follow precedents when developing services. That's precisely why building a strong fan community centered on customers and users is paramount. That becomes the brand.

Furthermore, while digital marketing facilitates communication, it also carries the risk of appearing cheap. To cultivate strong fans, strategic communication design encompassing this aspect is essential.

Suzuki: We aim to pursue lifetime value, ensuring customers remain loyal fans. To achieve this, we need every customer experience to be truly memorable.

What should we be offering customers five or ten years from now? We want to constantly think about that aspect while driving innovation.

Traditional marketing focused heavily on planning, but our goal encompasses building digital marketing systems, their operation, improvement, and ultimately delivering results. We aim to realize society's digital transformation by collaborating with various companies.

(Production: NewsPicks Brand Design / Editing: Momoko Hisakawa / Photography: Junya Inagaki / Design: Yosuke Kuki)