The Journey, Current State, and Future of Marketing DX at Dentsu Inc.

Dentsu Inc.'s people-centric marketing approach, "People Driven Marketing®," has now entered its fourth year and has significantly evolved as "PDM 4.0."

This series provides a digest report on the three-day "People Driven Marketing® Practical Webinar 2020," where Dentsu Inc. professionals and corporate guests discussed the future of marketing and data.

This installment introduces the session featuring Kumiko Nakatsu, Director at Dentsu Group. She discussed the overall vision of Marketing DX (Digital Transformation), a key focus for Dentsu Inc., covering its history, current initiatives, and future outlook.

※People Driven Marketing
https://www.dentsu.co.jp/business/pdm/
Dentsu Inc.'s proposed integrated marketing framework centered on "people" for the data & digital era. It reframes challenges from a people-centric perspective and integrates the Dentsu Group's cutting-edge marketing methodologies to support customers' sustainable growth.

 

※A special page for this webinar is also available on the problem-solving marketing information site "Do!Solutions". For a more detailed report, please visit here.

DX for Productivity Improvement vs. DX for Creating New Value

The keyword "DX" has become increasingly common in recent years. While various definitions appear in newspapers, books, and online, Mr. Nakatsu redefined DX at the outset.

Mr. Nakatsu states that DX can be defined in two distinct phases. The first is "solving business demands and challenges using ICT technology." The second is "going beyond solving challenges through ICT technology to transform the business model itself and provide new value."

While the former contributes to process efficiency and cost reduction, the latter brings about a complete overhaul of the entire process, including business strategy, business reform, and sometimes even the creation of new industrial structures.

"The Dentsu Group intends to focus on the second aspect going forward," stated Mr. Nakatsu. "We will leverage DX to create new customer experiences, increase customer numbers, strengthen engagement, and boost sales."

So, what exactly does Dentsu Inc. envision for Marketing DX? Before addressing that, Mr. Nakatsu briefly reviewed the history of DX.

Marketo's entry into Japan marked the true beginning of marketing DX

Mr. Nakatsu recalled, "While various customer experiences were already being digitized in the early 2000s, I don't recall the term 'digital marketing' existing yet."

The concepts that changed the game were "CRM" (Customer Relationship Management) and "LTV" (Lifetime Value). Both emphasize the importance of the "relationship" with the customer.

The emergence of these concepts led to a shift in marketing, where customers were segmented by stage (new/existing) and required customized, personalized approaches.

At the time, Japanese marketers handled communication segmentation manually. However, the landscape changed dramatically when Marketo entered the Japanese market in 2014. Marketing automation tools supporting "1-to-1" communication emerged, enabling faster and more accurate execution of increasingly complex digital marketing.

"This moment marked the true dawn of the Marketing DX era," recalls Mr. Nakatsu. Incidentally, Dentsu Inc. e-marketing One, the predecessor to Dentsu Digital Inc., was involved in establishing Marketo's Japanese subsidiary.

Dentsu Inc.'s move was to establish Dentsu Digital Inc. in 2016. It launched as a specialized organization aiming for integrated marketing through a dual funnel, combining data from both advertising and CRM domains.

"X-Stack" is Dentsu Digital Inc.'s solution that builds predictive models for business outcomes using AI and machine learning based on integrated online/offline data, thereby optimizing marketing initiatives.

Furthermore, across the entire Dentsu Group in Japan, we have expanded our service offerings beyond traditional advertising into areas such as new business and service development, formulation of overall marketing strategies, and customer success. This has enabled us to build a structure capable of addressing all aspects of business design.

"Each company has honed the areas necessary for marketing DX," explained Mr. Nakatsu, highlighting how the foundation for "Dentsu Inc. DX" has been cultivated across the entire group.

What are the three strengths of the Dentsu Group that overcome operational fragmentation?

While the technological environment and infrastructure for realizing Marketing DX were sufficiently in place, within the domestic Dentsu Group, operations were fragmented and individually optimized across each organization, leading to operational silos.

This prompted a large-scale organizational transformation. In 2020, the pure holding company Dentsu Group was established, adopting the message "Integrated Growth Solutions." It aims to integrate the diverse capabilities within the group and support clients' top-line growth beyond the marketing domain.

Furthermore, Mr. Nakatsu highlighted three strengths of the domestic Dentsu Group as key points for overcoming operational fragmentation.

Strength ① Data
We collect and integrate not only marketing data but various types of data. We continuously enhance the "resolution" of our customer insights by adding missing data and refining our understanding.

Furthermore, the "People Driven DMP," Japan's largest database in both volume and quality, which links Dentsu Inc.'s unique data such as web log data and TV viewing log data, continues to evolve daily.

Strength 2: Technology
Mastering various marketing tools and services provided by Adobe, Google, Salesforce, and others is essential in today's marketing landscape. The Dentsu Group in Japan boasts a cluster of expert companies in these technologies. We are proficient in all marketing cloud products and can offer diverse solutions tailored to client needs, including DMP/CDP and AI.

Strength 3: Creativity
What is demanded of Dentsu Inc. is to leverage data and technology to create new value. We will fully harness the creative DNA that has been passed down through the Dentsu Group to challenge the creation of new value through Marketing DX.

People-centric marketing extends to each individual working within companies

At the session's conclusion, Mr. Nakatsu discussed what Dentsu Inc. and its domestic and international Dentsu Group companies aim to achieve going forward.

"People Driven Marketing has evolved annually as an integrated marketing framework centered on 'people'. Going forward, we believe transformation centered not only on end-users but also on the employees working at client companies is necessary.

For example, Dentsu Digital Inc. provided remote customer support solutions during the pandemic. Clients who utilized these solutions reported that 'their connection with customers became stronger than before.' As a result, we succeeded in enhancing engagement between companies and customers even more than when meeting in person.

By focusing on how corporate employees work, we can also transform the customer experience. We want to actively pursue this kind of DX."

Mr. Nakatsu also highlighted "real-time marketing" as the ultimate form of personalization. "For instance, not just marketing, but manufacturing and back-office departments too—all corporate activities will synchronize and react in real time based on customer data. Technologically, we're now at the point where such a world is achievable," he stated.

"The universal power of marketing lies in moving people's hearts. We will continue to transform engagement between companies and customers, consistently contributing to our clients' growth," he stated, closing the session.

※For a more detailed report on this webinar, please visit the special feature page on "Do!Solutions"!