Becoming the No. 1 Partner in Sales Promotion Solutions ~ What DENTSU PROMOTION PLUS INC. Aims For ~

On April 1, 2022, Dentsu Tech Inc. was reborn as DENTSU PROMOTION PLUS INC.

We asked Masaaki Yukawa, President and Representative Director, about the goals of this new company and the value it aims to deliver to client companies. The company offers a rich lineup of solutions, including retail DX promotion, commerce support, digital innovation for campaigns, design and operation of owned media and SNS, and creation of new brand experience opportunities using technology.

What DENTSU PROMOTION PLUS INC. Aims to Achieve

Regarding the launch of DENTSU PROMOTION PLUS INC., the press release states: "We aim to evolve into a company that strengthens services in rapidly changing areas like retail and commerce, providing high-value-added solution services to clients in the sales promotion domain." Could you clarify the objectives and business scope of this new company?

Yukawa: We are developing our business with the goal of becoming the No. 1 partner for our client companies in the sales promotion solutions domain. In advancing our business, we believe it is crucial to continually consider what exactly the "sales promotion solutions domain" entails, what services we should provide, and what our ultimate goal is.

The categories of "sales promotion" and "promotion" have always existed. This domain is about "creating happy encounters between consumers and products or companies," but it's also a "market anyone can enter." For example, if a mobile carrier starts distributing coupons to its own users, it becomes a "sales promotion player."QR code payments might have been considered "financial players" when they first appeared, but once they started offering "X% off with QR code payment," they became "promotional players."

Furthermore, since "promotion" always unfolds at the "direct touchpoint with consumers," if technological evolution changes consumers, alters lifestyles, and even transforms how goods are purchased, then the "promotional solutions" deployed there should constantly evolve as well.

The decisive turning point, I believe, is that the evolution of the digital environment has made it possible to visualize the causal relationships between solutions and their effects or outcomes, creating an environment where long-term strategies and improvement measures can be proposed. Consequently, alongside "creating happy encounters between consumers and products or companies," "building lasting relationships that foster continued engagement" has become more important than ever.

Amidst the proliferation of various platforms, digital solutions, and analytics tools, we often hear questions about what to utilize and how. It is precisely within this complex environment that the significance of the Dentsu Group and our company lies.Corporate marketing activities are composed of numerous elements, and often cannot be completed by relying on a single platform or isolated measure. The Dentsu Group's strength lies in its ability to perform integrated data analysis across both approaches: advertising strategies for attracting customers and building awareness using multiple media like television and digital, and diverse sales promotion approaches.Furthermore, by analyzing the environment to identify the optimal approach, establishing actionable strategies and systems, and continuously improving alongside our clients, we aim to deliver concrete "results and impact." We believe our role as a partner is to consistently build a track record of contributing to our clients' business success. This is why we strive to be the "No. 1 Partner in Sales Promotion Solutions."

How have we evolved from our predecessor company, Dentsu Inc. Tech?

Q. Compared to the predecessor company, Dentsu Tech, what aspects do you feel have been particularly strengthened by becoming "DENTSU PROMOTION PLUS INC."?

Yukawa: While collaboration with other Dentsu Group companies is fundamental, the most significant enhancement is our ability to respond more robustly to the accelerating digitalization of consumers' lives.

Previously, Dentsu Inc. Tech primarily focused on "providing products and services to client companies and supporting them through to the end of a campaign." However, digitalization has enabled real-time analysis and planning, increasing the need for services like "mid-campaign improvements" and "post-campaign relationship strengthening."Moving forward, the execution capability to devise innovative approaches to consumers using the broad creativity unique to the Dentsu Group, generate analysis and improvement plans from integrated data, and then implement and operate them will be increasingly demanded. Furthermore, I believe that having a collaborative structure capable of delivering these at competitive quality and cost will be an essential condition for being chosen by clients.

Therefore, our group has established a new company, DENTSU PROMOTION EXE INC., by integrating Dentsu Customer Access Center Inc. and Dentsu On-Demand Graphic Inc. This new company will demonstrate execution capabilities spanning digital production to customer service. Working in strong partnership with it, we at DENTSU PROMOTION PLUS INC. will handle the overall design, planning, and production of customer experiences within the sales promotion domain.This combination of "planning and design capabilities" and "execution capabilities" enables us to fully commit to digital transformation.

"Sales Promotion" encompasses everything related to customer purchasing behavior

Q. Previously, when discussing "promotion" or "sales promotion," there was a tendency to view it as BTL (Below the Line = events, direct mail, etc., outside ATL = Above the Line = primarily mass media like TV and newspapers).In other words, it often felt like just "one part" of advertising marketing or a "receptacle for mass advertising." However, listening to you, Mr. Yukawa, I get the sense you view "sales promotion" as encompassing "all areas related to consumers' purchasing behavior." Is that correct?

Yukawa: The surrounding areas that lead consumers to purchase are broad and deep, involving many intertwined elements. While it's important to have optimal strategies that can address all of these areas, it's not something easily achieved.

I once had a conversation with an executive at a client company who pointed out: "Dentsu Inc. tells us, 'Tell us anything!' But from our perspective, constantly chasing variables and struggling to optimize daily, this 'Tell us anything' feels like a rather arrogant statement." I think they're absolutely right.

As a company in the "promotional marketing domain," I believe our goal should be to continuously generate solutions that "contribute to sales by strengthening engagement with consumers and delivering value-added initiatives," starting from the "results of promotional campaigns."When our scope is supporting our clients' business growth, we must not limit ourselves to just the "final push" in consumers' purchasing decisions. We must always keep purchasing at the center, constantly thinking about everything from "how to attract customers" to "how to get customers who have already purchased to buy again/buy more."Given the current reality where "purchase data and consumer data related to purchasing" are increasingly visualized in real time, from the perspective of aiming for a service that "commits to outcomes and results," I also believe we should clarify the causal relationship with upstream initiatives and target the optimal approach to customer acquisition and creativity itself, aiming to improve results and outcomes.

Q. The promotional field is highly competitive with many players. What strengths do you believe DENTSU PROMOTION PLUS INC. can leverage within this landscape?

Yukawa: While digital promotion, directly linked to results and effectiveness, will continue to evolve due to digitalization, our group's strength lies in possessing expertise in both digital and real-world approaches. We can propose optimization from a multitude of strategies tailored to each client's business objectives and products, and we have the capability to continuously improve these strategies by working alongside them. Of course, there are still areas where our capabilities need strengthening, but we are working to organize the necessary functions and establish these capabilities.

Dentsu Group is positioned to collaborate with all players, providing integrated data analysis and optimal planning and approaches.This ability to broadly encompass data and capabilities and translate them into action—though it may sound like a cliché—is precisely the "comprehensive strength" of DJN (Dentsu Japan Network). Precisely because consumer behavior is changing dramatically and the range of services is diversifying, the Dentsu Group must leverage its comprehensive strength to analyze the elements surrounding consumers. Our company must then consider optimization from a multitude of strategies and continue to evolve. I feel this cannot be achieved without comprehensive strength.

We in the Promotion Group always want to be challengers.While Dentsu Inc. is a competitive company in comprehensive advertising-related businesses and sponsorship areas like sports and content, as mentioned at the outset, the "promotional field" is not one where the Dentsu Group has a solid foothold. It's a chaotic landscape where new players, tools, and initiatives emerge daily. In such a market, the reality that we can "prepare the optimal and feasible initiatives backed by evidence from among the myriad available options" becomes a powerful weapon.

Within the vast world of sales promotion solutions, we possess an integrated data platform developed through extensive collaboration with Dentsu Group companies. This platform enables effective integrated marketing communication (IMC). By leveraging this capability to deliver results through a parallel approach, we can continuously support better touchpoints between client companies and consumers. Now is the time to raise our presence by engaging the entire group to become the No. 1 partner for our client companies."Easier said than done" – this is indeed an immensely challenging endeavor.

This necessitates fundamental structural reform. Some have pointed out the challenge: can we truly achieve this by merely changing names and splitting companies, transcending past legacies, relationships, and employee mindsets? Yet, this is a reform we must undertake. I have confidence in our employees' capabilities and approach this reform with high expectations. I am a "clueless newcomer" in this field, so I'll charge ahead with the fresh perspective of a young person (laugh).

What exactly is "sales promotion"? Mr. Yukawa defines it as "everything involved in selling goods and services to customers." In the diverse world of sales promotion solutions, with its varied players, approaches, and strategies, starting simply with "how to get customers to buy" might actually be crucial.We often tend to start by thinking about the approach—like "Let's offer coupons on XX" or "Let's use targeted approaches." But if we step back and look at the whole picture with the simple perspective of "building long-term relationships and encouraging continued purchases," a whole new range of possibilities opens up.