Leveraging satellite data as the foundation for future marketing. The new world created by space business.

The Japan Aerospace Exploration Agency (JAXA) and Dentsu Group Inc.issued a joint release on July 1, 2022, announcing their collaboration to advance new initiatives.

In this article, we interviewed Wataru Kishimoto, the Dentsu Group member leading this collaborative project. We delved deeper into the specifics of the collaboration, which are not readily apparent from the press release alone, and explored the goals they envision for the future. We will share the potential outcomes emerging from this "JAXA and Dentsu Group" partnership.

Satellite imagery enhances the accuracy of demand and supply forecasting

Q. The recently announced release states, "Dentsu Group Inc. and the Japan Aerospace Exploration Agency (JAXA) have commenced co-creation activities aimed at creating demand and optimizing supply and demand through the advancement of advertising utilizing satellite data." However, even hearing "Dentsu Group and JAXA are collaborating," many people probably can't quite picture what exactly they will be doing. Could you explain again what kind of initiative you are challenging yourselves with?

Kishimoto: To put it simply, the core challenge that sparked this initiative was: "We want to air seasoning commercials at just the right moment." We knew from experience that sales of that particular seasoning surge significantly when leafy vegetable market prices drop. So, the idea was to predict leafy vegetable price fluctuations and time the seasoning commercials accordingly. However, leafy vegetables experience volatile price swings, and their supply volume is also difficult to predict. When supply increases, prices drop, so identifying the timing when "market supply is about to increase" is key. While exploring solutions, we learned that "satellite imagery data can reveal vegetable growth conditions." This led to JAXA's cooperation, and our challenge began: leveraging satellite data to enhance the accuracy of supply and demand forecasts and apply this insight to marketing.

Q. Where did you learn that JAXA satellite imagery could be used for leafy vegetable price forecasting?

Kishimoto: Within Dentsu Inc., there's a team called the "Space Lab." I happened to see information they published that included "Examples of Satellite Image Utilization." Among the examples were things like "Looking at field images reveals the optimal harvest timing" and "The wavelength of light can indicate whether nutrients are accumulating in rice ears or tea leaves." In other words, there was information suggesting "Collaboration with the agritech (*) field is advancing." That made me wonder if we could determine the harvest timing for leafy greens. I inquired, and it seemed feasible, so we proceeded with discussions. I feel this kind of information is something only Dentsu Inc. can access.

Improving daily prediction accuracy enables dynamic marketing and a "better society"

Q. Utilizing advanced supply and demand forecasting to tailor advertising campaigns could enable highly efficient marketing for companies. However, it feels like an initiative too valuable to dismiss simply as "improving advertising efficiency."

Kishimoto: This might be my personal view, but I feel the way we do "marketing" is changing significantly as times evolve. In the past, marketing involved "planning" at a specific point in time, executing that plan as scheduled, then evaluating its success or failure after a set period before beginning planning for the next cycle. Work progressed in these fixed cycles. Now, however, diverse data flows in real-time, making marketing dynamic. Building a "marketing foundation" for such an era has been a personal goal of mine.

For example, consider the fact that "ice cream sales increase when temperatures rise." Previously, within the context of "concentrating marketing resources during summer," the pattern was to plan in advance—"What kind of campaign should we run next summer?"—and then execute that plan during the summer. In contrast, dynamically executing marketing means that, rather than focusing on "summer," we can predict with reasonable accuracy when temperatures will start rising (e.g., "around the Xth of Y month") or that a week of cooler days is coming. Based on this, we can adjust production systems, plan distribution, organize in-store events, and synchronize all corporate activities accordingly. Today, by linking the various data companies possess, this kind of highly accurate, dynamic marketing is possible.

This approach is actually already commonplace in the world of stock prices. Whereas the old style involved predicting stock prices by studying publications like the Company Quarterly Report, today's approach incorporates that information alongside real-time monitoring of social media trends to inform daily stock price forecasts. In other words, as technology advances to gather diverse data and as AI-like brains capable of instant analysis become available, we are entering an era where "optimization" evolves daily. We believe the marketing foundation we are challenging ourselves to build is one such pillar for this evolution.

Of course, realizing this requires advanced computational systems like quantum computers and the utilization of AI. Therefore, we must simultaneously advance "evolving the brain" by gathering and linking data, thereby developing marketing. We view this collaboration with JAXA as a flagship initiative for that purpose.

Risk avoidance is a critical theme for all companies. This means avoiding situations like "producing a lot but not selling" or "spending marketing costs but not selling." If we can predict future risks as accurately and instantly as possible and avoid them, it will undoubtedly support our client companies. Above all, if such efforts lead to a solid match between supply and demand, it will benefit society, for example, by reducing food waste.

Of course, even if a "marketing plan" exists, it's meaningless without the capability to execute it. For instance, even if daily forecasts are possible, can you adjust your commercial placement plan accordingly? This is precisely the challenge we must tackle. Since commercial buying involves various processes, we need to innovate the buying system while collaborating with media partners. Conversely, this is an area where we have particular strengths, so we are pioneering and actively pursuing it.

How will business evolve through the power of future forecasting?

Q. I see. If, as you say, Kishimoto-san, a "dynamic marketing foundation" is crucial, then the advertising field also needs to evolve to enable "dynamic" implementation. If that happens, perhaps media businesses themselves will evolve too. What is your vision for the future of the media business?

Kishimoto: By collecting diverse data and analyzing it in an interconnected way, the accuracy of future predictions improves. I believe this will undoubtedly bring positive outcomes for the media business as well.

For example, one of our services is called "SHAREST." It's an AI-powered viewership prediction system originally developed for advertisers to improve the accuracy of viewership forecasts and achieve advertising results aligned with their expectations. However, if this system improves viewership prediction accuracy and reveals "what factors influence viewership," it should actually become valuable information for TV program production teams as well. This means getting closer to understanding "what viewers actually want," which ultimately leads to improving content quality. Of course, what viewers want varies by generation, time of day, and even recent events. By truly grasping these nuances, we believe we can serve as a bridge, helping build a positive relationship between consumers and media.

Traditionally, "marketing" might have been seen merely as "allocating resources for sales promotion during a specific period." However, if dynamic marketing centered on future forecasting becomes a reality, it will become a force that enhances the precision of all corporate activities, from development and production to delivery. Eliminating waste in corporate production activities will ultimately prevent enormous losses in society and enable the realization of a more advanced society.

It's also intriguing that such a large-scale endeavor starts with something as familiar as "seasonings." "Selling seasonings with the power of the universe." At first glance, the two seem unrelated, but connecting them reveals many possibilities. It may be precisely in everyday products and services that the opportunity for significant evolution through modern technology lies dormant. And surely, this could become a major force to change conventional wisdom. This interview made me realize the importance of re-examining what's right in front of us.

※ A portmanteau combining Agriculture and Technology. Initiatives aiming to solve agricultural challenges by leveraging technologies like AI, IoT, and robotics.