Eisuke Okamoto of Hakuhodo’s D.A. Consortium Inc. -- The Jay Sears Interview

This is the third and final installment in our series on “Programmatic in Japan” with leading buyers. The “Programmatic in Japan” conversations will continue at the Rubicon Project Marketplace Summit at the ANA Intercontinental Hotel in Tokyo, Japan on Friday, September 19, 2014. Guests interested in attending must contact Tomoyuki Ikeda tikeda@rubiconproject.com.

Your Name: Eisuke Okamoto

Your Company: D.A. Consortium Inc.

Your Title: Manager

SEARS : Where do you read your daily news?

OKAMOTO: I subscribe to the Nikkei newspaper and read it every day. I also use a curation smartphone app during my commute and spare time for the latest news updates. I rarely listen to the radio.

SEARS : Today on average across Japan -- out of each $1.00 spent on media (all media, not just digital) by one of your advertisers -- how much today is spent on automated or programmatic channels?

OKAMOTO: It is said that RTB ad spend has exceeded 40 billion JPY out of 5.97 trillion JPY whole media ad spend in 2013. Although the concrete number is vague, if we were to include other method besides RTB (e.g. Automation or Programmatic direct), the total amount spent on the channel is steadily growing.

SEARS: What was this number in 2012?

OKAMOTO: RTB has grown at a rate of 150% since 2012 and programmatic channel is expected to be more than that.

SEARS: What will this number be in 2016?

OKAMOTO: [We’re] uncertain of a concrete figure -- but it is expected to grow in 2016 led by mobile.

SEARS : What is the mission statement of D.A. Consortium?

OKAMOTO: To accomplish the KPI set for each client.

SEARS : Please tell us:

SEARS: Percentage increase, managed budget (media spend) 2013 vs. expected 2014 across Japan:

OKAMOTO:Expected to be around 120% growth.

SEARS: How many employees are there in your Japanese organization that work on advertising automation or programmatic?

OKAMOTO: Total across Japan: Approximately 50 employees.

SEARS : What are D.A. Consortium’s three biggest initiatives in Japan in 2014?

OKAMOTO:

1. Data. DAC would utilize its holding data by introducing its DMP: AudienceOne® for both ad agencies and publishers in order to add value to online ads.
2. Video. DAC develops a new Video ad format by co-working with publishers and contributes to expanding the online ad market.
3. Mobile. The percentage of DAC’s sales for smart device ads increases quarter by quarter among its total sales and we continuously concentrate on mobile market.

SEARS : By 2016, what percentage of your holding company’sJapanese media spend will be automated or programmatic?

OKAMOTO: Among DAC’s total sales in FY2013 ended March 2014, around 50% was programmatic ad sales. We estimate the percentage will be increased by 2016.

SEARS : In your view, how advanced is the Japanese market with respect to advertising automation and programmatic compared to other leading advertising markets in the world? What markets does Japan look at for best practices? What is unique about the Japanese market?

OKAMOTO: We generally look at the US market for best practices. Major US ad tech vendors are seeking business opportunities and entering the Japan market. Advertisers, agencies and publishers are keen to it and well-educated. So if I were to speak about the maturity of the market, I’d say “only few steps behind.” The uniqueness of the Japan market is that the client tends to demand a detailed and discreet operation as compared to the US.

SEARS : On the subject of business models, the best way to describe your trading desk [or automated advertising division or effort] is [Please choose one letter choice and explain in 1-2 sentences]:

a) Product organization – i.e. you curate a media product for your agencies and advertisers
b) Service organization – i.e. you recommend and manage best practices and best of breed products for your agencies and advertisers
c) Combination of both
d) Other

OKAMOTO: B. We consult and recommend upon a platform that suits the client’s set of KPI.

SEARS : What percentage of your agency or advertiser’s site direct budget (direct orders) has been automated?

a) Less than 10% (of site direct dollars)
b) 11-20%
c) 21-50%
d) Over 50%

OKAMOTO: A. At DAC, we currently offer PEX service through our programmatic platform. But the number or portion is still relatively low at this moment.

SEARS : Which of the following will accelerate the automation of your site direct (direct orders) budget? Pick all that apply.

a) Dynamic access to all publisher inventory [vs. just “remnant” or “auction”]
b) Ability to leverage publisher first party data
c) Ability to leverage advertiser first party data [against all publisher inventory, especially premium]
d) Availability of rich media, expandable units and larger IAB Rising Star formats
e) Ability to more easily curate audiences for specific advertisers across the premium content of multiple publishers
f) All of the above

OKAMOTO:

a) No
b) Yes
c) Yes
d) No
e) Yes
f) No

The crucial point to accelerate the automation depends on whether the market acknowledges media trading via DMP and data business.

SEARS: Tell us a bit more about you.

SEARS : Money is not a concern. You no longer work in advertising or technology. What would you choose to do for work?

ANSWER : To promote Latin culture and music in Japan.

SEARS : What is your favorite restaurant in the entire world?

ANSWER : Every Japanese food restaurant is the best in the World.

Thanks, Eisuke-san!

Jay Sears is Senior Vice President, Marketplace Development for the Rubicon Project. Sears workswith leadership and business unit heads across the company to expand Rubicon Project’s potential market. Sears has also served as General Manager, REVV Buyer, where he was responsible for global relations with the buy side including ad holding companies, ad agencies, agency trading desks and demand side platforms headquartered in North America. Jay can be reached at jsears@rubiconproject.com.

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