This is the second in a three-part 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 at tikeda@rubiconproject.com.

Your Name: Stephan Sawato Yoshii

Your Company: Xaxis (Japan)

Your Title: Country Manager

SEARS: Where do you read your daily news?

YOSHII: I read daily news from FT.com and Nikkei.com. Then I often watch Bloomberg TV and use social media like Facebook, WeChat and Line every day.

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 is spent on automated or programmatic channels?

YOSHII: Digital [vs. TV, etc.] is 20% of our total media budget. The [budget for] programmatic channels [is 30 % of our] digital budget. [That is 6% of our total] budget so far.

SEARS: What was this number in 2012?

YOSHII: Maybe $0.01 in 2012

SEARS: What will this number be in 2016?

YOSHII: [As a] guess, $0.20-$0.30

SEARS: What is the mission statement of Xaxis Japan?

YOSHII: We support clients to deliver [their] message to [their] target audience at the right time and right place based on multiple devices.

SEARS: Please tell us:

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

YOSHII: Over +100% increase

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

YOSHII: Total across Japan: two so far, but will add one or two [more].

SEARS: What are Xaxis Japan’s three biggest initiatives in Japan in 2014?

YOSHII: [Working with each of the following:]

1. Yahoo Premium DSP
2. Amazon DSP
3. Criteo are going to be acquired by Publicis Group

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

YOSHII: It is difficult to forecast, but my optimistic idea is that programmatic will share 25%-30%.

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?

YOSHII: We have a local DSP provider since 2010 and we have some best practices like Retargeting and Online Video with RTB. The traffic per user from Mobile Internet (smartphone and tablet) in Japan is No.1 in the world now. The traffic will increase 15 times by 2017.

SEARS: On the subject of business models, the best way to describe your trading desk or automated advertising division or effort is:

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) A combination of both
d) Other

YOSHII: B. We offer the Xaxis Media Product like Xaxis Audience for performance clients and Xaxis TV and Xaxis Response for Branding clients so far.

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%

YOSHII: Branding client is B, performance is C.

SEARS: Which of the following will accelerate the automation of site direct (direct orders) budget?

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

YOSHII: C.

SEARS: Tell us a bit more about you.

SEARS: Who was one of your first mentors as a child?

YOSHII: M.Yoshii, my father, because he taught me how to do business.

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

YOSHII: Open a café or bar near my house.

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

YOSHII: A Chinese restaurant in central Hong Kong called Yong Kei and a Grill Teppan Lounge at the Regent Hotel in Taipei called Robin’s.

SEARS: Thanks, Stephan-san!

Jay Sears is Senior Vice President, Marketplace Development for the Rubicon Project. Sears works with 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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