The Journal The Authority on Global Business in Japan

Yomiuri3Susumu Sasaki, Yomiuri IS executive president and CEO, is on a business quest: introducing the traditional Japanese advertising medium of newspaper inserts as a marketing solution for international companies operating in Japan.

Yomiuri2Perhaps hardly known to Western readers, newspaper inserts remain an essential communication strategy in modern-day Japan, and Yomiuri IS maintains the leading position in the field.

The inserts are added to newspapers immediately prior to delivery, and are not the special sections often seen in weekend newspapers in the English-speaking world.

Inserts started life as circulars distributed door-to-door in the Edo period in 17th century Japan, even before newspapers were printed. The first notable example of this form of advertising is said to have been distributed as long ago as 1683 by Echigoya—the predecessor of modern-day Mitsukoshi department store.

The inserts were first added to newspapers in the 1920s, in line with the development of home delivery services, following the rapid diffusion of newspapers at the start of the Meiji era in 1868.

Anyone who has seen the inserts will realize that they often differ from the paper itself in size, color or paper type and, because of this, offer advertisers a distinctive medium through which to market their products. Newspaper circulation in Japan remains high, and that makes inserts an effective advertising tool.

“Newspaper inserts are unique to Japan; I don’t believe they exist in the US or Europe,” Sasaki says. “Thanks to the rise of newspaper home delivery systems, it is now possible to reach approximately 40 million households, or 70 to 80 percent of all Japanese families in their living rooms, in just two to three hours each morning.”

Yomiuri IS offers an exclusive platform of integrated lifestyle communication that Sasaki is confident cannot be duplicated by competitors that concentrate on existing mass-media approaches to consumers.

“We aim to offer a new consumer-oriented communication service that is different to that of our competitors,” Sasaki says. “I really believe we are the only company that can offer this type of service.”

Yomiuri IS aspires to understand the perspective of its female audience, including the housewives that control the household budget, by offering information from local businesses, such as supermarkets, cram schools for children, and real estate agents.

In 2006, the company launched “Women, insight into the Essence” (WisE), a dedicated research group designed to analyze specific insights of Japanese women. The group conducts large-scale surveys of women in the 15 to 69 age group, and categorizes the female market according to the “life course” group reactions of demographic sectors to the market.

Data is also gathered from analysis of products, media and advertising. As such, WisE data makes it possible to scrutinize the market from the standpoint of the consumer, and is not merely a tool for product- or company-driven market research.

WisE employs an extensive marketing database and Yomiuri IS has developed a Life Course Marketing Model that applies this data in marketing activities from concept creation to target customer touch points.

“One of our major sales points is that we understand female purchasing psychology better than any other advertising company in Japan,” Sasaki says.

Yomiuri IS deals with some of the biggest names in the retail business, such as the mass merchandiser Yamada Denki, apparel specialty store operator Uniqlo, a major retailer, as well as Nitori and IKEA, both interior design companies.

These businesses, in turn, are seeking more granular marketing solutions, and look to Sasaki’s company to provide them with strategic inroads into the Japanese consumer market.

Among the direct marketing solutions being offered are the design and management of key performance indicators, and product and company branding that go beyond the original role of newspaper inserts as community-based media offering mainly consumer and lifestyle information.

Yomiuri IS now helps advertisers expand market share through mixed-media solutions, such as tie-ups between direct marketing using flyers and TV, or the Internet, including smartphones.

In particular, TV-based recommendations to “watch out for tomorrow’s newspaper inserts” have boosted sales for many advertisers, Sasaki says.

“It is possible to boost response rates by a multiple of two or three when employing mixed media compared to cases where each medium is used in isolation,” he explains.

In a further move toward developing hybrid solutions, Sasaki also highlights how Yomiuri IS is reaping the benefits of the interaction of mobile phones and magazines.

Mobile phones are playing a larger role in ad campaigns aimed at younger people, and Sasaki points to a magazine ad placed by Uniqlo that uses augmented reality, a technology that overlays digital information on an image viewed with a device such as a cellphone.

“The photo moves when viewed with a mobile phone, and this initiative has developed a really good reputation,” he says. “Strategically combining inserts with the Internet or smartphones can help our clients effectively solve their communications challenges.”

Sasaki and his staff of approximately 400 people have also capitalized on scientific techniques to develop a specialized database that mines national census data to create a targeting tool.

By taking each of Japan’s 180,000 townships and using generally available zip codes, Yomiuri IS has broken down zip code areas by demographic characteristics referred to as “Resident Characters.”

For example, the characteristic feature of one area may be described as residential in nature, on a railway line with good commuting access to central Tokyo, and comprising a high ratio of single-person households.

Or, the feature of another might be a high ratio of residents of 50 years of age and above, and couples living in large single-family homes in suburbs with numerous family-based households.

This allows retailers to promote products and services that target specific consumer needs in a given area, and extract sales potential without unnecessary efforts in areas where the target customer is unlikely to reside.

If there is one thing that can be said of most locales in Japan, it is that they are facing an aging population. Forecasts for a lower overall Japanese population in the future, and the likelihood of shrinking markets, mean the way forward is through deeper involvement with international companies, Sasaki believes.

To this end, Yomiuri IS is looking to work with companies involved in business-to-consumer-type solutions where newspaper inserts can be optimized.

“If you are involved in [business-to-consumer solutions], Yomiuri IS is the best partner for you,” Sasaki says.

“We can offer inroads to 40 million of Japan’s 50 million households and maintain granular information on households in the 180,000 townships throughout the country. Bring us your marketing challenges, and we will offer you solutions.”

Newspaper inserts come in a variety of unique shapes and designs.

Newspaper inserts come in a variety of unique shapes and designs.