How Mitsui & Co plans to develop the nascent location programmatic data market in Japan

Most Japanese location data companies have their own DSPs that cannot be used on global programmatic buying platforms.

While there are several local Japanese companies offering data and technology at the moment in Japan, they operate as walled gardens, preventing valuable data and information from being taken outside.

The challenge lies in developing global partnerships with these players so data is accessible where and when it is needed. That is why Japanese general trading giant Mitsui & Co invested in location targeting platform Factual in November 2019.

Takuya Sugiyama, general manager of digital marketing and business development at Mitsui & Co tells The Drum that Mitsui’s recent focus has been on data businesses and creating partnerships with companies who use proprietary data sets in Japan.

“For example, we invested in Drawbridge, a cross-device data company, and connected them with customers in Japan until they were acquired by LinkedIn this year,” says Sugiyama.

“In continuing these efforts, we specifically chose Factual to pursue location data as our next category. Factual’s technology, resources, management and size of their business, have showcased that they will have success expanding into the Japanese market.”

He adds: “Most Japanese location data companies often focus on selling their data with their own demand-side platform (DSPs). However, Factual’s location data can be used on every programmatic ad buying and social media platform.”

While location data is not entirely new to the Japanese programmatic advertising market, it is still a nascent market because the market has not fully matured yet, explains Sugiyama. This is because most KPIs are focused on cost-per-click and cost-per-acquisition, which programmatic ads are not suited to.

He adds most Japanese location data companies have their own DSPs that cannot be used on global programmatic buying platforms. It is also difficult for agencies and clients to use “new” DSP platforms because most of their client’s budget is often allocated to their day-to-day primary platform.

“As a result, if clients use location data, a location-based targeting campaign would be isolated from their standard campaign. Location data tactics alone would not work well and clients don’t think about replacing them with their primary marketing platform,” Sugiyama explains.

“It takes a significant amount of time for most Japanese location data companies to build segments and share them with clients, as most audience segments are created manually. Factual has already developed and optimized these segments for the Japanese market.”

Mitsui & Co plans to drive adoption and usage of Factual’s products among Japan’s advertising agencies like Dentsu and Hakuhodo, as well as corporations, by focusing first on agencies and brands familiar with programmatic buying.

Following that, it will shift focus on corporations and agencies with programmatic platforms to evangelize the Japanese market and improve client awareness of location-based marketing and programmatic advertising.

It believes this is the right approach as Dentsu and Hakuhodo have a track record of adopting innovative technologies through partnerships and Factual can also rely on its global network of partners who have significant operations in Japan to drive adoption.

“Factual data can be used on global programmatic buying platforms and social media platforms like Twitter, Facebook and Instagram. Therefore, clients will not have to replace their primary marketing platform to use Factual, and they can use Factual’s location data to improve the ROI of their existing campaign tactics,” says Sugiyama.

“Ultimately, we believe that location data should be easier to use. Factual’s data integration process is significantly faster because there are fewer manual operation processes, and clients don’t need to sign a separate contract if they use Factual on their integrated platform.”

To drive adoption and usage, Mitsui & Co wants to highlight how the use of Factual helps companies to better understand and acquire new customers, measure the effectiveness of their investment in data, enrich their data offerings and improve the customer experience.

For example, it will showcase how an auto brand wanted to understand which competitive auto brands were also in the consideration set for their prospective customers. Footfall analysis via Factual Insights revealed that the competitive set varied by region. In some regions, prospective buyers were most likely to visit Tesla dealerships after visiting one of the brand’s dealers.

In other regions, shoppers were more likely to visit Toyota and Honda. The brand created custom Factual Audience segments to reach in-market shoppers and tailored their ad messaging to promote various models, depending on regional interest.

“With Factual’s audience segments, clients can use location data on their primary marketing platform including SNS. This helps them to target offline behavior and foot traffic, which cannot be captured by ordinary web-based targeting,” explains Sugiyama.

“Factual helps its customers see how many people visit their stores after engaging with their brand and seeing advertisements. These brands and agencies can also see which is the best audience segment contributing to store visits.”

He continues: “Factual‘s footfall measurement report can be checked on DSPs on a daily basis, which is helpful in optimizing and improving ROI of campaigns, enabling clients to allocate more budget to the most effective segments for store visits. By evaluating multiple audience segments with Factual’s location-based products, clients can better understand the types of customers that engage with and purchase from a brand.”

As the ad market in Japan matures, both parties hope the data market that supports it will mature as well. This is because the Japanese market has a history of accepting new ad technologies cautiously, but once embraced, scale very quickly, which is what will happen as the use of location data increases.

That will see increased usage of various types of data – location and otherwise – by marketers and business decision-makers. Strategies will also become more holistic as data informs every part of the process, from customer identification and acquisition to ongoing relationship management and measurement of success.

2020 will also see Japan host the Olympics, which creates a massive opportunity for brands and advertisers to connect with new audiences.

“Factual makes location data easier to use because it is not siloed. Clients can use location data in their existing campaigns to improve ROI, which we believe will expand the Japanese programmatic advertising market by integrating programmatic buying platforms and digital advertising agencies,” says Sugiyama.

“Additionally, by connecting online data (web data) and offline data (location data/foot traffic), clients have the ability to better understand their customers.”

The Drum previously spoke to Lifesight, a location intelligence company, about how retailers are evolving their location-based targeting.

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