Part 1: Digital Advertising: Unchanging ideas from turbulent changes [serialized by So Miyamura on LINE Yahoo]

LINE Yahoo is known for its corporate culture of promoting challenges for the younger generation, such as actively promoting young leaders regardless of age or year of joining the company. Among them, one person who has received particular attention is So Miyamura, who became the head of the sales promotion department at Yahoo (at the time) in his 20s, and now leads even more departments.

In this series, we ask Mr. Miyamura to talk about trends in the advertising industry from the perspective of platform companies and future trends in the industry. In the first part, I will explore the importance of “user first” based on the knowledge I gained in my sales planning position, and explain some aspects of the advertising industry that change with the evolution of technology and the principles that remain the same.

This column is a must-read as it is full of useful tips for all business people involved in marketing!

Understanding the industry from a platform operator perspective

Nice to meet you all. My name is So Miyamura. Thank you very much for your support.

I usually work in the marketing department of LINE Yahoo! Corporation. My position is the head of a so-called “sales planning” organization, which serves as a bridge between the product department, which is responsible for development, and the sales department, which is responsible for sales.

The characteristics of a sales planning position are that they have a broad perspective, and at worst, they are jack-of-all-trades, as they take a bird’s-eye view of the trends in the digital advertising industry and use every possible means to solve the problems of the entire market (lol). . However, because of this position, I have gained a wide variety of experience, although it is still shallow, such as objectively observing industry trends, observing the interests of various players, and working hard to collaborate with all departments within the company. I am proud of what I have done. I would like to extract the knowledge I have gained from such experiences and provide at least one thing that I noticed.

In this first article, I would like to talk about “User First”.

Important ideas in today’s times

The term “user first” itself is somewhat overused and has been around for a long time. However, for us as platform operators, these words are a universal idea that we must return to in any era, and an idea that has become even more important in the Reiwa era. The reason for this is that the sovereignty of digital advertising has shifted from the provider side to the user side since the late 2010s, as exemplified by the trend toward privacy protection, and the starting point for all ideas is returning to the user.

The acceleration of this trend is likely due in part to the impact of COVID-19, which has hit the world since 2019. Staying at home as a preventive measure against infectious diseases has accelerated the increase in digital usage among users, but at the same time, the impact of information on themselves has also become extremely large, and during the coronavirus pandemic, “information on the Internet cannot be taken at face value.” Approximately 84%* of users felt this way.

Source: Hakuhodo DY Media Partners Media Environment Research Institute “Media Fixed Point Survey”

https://mekanken.com/projects/media-survey/

In short, in the Reiwa era, users have become extremely sensitive to digital experiences, so the importance of a “user-first” approach to proper communication has increased relatively. That’s what I’m doing.

Based on this premise, I would like to extract points that are necessary in the digital advertising field from the changes in the growth of digital advertising.

Changing trends and unchanging ideas

Digital advertising has grown approximately 40 times in 5 years

Digital advertising is now worth 3 trillion yen annually, accounting for 45.5%* of Japan’s advertising expenditures, and its origins are said to have originated in 1994 with banner ads published by the American company AT&T in the digital magazine Media. Then, in 1996, Yahoo! JAPAN was born, and in 1997, Google was born. Digital advertising expenditures have grown explosively, increasing approximately 40 times in the five years from 1996 to 2000.

Source: Dentsu Advertising expenses in Japan

https://dentsu-ho.com/booklets/46

Since the beginning of 2000, marketing activities on the Internet have become commonplace, with listing advertisements displayed on search results screens becoming mainstream, as well as site analytics tools. I heard that specialized units within advertising agencies were already beginning to make their presence felt in the market.

Has it really become an era of “people from frames”?

When I joined LINE Yahoo (*Yahoo Corporation at the time) in 2015, ad technology was at its peak. In particular, the technology that enables real-time bidding competition between the DSP (Demand Side Platform), which brings together advertisers who want to advertise to targeted targets, and the SSP (Supply Side Platform), which brings together the media visited by users, is at the cutting edge. , I remember hearing the symbolic keyword “frame to people” many times a week, which expressed the idea that “to whom the advertisement should be distributed is more important than which frame to distribute the advertisement to.” I am.

There is no doubt that many marketers were involved in and utilized the DSP/SSP business. However, when I look back on it now, I sometimes wonder, “Did we really move from the framework to the age of people?” This is because, in fact, the most used digital advertising at that time was the listing advertisement that was placed in the “frame” on the search results screen. And this has not changed (the composition ratio of listing advertising expenditures in Japan’s digital advertising expenditures was 39.9% in 2023 and 36% in 2015, the peak of DSP/SSP, the highest composition ratio in both cases) .

Of course, there are differences in the roles of DSP and listing ads, but in an era when there was a lot of emphasis on “people from slots,” search ads still ended up being where advertisers spent the most of their budgets. That is true. The reason for this is simply because it has the highest advertising effectiveness. The reason why advertising is so effective is because the search results screen and frame capture the user’s “desire at that moment,” which is “I want to know this right now.”

The idea of capturing the desires of the moment from the perspective of a surface/frame is lost if you only think of “people from the frame”. At a time when people were calling for “people from frames,” the industry as a whole had a strong ad technology-first aspect, and I think that the user-first experience at the moment of contact with an ad was left behind. Masu.

A foundation that remains unchanged even as times change

From these facts I

1. No matter how much technology develops, the user comes first

2. People x frame (people you are interested in x desires at that moment) are important

3. Desire of the moment = motivation for using the platform

I believe that this idea is a fundamental idea that is common at all times.

In fact, in the 2020s, the argument that optimal creative expression depending on the platform is important will increase explosively, as users’ motives for using it will differ depending on the platform on which they advertise. Many have also emerged. I think it can be said that we have passed through the era of “frames to people” and entered the era of “people x frames” (in a sense, we have returned to our roots).

Surprisingly difficult practical user first

User faces blurred due to complexity

Always thinking from the perspective of the user who experiences digital advertising is a completely natural thing to do, and the idea itself is not difficult. However, it is surprisingly difficult to put into practice. The reason for this is the complexity and highly specialized nature of the digital marketing industry. I’ve been working in this industry for nine years, but I’m still amazed every day by the chaos of this industry.

Even when it’s simply called “digital marketing,” there are really, really many areas that those involved in it have to deal with. Market research, media planning, creative, owned operations, budget management, advertising operations, reporting…these are just the tip of the iceberg, but many people may feel like they have “too much to do” every day.

Although it is very simple, it is a very common situation where there are so many things to deal with that it is difficult to secure the resources to deal with the user’s advertising experience. In order to resolve this situation, it is necessary to consciously incorporate automation and AI utilization in each area.

It is important to have a mindset of revisiting the field in highly specialized areas.

Among a wide variety of fields, in fields that require a particularly high level of expertise, companies, organizations, and roles specialized in that field are often created (recent examples include AI utilization and DX promotion). , which in itself is undoubtedly a very important move.

On the other hand, in such specialized activities, because they are specialized, the user-first perspective is often overlooked. If the goal is to “do something new” or “use technology effectively,” it will lead to a repeat of the aforementioned history of users being left behind.

When considering and implementing initiatives in trendy areas, what kind of user experience are you aiming to create? I think it is important to keep this in mind and keep asking questions.

What is the job and role of the marketing department? Introducing required abilities, skills, and useful qualifications

The turning point where the true value of digital advertising is tested

Convenient experience of contacting advertisements

After reading this article, if you have some time, please search for “ads” on your device. Perhaps words such as “how to erase” and “block” will also appear in the suggested words. This is part of how users evaluate advertising in this day and age, and the distorted reality of digital advertising, which surpassed TV commercial advertising spending in 2019 and continues to grow.

Because we know the process by which an ad is posted, so many people are involved, so many things have to be thought through, and it finally goes out into the world, so we intuitively dismiss it as “troublesome.” Things are tough.

Looking at some user evaluation surveys of advertisements, such as the user awareness survey regarding Internet advertising conducted at fixed points by JIAA (Japan Interactive Advertising Association), we find that some evaluations are negative about advertisements, while others are positive that they can get the information they want. The ratings are almost the same, and I think the reality is that there are exquisite evaluations such as “Sometimes advertising is convenient, and sometimes it’s annoying.”

Whether this bifurcation can proceed in the positive direction of “advertising as a useful information experience” will be determined by the total amount of user-first efforts in the industry as a whole. As a platform operator, I am working hard to create better places and means to connect advertisements and users, but I would like everyone to think more about putting the user first in this era.

Thank you very much for reading till the end.