Hirotake Yajima is President & CEO of Japanese advertising powerhouse, DAC. Here he discusses the DAC offering, the growing data-driven display market in Japan and trends in the Japanese online advertising space.

Can you give an overview of Digital Advertising Consortium Inc. (D.A. Consortium), its companies and offering in Japan and the APAC region?

D.A.Consortium Inc. (DAC) focuses on internet marketing, offering a comprehensive suite of services for both media companies and advertising agencies.

The various services on offer are delivered through specific purpose companies within the group. There are a lot of functions within the company. Here is a break down of some of our key areas:

Site Representation: D.A.Consortium Inc.
Search Marketing: iREP, Inc.
Mobile Marketing: Spire, Inc
Ad Network: iMedia Drive, Inc.
Publisher Yield Optimisation: YIELD ONE, a service of Platform One, Inc.
Demand Side Platform: MarketOne, a service of Platform One, Inc.
Web-site and App Production: Hakuhodo i-Studio, Inc.
Ad-ops Outsourcing: Ad-Pro, Inc.
Chinese Site Media Buying for Japanese Agencies: DAC Beijing
Chinese creative services: Hakuhodo i-studio in co-operation with Charm

The major shareholder in DAC is the Japanese holding company Hakuhodo DY Holdings.

Can you provide an insight into how the Japanese online display market works – in terms of how media is bought and sold?

Hakuhodo, with their shareholding in DAC, exclusively uses DAC in executing online media campaigns. Likewise, Dentsu only utilizes their subsidiary cci.

As a result, DAC and cci are the two most significant online media trading businesses in Japan, handling both PC accessed and mobile accessed media.

With the buying power that DAC and cci present, combined with comprehensive services on offer, most other Media Agencies buy media through DAC and cci.

How strong is the ad network market in Japan?

In total, there are in the order of 20 ad networks in Japan. The network model has been established for some time, but the appearance of SSPs to optimize a publisher’s utilization of ad networks is only recent.
The first of the SSP yield optimizer offerings, including YIELD ONE from DAC, have just recently launched in the Japanese market, and as such Japanese Publishers are now starting to explore the benefits that these SSPs create in revenue growth and process efficiencies.

Do ad networks aggregate most of the publisher supply or is it sold direct to advertisers?

DAC and cci, acting as media sales representatives, account for about 80% of the media spend in Japan, and so we estimate that its about 20% of media (*about 60-80 billion impressions per month) spend that is sold thru the ad networks.
*Total impressions per month are 300-400 billion in Japan.

How evolved is the exchange marketplace in Japan? Are ad exchanges and DSPs getting traction there?

Rightmedia has been active in Japan for a number of years. In June, DAC’s Platform One launched the YIELD ONE SSP, and cci has established a joint venture with OpenX that has launched the OpenX Japan exchange. Google AdX also has Japanese traffic available.

For the new offerings, they are starting to get some good traction. For example, we believe that YIELD ONE now has the largest traffic footprint of these 4 supply sources.

On the DSP front, we believe that MarketOne, being part of the product offering from DAC’s Platform One, is the most significant DSP in Japan. There are a number of startup DSPs coming through as well.

Can you provide some detail on your own DSP offering? Is it for internal use only? Will it be an ad trading desk for the DAC agencies?

Through MarketOne it is possible to do placement buys on various ad networks including Posti, Adjust, Rightmedia, MicroAd and Advertising.com, as well as RTB based buying on YIELD ONE and Google AdX.
MarketOne is used by 3rd party Media Agencies, who effectively use MarketOne as their trading desk. DAC provides assistance to these 3rd party agencies in training on how to use MarketOne, and consulting in best practices for media buying through the MarketOne tool.

Will you look to offer this DSP solution in other APAC markets?

Our focus at the moment is to grow the adoption of MarketOne in Japan. Most likely China will be the next market we focus on.

Are Japanese premium publishers putting inventory through the exchanges and SSPs?

Rightmedia has had limited adoption in Japan, as the significant publishers to the most part didn’t get involved.
While YIELD ONE has only recently launched and it is still early days, we’re pleased by the traction YIELD ONE is already getting with major publishers.

A number of prevalent publishers are already making their inventory available in YIELD ONE, and traffic volume is growing quickly.

Is the third party data market growing in Japan? Are the likes of Exelate, Quantcast and Bluekai getting any traction in the market?

Many of the Japanese Ad Networks offer user segmenting and re-targeting utilities for use in targeting of media buys on their own ad network inventory. We are not aware of anyone trading these user data signals for use outside of their own inventory environments.

The data market in the US really flourished off the back of RTB enabled trading. Given that RTB capabilities only became active in Japan in June, it is still too early to have had any impact on fostering a 3rd party data market in Japan.
We’ll see over the coming year or so if the Japanese market will follow the US market in seeing data focused businesses emerge.

Are Japanese ad traders buying data – and where are the main sources of third party data?

As per the previous answer, at this stage there is no data trading in Japan.

What overall trends are you seeing in the Japanese and APAC display markets? What will change over the next year?

The increasing penetration of smart phones and the adoption of social media will continue to drive up the volume of display inventory available.

However, correspondingly the process of buying manually from Publishers and Site Reps directly will become increasingly inefficient, and combined with search having limited reach, we anticipate increasing adoption by Media Agencies of buying through SSPs, DSPs and Ad Networks.

Will more media budget go through ad exchanges and DSPs?

As per the previous question, we are anticipating rapid adoption of the Ad Exchanges and DSPs over the coming year or two.

Will we see D.A. Consortium focusing more on data-driven display over the coming year?

Definitely, this is why DAC has invested into bringing RTB enabled supply side and demand side tools to Japan.
We believe having the RTB environments available is a pre-requisite for enabling effective use of data driven display buying.

Given RTB is now rolling out in Japan and supply availability is starting to move into these environments, DAC will continue to expand our data driven demand products.