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Dentsu’s President on Advertising, Internet Ads, and Google

While we’re on a Dentsu theme, I though I’d share some excerpts from a recent interview the Nikkei held with Dentsu President Tatsuyoshi Takashima.

On the sluggishness of the traditional market for advertising versus the growth of internet advertising:

Online advertising makes it possible to identify the frequency of ad viewing and the age of viewers, something that is not easy to do with paper media. And with corporate ad budgets facing severe cuts, use of media for which the effects of advertising cannot be determined easily is diminishing. Advertisers are growing selective, and the accountability of the media side is greater than ever today.

On the “Google Threat” (ie, Google moving into traditional advertising channels):

There are a large number of local newspapers and regional radio stations in the U.S., and unsold ad slots abound. Google has tapped this niche market, but I do not think it will spread to prime ad space and so do not feel threatened.

I take that to mean something along the lines of, “Google doesn’t stand a chance of tapping into our network in Japan.” It might be true.

On newspaper and news agency being available for free online:

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Ministry of Finance hires from Dentsu; Consumption tax hike to be advertised to the public?

On Monday, the Ministry of Finance announced that former Dentsu employee Yoshio Masuda, a 48 year-old who served with the firm for about ten years, began his stint as the ministry’s Director of Public Relations Planning and Coordination (広� �企画調整官) on that day. Masuda is the first employee to join the ministry through a public recruitment process. Twelve other employees had been brought to the ministry from private firms before Masuda joined.

According to the Yomiuri, Masuda will serve a two year term in his post. The Yomiuri also hinted that while Masuda may be able to help the ministry communicate its policy better to the public, he might have come on board specifically to engineer plans to introduce a plan to hike the consumption tax to the public. We seem to recall that the 1997 consumption tax hike had quite the disastrous effect on a nascent economic recovery at that time - as described in the Small and Medium Enterprise Agency’s 1998 White Paper.

With Health, Labour and Welfare Minister Youichi Masuzoe saying earlier this week that an increase in the consumption tax needs to be considered, and the ruling LDP claiming that half of basic pension costs should be covered with revenues from that tax by fiscal 2009 (up from one third at the present), on Monday the LDP’s Kaoru Yosano said that the ruling party would lay out a plan to increase the consumption tax from its current 5% by the end of this year.

In a meeting of the LDP’s research panel on fiscal reform on Friday, member Ichita Yamamoto asked:

In a number of other countries 80 percent of the financing of successful fiscal reconstruction has come through spending cuts and 20 percent through tax hikes. Why can’t we apply the same formula to Japan?

Could the answer be that other countries don’t have Dentsu?

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