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Vol.18 : David McCaughan (McCann Worldgroup)
June 27, 2007
Gov't blueprint carefully sidesteps details on reform
Nikkei index climbs to 7-year high
Consumers seek adventure
Nissan chief hints at longer-term vision
Expanded coverage: Spongy marshmallow given soft gourmet touch
CRM：(Customer Relationship Management) 顧客関係管理
disciplines：専門分野
central planning：中心となる企画
streamlined：合理化された
（ D: David, T: Terri ）
| T : |
How would you describe McCann Worldgroup specifically here in Japan? What do you guys do for those of us who don't know? |
| D : |
Well, McCann Worldgroup started off as McCann Erickson the advertising agency, which still it is, and that entity has been in Japan since 1961, and it's a complete service advertising agency. Well then, about 7 or 8 years ago, globally we started to restructure a bit as the communication industry changed and instead of just advertising, of course, most of their clients want integrated approaches to all marketing communication. |
| D : |
And we started to build individual companies that service other areas. So we have a company called MRM, which is mostly a direct response and CRM company; Momentum, which is mostly a sort of advent and promotions company. We own Weber Shandwick, the PR Company. So we have a number of other companies, and that all comes under now a total group called Worldgroup, McCann Worldgroup.
And my job as the planning director is really to sort of sit in the center of all of these companies and make sure that we are developing processes and strategies for clients that don't look at particular types of communication or promotion, but sit there and go what's the best solution and what sort of companies or disciplines or activities do we need, and how do we actually plan a complete process.
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| T : |
So you're the central planning hub? |
| D : |
Yeah, it's like having a central planning hub that works across all these different types of disciplines, which is something that you know our company is doing, you know, other companies in that sort of industry are starting to think about because you can't plan...
In the old days we used to have like media planning departments that would just book the radio for example or TV or print, and then you would have a CRM company which was going up and doing something totally different in terms of developing a database and mailings and then getting into the internet, etcetera, etcetera. Of course that's useless. So you got to actually have a central planning to integrate all those things properly.
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| T : |
One of the things I've learned in doing these Nikkei Weekly interviews is that some of the accepted wisdom, I guess, is that in Japan there is a lot of the issue of no central planning, like a lot of corporations here. A little more than perhaps in North America or Europe. There is like no central planning at all. |
| T : |
So it was a real need here in that sense, I think. |
| D : |
Yeah, it's sort of interesting because our client base is split pretty much 50/50 between our global clients and local Japanese clients. It is sort of interesting when you come and look at the Japan marketplace comparing it to say the United States, that a lot of even the major Japanese corporations take a very separated point of view.
You know it's very hard for example a marketing executive from a big American packaged goods company, when they come to Japan and find out that their Japanese competitors will have the PR department, the advertising department, the sales department, and the marketing department, a) are all separate entities. And sometimes all have their own advertising, and their own advertising agencies, and their own promotions.
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| T : |
These are major companies here. |
| D : |
And these are major companies, which in the American model of course, all that would be under the marketing department. So sales, advertising, PR is all just sub branches of the marketing department, and it is all streamlined and centralized more or less, whereas here it is still done in a very separated way.
Not in every company, and it is changing, but there are still many companies that do it that way. That just means that you sometimes have to work with companies where you're doing one thing for them and they are doing something totally different at the same time, you know, so...
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| T : |
Yes, it makes for a diverse work experience. |
silo：（組織の中で各部署の）交流がない様子
confines：規定するもの
empowered：力をつける
（ D: David, T: Terri ）
| T : |
Actually we are sort of moving into - the market here for corporate communications in general, I have a number of questions about it, but how would you describe, besides the issue of silos, how would you describe the market here, and it's 2007, so lots of changes, lots of new things going on?
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| D : |
Well, yeah, in the whole marketing communications area, well, there are a number of things. One is that, as a general rule, it's not growing that fast. |
| D : |
And it's probably not growing as fast as the economy is again. So, one of the interesting things is that you actually look and see that companies are not increasing their budgets, for example, as much as the economy is. Now that is also reflected, you know, many companies will tell you that their sales are not increasing as fast as the economy goes. |
| D : |
And there are a lot of economic reasons why that's happening, but at the same time of course it's a mixed thing. So like everywhere else in the world, you know, the emphasis on the internet is growing. In Japan, perhaps more than most other countries, emphasis on mobile communication is growing because of the Keitai being so powerful here.
So there is a different balance that outdoor is much more powerful in a marketplace like Japan than say it is in the United States, or you are going to get to look at the subways, right.
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| T : |
Right, yes, that's true. |
| D : |
Nobody wants to advertise in the subways because they are afraid you just get graffiti all over it tomorrow anyways, so they are wasted, so there are different sorts of things like that. But the other thing too I think is that, you know, some companies like ours fortunately are having a pretty good time at the moment, but the industry as a whole is having to get used to change, just as the whole society is getting used to change and getting used to the fact that things aren't going to work exactly the way they did in the past.
And so while some companies are saying let's keep on doing the same thing that has always worked, other companies are sort of starting to experiment a bit more and question the mix of things, you know, the traditional reliance on television, etcetera is changing with some companies. |
| T : |
One of the reasons that I'm a McCann fan is because this type of media, you go beyond 'are you buying 'x' toothpaste', I think that's really, really important because people aren't just wallets. |
| D : |
No, people aren't wallets, that's the point. There's not - I've never met, you know I always make a big point that whenever I am teaching inside a company or giving sort of presentations to people in our industry if you're in a room listening to me give a talk about advertising or communication, by definition you're not a normal person because normal people don't want to know about it. Normal people don't sit there watching reels of commercial after commercial after commercial... |
| T : |
They don't go to the award shows... |
| D : |
They don't go to Cannes, the award show that's on this week and for many, many, many people it would be punishment to do that. So unless it was one of those goofy shows about the 50 funniest commercials or something, right... |
| T : |
Right, right, exactly. |
| D : |
So, way I look at it is that we have to break down that barrier of understanding that real people don't think like we do, real people never want to be considered as consumers. In fact if you go out to people on the street and say I'd like to talk to you because you are a typical consumer they'd say I am not a consumer, you know, I am Ralph or, you know... |
| D : |
You are not going to do that. So we have to think of it in that way.
So we end up doing an awful lot of research to understand not the consumption/usage of products and brands, of course we do that, but what we feel what's much more important is to do a lot of background work on understanding people.
And so in the last 3 years or so here in Japan we've launched a lot of ongoing studies where we have one major thing we do which is called McCann Pulse which is an ongoing look at people's lives, and we then within that put together programs like 'Real Mothers' or 'Real Fathers'.
It started off with real mothers with us, in the general course of discussions with young mothers, women in their 30s with young children discovering that they thought of themselves as being very different from women who are only 10 years older in their approach to motherhood, but also in their approach to themselves.
And so we started to dig into what do they really think about themselves, themselves as mothers, themselves as wives, themselves as women, and that was one of the confines, was that today a young mother doesn't see herself as a young mother, she sees herself as a woman who has chosen to be a mother as part of her life, as opposed to not that long ago when you had a child you gave up your life. You were only then seen as a mother, okay. So motherhood is just, it goes back to my earlier point, it's a luxury that you choose to enter into as opposed to any other luxury you choose to enter into.
After doing that, we published these magazines about 1 or 2 a year where we summarize what we've been finding out about these things. And after a couple of those on mothers, one of my guys that works for me here came up and said, what about the poor fathers? Because of course what we were learning in all these discussions was that while women were feeling more empowered, more confident certainly because of the experience of the OL lady during the bubble years as they have got older, got married etc., that worldliness they learn from becoming the world's largest luxury goods buyers, etc., etc., has spun off into a different way that they treat their husbands or different expectation for their husbands.
And so we all know that Japan went through their phase where you as a young woman would say, you know, I want a husband that not only makes money and stuff but is actually intelligent, you know, is actually going to pay some attention to me.
We've also had 10 years experience of being educated by Korean soap operas. What is - I always talk about the fact that the really popular culture like soap operas is the real education world. What the women learn from Korean soap operas. There is a hope of romance...
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| T : |
That's right, gentleness and... |
| D : |
Right, now I know because I have gone to Korea many times and I have a lot of Korean friends, that isn't true, but the perception in the media is, media is a very powerful perception model (don't believe anything you hear on this show).
And so we got into doing this thing on real fathers with sort of that stuff and then we've done other things - we also did a thing on Heisei kids. Late last year we did a - we started to go into more depth on the kids that are in that sort of 16-, 17-year old period that's the first kids born in the Heisei period, which is an interesting route because globally that is the first generation, if you think about the average 17-year old kid today in Japan, he got his first mobile phone at 9 and-a-half.
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| D : |
So he's had a mobile phone for 8 years, and he's only ever known 3G phones, he's only ever known internet-ready phones. So what is now considered in the United States as the most advanced, you know, |
| D : |
These kids have only ever known that. Now they may not have used all the capabilities, but their minimal idea to expect from a phone is what the rest of the world sees as the most advanced phones. And what perception then does that give them in terms of expectations, etc. So we've put together all these studies in sort of booklets magazine formats and send them to clients or give them to radio journalists. |
| T : |
Really? Thank you. What I am looking at now, listening audience, is very neat- A4 - no B5 magazines that are, thank God, in English as well, that tell stories. |
| D : |
And I have just been reminded that I have to say for the 'Real Father' study we actually have a website that is opening on Monday. |
| T : |
Last question is what's your experience if any, with the Nikkei Weekly? |
| D : |
The print form or the podcast? |
| T : |
Oh no - well the podcast - this is the first time but the print - the newspaper. |
| D : |
Well, every Monday morning that's the first thing I do. |
| D : |
It gets - I get into the office at about quarter past seven in the morning and its usually lying around somewhere and the first thing I do is go through it and look for what's going on and what's in trend things and what I can talk to my colleagues in New York and London and show off about... |
| D : |
You know, because I always gets the e-mails every week, you know, about what's happening in Japan and it's usually in the variety of what weird stuff are they drinking this week, but... |
| T : |
There is jealousy there. |
| D : |
There is a jealousy thing. Today you know, like years ago, it was like there was literally tell me something strange to tell at dinner parties. |
| D : |
More and more it is literally like give me an idea because if you think ... |
| T : |
Because that's where it is happening. |
| D : |
Right. Because if you think about [innovative flavors of]water, if you think about any type of beverage, because I am looking at the water you holding but, beverage if you look at the convenient stores... |
| D : |
And what goes on here, they are literally the products that one in five of those will be a hit in France in 3 years from now. |
 Frank Foley / Senior Vice President
HIT Entertainment 
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