Automotive marketers in Japan are buzzing about interactive TV, which lets viewers request brochures, pricing and other information while they watch commercials.
The concept, being tested in the United States, will be fully operational in Japan in Decem-ber. (See related story, Page 26.)
Hiroshi Takada, general manager of marketing services for Toyota Motor Corp. in Japan, says that interactive TV is more important than Internet advertising to automotive advertisers. Interactive TV is more user-friendly and entertaining, he says, adding that more consumers will be willing to communicate via their TV screens than on smaller computer screens.
'The ability to talk individually with our customers on interactive, digital television - more so than on the Internet - offers great opportunity and potential for us,' he said in an interview in Tokyo. 'It completes our circle of planning and advertising quality vehicles.'
Toyota, the No. 1 vehicle seller in Japan, also is the nation's No. 1 automotive advertiser. And Takada, general marketing manager since 1995, has been relentless in getting more bang for Toyota's marketing yen.
Takada, a 31-year Toyota employee with experience in a variety of departments, says the company this year will spend about 80 billion ($733 million) advertising its five Toyota nameplates.
When asked how much Toyota spends on producing its TV commercials, Takada says, 'We now average $300,000 for a commercial.' Chuckling slightly before continuing, he says, 'Before I came to my current position, the average was $600,000.'
TV is Toyota's top media expense, Takada says, giving the company's media budget breakdown as follows:
TV: 60 percent
Newspapers: 25 percent
Magazines: 10 percent
Radio: 5 percent
Toyota's media spending percentages are similar to those of automakers in the United States, but Toyota's relationship with its advertising agencies differs dramatically from U.S. automakers' ties to their agencies.
Toyota's three shops - Dentsu Inc., Hakuhodo Inc. and Delphys Inc. - compete for assignments instead of working on the same account, as U.S. agencies do.
Toyota's agencies bid for assignments by presenting ideas based on the direction provided by the automaker's 100-person internal advertising marketing department. 'The agency with the best ideas gets the assignment,' Takada says. And that's not all.
Although the common 15 percent agency commission in the United States has been replaced with much lower commissions - usually in the 7.5 percent to 9 percent range - 'Toyota pays its ad agencies a 3 percent commission, and (the agencies) provide marketing research free,' Takada says.
Another interesting aspect of Toyota commercials is the simultaneous use of Japanese and English in some of the spots.
Taking the lead again
During the latter part of the 20th century, American automotive manufacturers - albeit begrudgingly - learned to respect their Japanese counterparts and competitors. Will U.S. marketers begin to benchmark the Japanese as well?
'Why is your country not following our technological innovations in digital television?' Takada asked.
Perhaps American carmakers and marketers still can learn something from the Japanese. Time will tell.