Exploring the future of digital advertising: “There is a twist in the current digital advertising market ecosystem” Kei Majima, General Manager, Japan, The Trade Desk

Digiday[Japanese version]interview series exploring the future of digital advertising. This time, we asked Kei Majima, general manager for Japan at The Trade Desk, one of the world’s leading independent DSPs, about the challenges that plague digital advertising these days.

After gaining experience in senior sales at a major advertising agency, Mr. Majima became a founding member of Facebook’s Japan branch. After working as a marketing manager at a start-up company and a country manager at a foreign advertising solutions company, he was appointed as The Trade Desk’s general manager for Japan in 2020. It can be said that he is someone who grasps global trends in digital advertising.

“Is marketing that is driven solely by unit price really the right thing to do?” Mr. Mashima asks. On Digiday, we asked him about the problems in the digital advertising market from a DSP perspective. What became apparent was a difference in awareness regarding the transparency behind advertising.

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–Please tell us what you think are the main issues regarding digital advertising in the current Japanese market.

This is just my perspective from the DSP side, but I think there is a “twist” in the current digital advertising market ecosystem. Even though users spend more time on the open internet than in walled gardens, brands are investing more in digital advertising in walled gardens.

The problem is that investment in advertising is not going to reliable publishers that provide accurate information.

(Walled Garden has been criticized for its lax screening standards for ad fraud and brand safety.) For example, we use technology and visual inspection to ensure the quality of advertising for downstream publishers’ businesses and content. ing. DSPs are responsible for monetizing the open internet, and their mission is to help. Brands should also look to the open internet for incremental reach.

――So, what are the factors that caused such a difference?

I think this is probably due to the pure and broad culture of the Japanese advertising industry. There may be some misconceptions that “you have to buy advertising space for each publisher” or “there are so many publishers that it’s a hassle to check each one one by one”.

It’s true that it’s important to expand your reach by investing in advertising in walled gardens, but there are some users you can’t reach unless you invest in the open internet. Although there is some regret about the lack of awareness on the DSP side, I feel that people involved in marketing should reconsider the open internet.

–What kind of impact does this have on the challenges faced by digital advertising?

I believe that the walled garden itself has made a major social contribution by democratizing Internet advertising. However, many people are becoming aware of the danger of becoming too dependent on the main platform. For example, even if an advertiser performs segment distribution using first-party data held by an advertiser, as soon as it enters the inventory in the walled garden, highly granular data may not be returned. It’s happening a lot.

Because walled gardens are vertically integrated, the accuracy of the data tends to be a black box, and no one can verify it. The data we use belongs to advertisers, and it belongs to users. I want marketers to think carefully about whether they are creating a system that allows them to display advertisements that are highly relevant to their users.

–What do you think about the fact that PMP is not widespread in Japan? Also, what do you think about the supremacy of CPC in the Japanese market?

KPIs such as cost per acquisition and cost per click tend to be emphasized, and it is true that in Japan, emphasis tends to be placed on CPC billing. Until now, digital marketing has only been used to meet needs that have become apparent at the bottom of the funnel.

However, as the power of traditional mass media gradually declines, it becomes necessary to implement digital branding measures and reach potential customers. If that happens, CPC-based efforts will reach their limits. In the future, I think there will be more PMPs that use CPM as the mainstream in order to reach customers.

The important thing in mid-funnel marketing is to identify the truly appropriate frequency and develop new ways to present it. If you can run ads that are of high interest to users, nestled between high-quality content, rather than ads that are only viewed passively, interest in your brand should increase.

The appeal of a brand changes depending on the user’s viewing attitude. In this regard, the open Internet may still be able to do more. Is marketing that is driven only by unit price really correct? I want to say this out loud. It’s important to deliver the right ads to the right audience at the right time and with the right frequency.

–As someone who buys ads for advertisers, how do you feel about ad fraud and MFA?

I think most DSPs carry out quality control at the level recommended by the industry, such as the level recommended by JICDAQ, regarding things like how to purchase inventory. In addition to this, we have established a Marketplace Quality Team to conduct final visual checks.

Also, as mentioned above, it is difficult to completely eliminate ad fraud by using a system like PMP that sends content to specific trusted publishers, but it can be avoided to some extent.

–There are some voices saying that transparency is being compromised because there are too many players on both the demand side and the supply side, and that things are becoming more complicated than necessary. Do you think so?

I think the more reliable partners we have, the better in terms of fostering a healthy ecosystem. A healthy ecosystem requires knowing where the advertising space that advertisers are purchasing comes from and through what route, in other words, realizing the simplest and most effective purchasing method.

If we are aiming for a healthy ecosystem, we should have a variety of players. That is also the value of the open internet. By competing on technology and cost, and using various innovations, we can provide brands with a variety of options.

The problem I think is that various publishers may end up focusing on one fixed service. When an oligopoly occurs, a situation arises where information is controlled. In order to increase the company’s profits, the structure may be such that information that should not be shown is not shown. If that happens, it won’t be a good situation for brands or agencies.

–When it comes to transparency, how do European and American companies differ from Japanese companies?

Speaking as a rule of thumb, accountability in marketing is always required in the West. Of course, I think there are some Japanese companies that are strict about this, but my impression is that Japanese companies are ambiguous in that they constantly review their vision, purpose, and why they achieved the results they did.

The emphasis placed on transparency is also likely to be vastly different between Japan and Europe and the United States. In Europe and the United States, marketing is directly linked to management, which is why they seek more results from their marketing investments and always seek transparency (accountability) in terms of how a company’s brand value is created. There is.

–Is there any way for the DSP side to solve this problem? And how should the industry as a whole work to resolve this issue?

We will continue to support publishers with more premium content and information. In this context, I think it would be good if we could work together with brands and agencies to think about the ideal form of marketing that cannot be seen through walled gardens alone.

In terms of TTD’s company-wide efforts, we have created a team in charge of brands and are preaching the importance of the open internet and transparency. It is best to use more neutral partners to create a verified market. Because I feel that this is the way society should be.

Written by Ryohei Shimada