A portrait of Shawn Schrader taken by his friend Kimihiro Hoshino

Last month Tokyo’s international creative community lost one of its brightest stars, Shawn Schrader, after he lost a battle with cancer. He was in his mid thirties and leaves behind a young family.

I first met Shawn in 2010 when he was working as a designer for a small Japanese production company and my company was looking to hire a junior designer. For a western creative in Tokyo his interest in and passion for Japanese culture, and his language ability, made him a rare talent even then. His maturity towards professional relationships for someone his age was also quite striking. I also remember discussing the state of American politics with him over lunch on that first occasion and noted his clear mindedness, passion for ideas and compassion for others.

Frankly I would have loved to have been able to hire him but in the context of my little enterprise back then he would have been anything but junior, and so we went our separate ways for a while meaning that the next time we met it was as peers, which felt much more appropriate.

By that time he was working at TBWA\Media Arts Lab where he was clearly thriving professionally. We would meet up fairly infrequently, but with zeal, to discuss the state of the industry we shared, invariably touching on brands doing interesting things, great work, talented people, Japanese culture, family life and occasionally politics. He was more informed than me on most of those topics so I really appreciated our meetings as chances to learn and become better connected as often Shawn would follow-up with an intro to someone he “thought I should meet”.

It has become even clearer since his passing just how prolific Shawn was in knowing and interacting with his professional community, and actually, without once projecting himself as a leader of it, has done more than anyone I know to connect it together and nurture it. As the teams he helped grow at TBWA and subsequently at Google’s Brand Studio can no doubt testify, his actions always seemed to be driven by the desire to see what might happen if creative people he liked and respected collaborated fruitfully, and those actions were all the more influential for their selflessness.

In terms of his creative craft his achievements speak for themselves, and there were many. During his time at TBWA\Media Arts Lab Shawn worked on a number of campaigns for Apple that required a strong creative idea, a lot of crafting and attention to detail. At Google’s Brand Studio he worked as creative director across a number of socially impactful campaigns in Japan and Asia of which he seemed rightly proud, although he was incapable of haughtiness. He was featured in Campaign Asia’s 2016 “40 under 40” which profiles the rising stars to watch in the industry, highlighting his achievements in “winning over 40 industry awards including the Cannes Grand Prix” in the preceding 3 years.

When Shawn and I met in the last year or two there was more shared intent to work on something together, that it was overdue, but there was never a sense of urgency either. It would come at some point, I had assumed.

As foreigners in Tokyo we are accustomed to impermanence, people come and go, but having both of us grown roots here, embraced a family-first life, knowing how much he too enjoyed the hectic professional scene with Tokyo’s unique mix of timelessness and yet constant change as a backdrop, my friendship with Shawn was I felt for the long haul, and all the more important for that.

The last thing Shawn published online was this article on LinkedIn entitled “What it takes to be a foreign creative in Tokyo – A little advice for those with their eye on Japan” in which he described his own journey into the creative world in Tokyo, and then with his usual modesty had 11 ECDs and CDs from Tokyo agencies write a paragraph on the topic, and concluded with paragraphs of his own on these 4 areas of advice: “Be committed”. “Be in Tokyo”. “Be unique”. “Learn the language”.  The piece is thoughtful, generous, pragmatic and inspiring. Shawn all over. I really hope it has the effect he intended and I get to work with some of the people it inspires.

Over the last few weeks it has been hard to come to terms with the fact that I cannot look forward to future conversations and collaborations with Shawn, but the more of our shared friends I speak to since his passing the more it is clear that we must instead reflect on and be grateful for how much he gave while he was with us, and ensure that his spirit lives on in our work and play.

Thank you Shawn. Rest in peace my friend.

For anyone who would like to record a tribute to Shawn please use this form.

The post Tokyo loses one of its brightest stars: A Tribute to Shawn Schrader appeared first on James Hollow's Blog about Hybrid Thinking.

The battlefield is a diverse patchwork of countries with distinct languages and cultures, varying degrees of connectivity infrastructure, diverse digital media landscapes, and contrasting political regimes with business environments that range from: mature but essentially open (Japan), barely connected and hence, in theory, up-for-grabs (India), effectively protected (South Korea), and outright walled off (PRC).

Against this vast and diverse tapestry of peoples and places, one of the biggest challenges for Silicon Valley folks is that not enough of them would find the title of this article absolutely preposterous. Having lived in “Asia” for 14 years, I find the very idea of Western minds attaching a single word to everything bundled into this mega-region increasingly absurd.

As I think the following case histories suggest, despite the relative ease with which the dematerialised nature of the web has allowed Silicon Valley’s star companies to scale-up faster than any others in history (Google became the world’s most valuable company in under 19 years), in order to play a big role in the future of the web in Asia, these companies will need to differentiate, decentralise and delegate control like never before, and hence become truly global in nature. Some will manage this feat, others will not, and we have already got some good evidence to suggest which they might be.

China’s Walled Garden

In Europe, Google has attempted to position itself as a “Growth Engine”, a vital and benign component of an industrial and cultural ecosystem that will create new business opportunities, innovation and, with them, much-needed new jobs and prosperity. In a continent that is going through its own “lost decade” that might well persist much longer, it seems like a well-tuned message to the bureaucrats in Brussels who seek to limit Google’s dominance through anti-monopoly rulings and punitive tax bills, but, whether this argument works in Europe or not, it is clear it would never work as a one-fits-all stance in Asia.

In China, for one, the CPC’s legitimacy to govern is in all practical terms the promise of continued economic growth, so you can imagine how they might react to Google attempting to assume a similar position. Of course, the CPC made this thought experiment academic by forcing Google’s hand on censorship, leading to Google—you have to say, to its credit—pulling out of China back in 2010, feeling that to remain would compromise its “Don’t Be Evil” corporate philosophy.

In the context of Asia’s emerging digital economies, and with Google’s growth engine claim in mind, the case for limiting the influence and power of global players to allow a healthy culture of  local entrepreneurship to emerge and with it locally owned businesses is by no means illogical or counter-factual. Again in China, where protectionism has been overt, the likes of Baidu, Tencent (WeChat), Weibo and Alibaba are dominating similar spaces that Google, WhatsApp, Twitter / Facebook and Amazon occupy respectively elsewhere.

The reality is that despite the extraordinary wave of Globalism that has proceeded since the 1990s, Asia’s spectrum of “regimes” still each need their own careful strategy that achieves cooperation without being collusive. And with America itself having elected its own “regime” recently, this need to have a regime-strategy may have come home.

Korea’s Protected Park

The price of protectionism has always been the fact that companies sheltered at home are unable to compete beyond the barriers erected to protect them, and so far China’s own web giants have confirmed, rather than countered, this pattern; although M&A activity by Alibaba in particular is at least diversifying their portfolio.

Although South Korea is no China, it is effectively protected by its unique language, relatively small size (50m population)—meaning that there is usually a more alluring prize (bigger fruit, or lower-hanging) to chase for global corporates—and, less passively, a government that makes it extremely hard for foreign companies to operate comfortably.

The continuing dominance of the NAVER platform, a web portal-style dinosaur that makes no pretence at offering organic search results that, to my web sensibilities, should have gone extinct when Zuckerberg was still wearing braces, is perhaps evidence of this effective protection, but then every Korean I ask tells me they find it very useful.

The story of Korea’s dominant chat app, KakaoTalk, run by DAUM, illustrates the sort of “regime risk” at which would-be inbound investors balk. With 35m users—70% of the entire population, or 93% of smartphone users—it is just the sort of “cultural infrastructure” which makes it seemingly indispensable to a society, and the same breed of soft hegemony that Google, Facebook, Apple and Amazon profit from in the US and Europe.

In October 2014, it was revealed that KakaoTalk had been colluding, likely under duress, with President Park Geun-Hye’s increasingly authoritarian government in censoring statements that “insulted” or made fun of (i.e. criticised) her on the platform. In South Korea’s well-protected economy where economic success has been based on collaboration between government and industry, the question “did they have any choice?” is well worth asking.

Censorship in Asia is not limited to China or South Korea, but is practiced by most governments in one way or another, as the example of KakaoTalk in South Korea later on highlights.

How much are western companies willing to get along with governments?

It was clear though that many of KakaoTalk’s users were incensed with 1.7m of them voting with their feet  in just one week after the scandal broke, digitally emigrating to the privacy-guaranteed Telegraph app that offers privacy from prying governments (thanks to parking its servers offshore).

KakaoTalk backtracked and, in defiance of government intrusion, guaranteed their users they would not be the victims of government censorship; their user base, enjoying the ultimate of protective network effects, has not been significantly dented.

However, a year later, KakaoTalk’s co-founder and CEO was forced to resign after a government investigation found that he had failed to do enough to prevent the sharing of child pornography on the platform. This was widely seen as President Park exacting revenge. Who would want to be the CEO of a content platform in Asia?

Of course, since then, Park herself has had her comeuppance, deposed after a series of scandals that drew millions to the streets to demand her resignation, and now there is a new political reality for companies to deal with. NAVER and DAUM will no doubt be able to ride out these bumps in the road, but these incidentns are not making Korea any more appealing to market entrants, and stand for the sort of risks that Asia’s fragile democracies and autocracies pose to Silicon Valley and Western companies in general.

Japan Falls in LINE

Japan used to be accused of protectionism all the time—mostly around the car industry—and, like many other old conservative rallying cries, Donald Trump has recently brought it back from the dead. But, as the success of Germany’s luxury car brands in Japan proves, the main barrier is the eye for quality of Japan’s savvy consumers, who perceive U.S.-made cars as relatively poor quality and unreliable. Are they wrong?

The same appreciation of the beauty of superior function has helped Apple, Google, Facebook, and Amazon all enjoy excellent margins and globally significant profits from Japan usually #2 or #3 globally. But today Japan’s most popular digital platform is LINE, an offspring of the aforementioned Korean media monopolist NAVER. How did a Korean up-start steal such a prize?

According to the press release that heralded the launch of the LINE chat app, it was inspired by the 2011 Eastern Japan earthquake, since so many people were unable to reach each other over the jammed 3G networks that ensued. This spin seems to have been taken at face value by Japan’s press, but the real story was much less philanthropic. NAVER realised they had lost the Korean chat app market to their Korean rival DAUM’s KakaoTalk, and saw the nearest alternative user base—both in terms of geographical and cultural proximity—Japan, as their chance to make amends. Thus LINE is actually a copycat of KakaoTalk, imitating its cute sticker-based visual UI, and it now boasts 45m active users in Japan and 280m globally—far more than KakaoTalk, which never really got going outside of S. Korea.

LINE’s success in Japan is due to the fact that—rather than in any way representing a colonisation by Korean cultural forces—it is intrinsically colonizable by Japan’s own visual creative culture. Just like the way the AppStore liberated Japan’s cloistered developers years before, LINE’s stamp gallery represented a new and socially emotive creative realm within which to unleash Japan’s existing characters, many of them brand mascots, as well as invent new ones, within which they could gain notoriety and spin out of.

Despite the very Japanese expression found within LINE Japan, you have the only Japanese platform that could ever go global, because it is purely visual, and allows for complete positive co-option by any local culture, not just Japanese: a trait that is paying dividends in countries like Indonesia, Thailand and Taiwan, where the majority of chat app users are on LINE, and even in India, where it has a 25% share.

After several years of aggressively building out its product and platform its model is analogous to the Yahoo! portal model of the late ‘90s, being a one stop UI for mobile, incorporating photo app, shopping, job searches—you name it. Who cares which of Android or iOS you are using when it’s actually LINE that has got all your needs covered, and it all looks so cute and friendly too?

Although it is true that Japan’s relatively apolitical users are not as fussed about geopolitics or nationalism as many others in Asia, even so, the extent to which LINE feels Japanese to the average user despite its Korean parentage—given the ongoing tensions between the two countries on a political, territorial and increasingly economic level—is testament to the unique type of acceptance that brands which comprise platforms for culture win for themselves. As with KakaoTalk’s users in Korea, who, despite government collusion, could not really imagine life without its familiar way to communicate with friends, LINE is well and truly “adopted” by Japan, and while one day the evolution of technology will make it obsolete, as a brand, it is beyond love and hate: it is just there. In other words, it is unique cultural infrastructure.

Google’s global strength (and what killed its chances in China) is the neutrality of its search engine to language, culture and politics. According to its own algorithmic-based brand of content democracy, it surfaces useful information in the language of the user better than anyone else. Looking at it from the point of view of the content and the people that make it, Google’s search results pages are eminently “colonizable” by local content and content publishers, and as such the roots of its transcultural success are the same as LINE’s.

As we turn our attention to perhaps the greatest as-yet unclaimed prize of them all, India, this lesson about the route to soft-cultural power is one that should be well noted, although it is probably too late for Facebook.

India & South East Asia are Colonised No More

Nowhere does the battle for the internet come into sharper focus than in the context of the emerging consumer economies of India’s diverse provinces and the states comprising South East Asia.

In 2016 Google launched a new chat app named Allo, as far as I can make out with India squarely in mind. It advertises itself as being a “smart messaging service including stickers, emojis and text.” The smartness comes from the inclusion of Google Assistant AI, allowing users to have chat conversations, to pull up information and content from Google’s knowledge graph, and also easily set up daily message alerts with weather forecasts or traffic information. But it does not seem to be taking off, whereas Facebook continues to hoover up the newly connected.

For most of us old enough to have had Google as our tool of choice for finding and exploring the web’s immense ecosystem of content and services from before Facebook emerged, the idea of an internet without search makes no sense. Google has survived the transition to a mobile based experience, is stronger now than before the smart phone revolution, but it’s centrality to a connected experience is threatened by mobile apps, and it is less relevant in a country which has not built out a digital ecosystem of content and services.

This is why for the majority of those hundreds of millions of users jumping on “the internet” for the first time via their new phones, the internet equates to Facebook and Messenger, and this is deeply worrying to Google since it renders their search technology redundant and negates their principal business model for these emerging user segments, and it will not change much if the majority of content is created within a walled garden app. It is also worrying for the rest of us who value net neutrality and see the web as a realm of the people for the people, and are concerned if investor-governed corporates like Facebook use their walled-garden apps to constrain users’ curiosity and creativity within their networks. It’s scarier still if they have done deals with regimes as table stakes to be the game at all.

Facebook’s lead Trojan Horse in recruiting the newly connected users in developing countries is its NetBasics initiative. Although it is framed as an emancipating not-for-profit, Facebook’s NetBasics is a deal with telcos in developing markets where new phone contracts come with free “internet access”, which amounts to access to just a few apps, including Facebook, which invariably is where these users become engrossed—because for human beings, there really is nothing more sticky than other human beings, starting with friends and family.

Thankfully Facebook so catastrophically bungled their attempt to capture the future potential of “the Indian market” that their “NetBasics” model was banned on net-neutrality grounds by Indian regulators, and Zuckerberg has had to turn his focus to the still-collusive regimes of Sub-Saharan Africa to show his investors fresh user traction. As this excellent and deep piece of journalism reveals, Facebook was arguably culpable for treating the Indian government like a Banana Republic, trying to cynically leverage its huge existing user base to influence a government panel, and in general acting through seemingly neocolonial self-interest.

I do not believe that Facebook or comparable companies are evil, but the way it is wired as an organisation, with too much power centralised in the ivory towers of Silicon Valley, and too little entrusted to teams in countries like India which could have dealt with the complex challenges on the ground with empathy and sensitivity, condemned it to this fate. In my job, I see too many international organisations hobbled in this way: global in their operations but lacking a global nervous system and consciousness that would allow them to reach their potential in distinctive cultural and societal contexts.

Infrastructure: From piggy backer to the piggy backed?

It was never supposed to be this way. Silicon Valley companies acting like telcos? Cozying up to regimes. Playing politics. Perhaps it was always so? But in the race for user growth, context-specific adaptation and innovation is surely the only strategy, so doing things that would seem bizarre in the Valley should not, I believe, be off-limits. However, I suspect that the extent to which they are able to stretch their ways of thinking and operating while remaining comfortable—their agility as a brand and as an organization, in other words—will be their limiting factor.

Already the user growth scenarios that have been committed to are butting up against very real limitations, such as connectivity itself. Facebook’s Net Basics aims to address this fundamental impediment to speed of growth. Alphabet (Google’s parent) has developed Loon to provide network coverage to remote areas. In India, Google’s FreeWifi program will connect 100 train stations with Free-Wifi for 1 hr per day per user, delivered in partnership with one of India’s biggest rail networks. Piggybacking the existing rail infrastructure is smart: not just because of the instant scaleability it brings—connecting 14m people per day (and not the same 14m either) —but also because it is democratic, since the trains in India are one of the more inclusive services “enjoyed” by India’s rich and poor alike.

Google Station provides free wifi based on India’s rail network infrastructure

Silicon Valley companies want these infrastructural investments to be appreciated by the governments, key opinion formers and peoples of these developing markets, and well they might. They are going beyond their dematerialised low-marginal cost models, investing in bricks rather the bits to help developing countries climb out of technology poverty.

But the same actions can be looked at more cynically as simply long term investments, in the same way that utility companies laid wires and pipes decades ago in order to be able to charge me for my basic connective utilities today. The reality is that social networks have promised their investors user growth that is not now possible without these hard-infrastructure investments. Silicon Valley businesses have piggy backed someone else’s infrastructure in developed countries, and this worked because it made that infrastructure more valuable. No such win-win exists in developing countries. In fact it is likely to be the infrastructure that the Silicon Valley companies create that will be piggy backed. Only fair, right?

How brave Facebook and Google and others will be in building out infrastructural assets is open to question. Even if they only plan to play the crowd-in investor role, the one that Governments usually do to pull local private investors into the space, how much credit will investors and fund managers give them, since usually they like the companies they invest in to fit within neat categories. It helps them apply their risk models with less ambiguity. This will not be as easy when their growth potential is as much dependent on scaling existing business models as building ones in very different areas.

Infrastructure: social infrastructure

But it is not just hard infrastructure that needs to be developed and nurtured. The sort of soft, social infrastructure that the LINE success story demonstrates to be so important, and which is borne out in the now long-lasting success of platforms like YouTube, where charismatic YouTubers energise its content ecosystem, are also great examples of aligning the interests of a platform’s users with those of the platform’s owners. YouTube has long been the best example of an attention-based economy, one that is disrupting many entertainment industries, not least music. It works because the interests of the artists (being paid for their art), the users (discovering, following and supporting artists) and the platform (trading attention and context-specific credibility for advertising revenue) are perfectly aligned.

There was a similar harmony in the early days of the smart phone app stores as when they served as market places for digital creators and coders to monetise their passions and interests, although today, under the relentless pressure of hardware and software escalation, they have been industrialised to a large extent.

If Allo’s release had been supported with an outreach program among India’s designers and creators to kickstart an ecosystem around chat stamps / emojis, its trajectory might now be quite different, because if there is one thing that is more sticky for humans than their friends sharing the day’s web flotsam, it is the output of passionate and charismatic people on a creative journey in full view of a connected public, reflecting their societal, political and media context through their work.

Are the CPOs of Silicon Valley’s platforms dialled into these creative potentials to make the adaptive features that would allow their products to be platforms for an emergent creative and cultural space?

Human infrastructure is perhaps as important in judging a market’s potential as any other, and just as worthy a target for investment. A healthy and robust web ecosystem is based on educated and empowered web users. The Asian mega-region comprises wildly diverse levels of literacy around key issues such as privacy, security and net neutrality.

Precious few governments or companies are investing in the education that would bring their literacy up to the level where they can protect themselves and defend the entire ecosystem against exploitation. Google invests in programs that promote their values in Asia, in Japan for instance promoting women coming back to work; in India, “Helping Women Get Online.” These are driven out of Google’s Brand Studio network, which is just the sort of decentralised interconnected organisational structure that can give a global company and brand both local sensitivity as well as global coherence, but is it on a scale big enough to make a dent given the forces they are up against?

Is anyone winning the battle for Asia?

While the notion of battle in Asia over the internet is clearly hopelessly simplistic, if it were a battle Silicon Valley is finding it tough going. The main reason is the diversity of contexts in which they find themselves needing to adapt in order to reach ever more users is both eroding the low marginal cost advantage of their expansionary business models, and the same factors are regularly exceeding their ability to make smart informed decisions to meet local challenges and opportunities.

In contrast the Asian upstarts that are emerging as rivals on the ground, some getting regional footholds too, although not winning on a global level they are forging a new balance of forces that will arrests the expansionary trends we have seen over the last 2 decades, since they have no issues with adapting to local market conditions.

Discarding the neocolonial battle metaphor, and instead thinking about a company’s “fitness” in a competitive global x local context, fitness has a lot to do with how a company can remain true to its core values, true to its purpose, to be a coherent brand, despite a lot of dimensions in which the context is unique. Do they invest in decentralised adaptations, or cut their losses and focus on centralised efficiency? There is no simple answer, but which are even asking the question?

Although Silicon Valley’s global companies have the state-of-the-art communication, data and analytics systems to achieve this, and are not as burdened with legacies as most other companies, they still need to understand the nature of the challenges in a coordinated way in order to adapt and meet them—and this, in itself, is proving to be no simple task.

The post How Silicon Valley is losing the Battle for Asia appeared first on James Hollow's Blog about Hybrid Thinking.

The management theory classic that told the Toyota story for the first time

A little while ago I read a book called The Machine That Changed the World, written in 1990 as a summary of a 5 year $5m MIT research project into the global automobile market.

I discovered it while looking for the best description of the most sophisticated, long-term-successful manufacturing organisation & method (of complex technology) the world has ever produced, and I am tempted to believe that this book describes it. In fact I was so inspired I ended up writing my own notes and sharing them with some friends who are experts in manufacturing in order to understand what has happened since 1990. These additional insights are added at the bottom of the notes below.

The “machine” in question is, in a word: “Toyota”, and it describes the emergence of their “lean manufacturing” model and its subsequent proliferation to the other Japanese car manufacturers and during the 1980s more broadly to many plants in the US as well. But the story is a lot bigger than that one word, than the car industry alone,  and made me realise that I really had no idea how much mass manufacturing had evolved since its invention by Henry Ford, even before Toyota, and Japan’s other “assemblers” revolutionised it from the 50’s through to the 90s. Revolutionised is not in any way an exaggeration it seems.

It also made me think a lot about the potential for coupling machines with the sort of creative problem solving that still only teams of humans can deliver. We are now in the era of AI, but actually the lean manufacturing lesson informs us that we are really in the era of “humans x AI”.

Mass production vs Lean production

The post Japanese Innovation: The machine that changed the world appeared first on James Hollow's Blog about Hybrid Thinking.

The Japanese advertising industry is not well understood from the outside. In fact, I am not sure it is that well understood from the inside. In a post I published in 2014 called “The Japanese Advertising Industry in a Nutshell” I tried to sum up what makes it unique, the characteristics of the advertising itself, and explain why it has remained dominated by domestic agencies.

In the context of my readership the post “went viral”, still gets a lot of traffic, led to a bunch of speaking offers, and sparked off a lot discussion among my peers who work in advertising here in Tokyo. From all of this I learned a tremendous amount and it helped to solidify the ideas, and hence this post is an overdue follow up that aims to:

• Summarise the original article’s assertions
• Describe the context within which the advertising industry has come about, and so help to explain why it is
• Address the question of whether Japanese consumerism is fundamentally different or not
• Revisit the claim that the western agency planning model does not work in Japan, explain where I stand now on this point
• Bring the story up to date – what if anything has happened in the last few years to suggest that change is afoot

1. The Japanese advertising scene has been “captured” by a sort of cartel made up of the TV stations (who make the programming that creates the celebrities), the talent agencies (who “manage” the celebrities’ commercial contracts) and the advertising agencies (the dominant one being Dentsu, who effectively auction off access to programming and celebrities).
2. The most powerful entity in this symbiotic ecosystem is Dentsu (the middleman prevails!), and most outsiders assume it is based on exclusive access to media, but actually it is just as much to do with controlling access to the celebrities
3. The rise of CyberAgent is a proof point of this reality: the web media company (actually today it is essentially a Dentsu style agency for the web) which rose to prominence off the back of AMEBA, the celebrity studded blogging platform, are the upstarts that beat the agency establishment at their own game, but on the web, by creating a business model based around access to celebrities and selling its associated media and influence
4. Because of Japan’s relatively more homogeneous society and consumer mindset of wanting to be integrated into the whole of society, Japanese advertising aims more to fit brands into the communal cultural zeitgeist, to feel “of the now”, than it does to make them stand out in a conceptual way
5. Hence Japanese executions tend to have lots of small cultural references, thematic and aesthetic, that make them “highly crafted” in a way that obviously foreign creative directors and award show judging panels will always struggle to appreciate
6. Casting TV talents who are currently a la mode (and these trends are rapid) is an expedient way to achieve “of the now”, make the brands relevant to consumers here and now, especially those who like watching TV, without having to think too hard about communication strategy, while keeping the client happy and excited at the same time.

Japanese celebrities are typically manufactured on TV, and access to their endorsement is controlled by the big agencies

This brand sponsored-entertainment complex is a monster, and it’s not budging. Since I first arrived in Japan the decline and fall of its lead protagonist, the chief bully in this old-boys playground, DENTSU, has been confidently predicted but it has not happened yet.  Such a complex cannot exist in isolation from the broader consumer economy, but rather it sits on top of it, dependent on it for all the string-pulling it gets away with. And there are characteristics of the system that allow the model to be sustained and help explain its robustness.

Japanese advertising’s broader context

1. Japanese manufacturing is more agile, so product variants come to market at a much higher frequency than in other countries, so many brands can stay salient through announcing new products regularly without having to think much about long term brand positioning or making advertising that supports a long term emotional role
2. Fed on this diet of product innovation (continuous functional evolution) the trade / retailers have a less than sophisticated appreciation of the potential role of advertising to sharpen emotional relevance, and generally like to see i) high awareness campaigns ii) with big celebrities iii) announcing product news, and will reward this formula with more shelf space or equivalent priority status.
3. Advertising space in Japan tends to be cut up into smaller chunks, because the media-revenue-driven agencies can make more money that way and it fits the expectations of the retailers. Taking TV as a case in point, the vast majority of TV spots in Japan are 15secs, rather than mix of 15, 30 and 60secs you see in most other developed markets. Creative execution quality being equal, a 15sec spot-based media spend provides perhaps a 10% increment in awareness over a 30sec based media flight, so for short term salience-grabbing campaigns, the 15sec model is pushed by media planners and tends to prevail.
4. 15secs gives the creative teams less options to create a conceptually-driven ad, particularly when the client is keen to see the celebrity that they have just been sold by the agency at vast expense in every single frame of the 15secs (not to mention the other media channels) if at all possible. Since TV is still in general the central spend, this tends to drag everything else down.
5. Japanese TV is almost pure escapism, and tends to be dominated by “noisy” programming (variety shows, celebrity panel discussion shows, stand up comedy, edutainment style shows also with talent panels, with some fantastical dramas thrown in), combined with the fact that most households have digital TVs with recording functions that allows ad-skipping on playback, hence advertising needs to be entertaining and eye catching first and foremost, and there is truth in the idea that some viewers are interested in seeing what the celebs are up to in their endorsements

The post The Japanese Advertising Industry in a Nutshell #2 appeared first on James Hollow's Blog about Hybrid Thinking.

The intention is to frame how to think about planning brands in their proper context, and it establishes 7 brand planning principles based on fundamental human psychology:

1. Brands exist in people’s brains as a complex set of memories, relationships, associations and emotions.
2. People tend to think about brands as if they are people with personalities and relationships to other things, like people they know
3. Strong brands are distinctive when they engage your senses and the more senses they engage you through the stronger they are
4. Strong brands are unique and distinctive, so brand communications should communicate unique benefits, both rational and emotional. The more mature the market in general the more emotional differentiation becomes important
5. Brands with strong narratives will benefit from higher recall, being more compelling to consumers and enjoy word of mouth effects
6. When planning communications, think about the reaction you want to elicit more than the proposition you want to ‘insert’, and design a communication or experience that inspires that response
7. Global brands are able to target the same emotional positioning, but their communications will likely need to be redesigned in local markets to elicit the same emotional response

Brands only exist inside brains

Perhaps the most important implication of applying this framework over others is that it gives creative people the freedom to develop the communication, the stimuli, in the way most likely to elicit the desired response.

Universality of human emotional reactions

I have been known in the past to make a case for exceptionalism when it comes to how consumers in culturally distinct countries like Japan are wired. Does not the differences between consumers say in the US and Japan precludes a globally consistent brand strategy and communications defined in emotional terms?

I believe most people have a quite distorted view of the genetic make up of the human diaspora. I know I did until fairly recently. You hear of pre-human skeletons being discovered in South Africa from a million years ago (e.g. homo erectus) or in a Spanish cave systems (Neanderthalis) or dug up in Inner Mongolia (Denisovans) and you get the impression the human line came from all over. In fact, all these species also originated in Africa like us, but left Africa and colonised Europe and Asia, only to ultimately die out.

Sapiens originated in Africa as a very tightly defined species genetically, owing to the fact that at some point our population was whittled down to just a few hundred or maybe thousand individuals , and only emerged very recently from Africa, certainly no more than 100,000 years ago, probably more like 40,000 years. There was some interbreeding with Neanderthals in Europe which gave rise to some distinct adaptations to the cold climates in Northern Europe, but basically we are of very pure stock.

Global genetic diversity studies have shown that there is less genetic diversity (a statistical measure of variation in our genomes) than exists in a single group of chimpanzees in East Africa. This astonishing fact explains why a smile is a smile is a smile, wherever you go on the planet. Why the sort of innate, subconscious reactions to certain situations I have been describing are actually universal human traits that apply to consumers anywhere. The same cannot be said of other primate species for instance.

The importance of establishing this fact to further embolden moral progress as a global community cannot be overstated, but the implication for brands with global aspirations is also profound. It means that defining a brands emotional relevance can be done at a global level. Also that a “global campaign” can see to elicit exactly the same emotional response from audiences anywhere in the world. What it does not mean is that you could expect the same creative execution to be able to elicit the strategised response. For that you do need creative people in tune with the local audience and their cultural conditioning.

Seven brand planning fundamentals

1. Brands exist in people’s brains as a complex set of memories, relationships, associations and emotions.
2. People tend to think about brands as if they are people with personalities and relationships to other things, like people they know
3. Strong brands are distinctive when they engage your senses and the more senses they engage you through the stronger they are
4. Strong brands are unique and distinctive, so brand communications should communicate unique benefits, both rational and emotional. The more mature the market in general the more emotional differentiation becomes important
5. Brands with strong narratives will benefit from higher recall, being more compelling to consumers and enjoy word of mouth effects
6. When planning communications, think about the reaction you want to elicit more than the proposition you want to ‘insert’, and design a communication or experience that inspires that response
7. Global brands are able to target the same emotional positioning, but their communications will likely need to be redesigned in local markets to elicit the same emotional response

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Today some noteworthy Silicon Valley brands are investing in the Japanese market

There is a lot written about Japan and it’s basket-case economy in the US press, and most of it is wrong. The reality on the ground is quite different, and I would like to tell you about a few of the smart American brands that understand this and are profiting.

In doing so I am going to try answer a pretty simple question:
Why do some great American brands choose to double down and invest in Japan today, while others pull out?

Is it hard to do business in Japan? Well, it’s not yet a vassal state of California, but it is a relatively easy country for brands to get up and running in, with the right governance laws, IP protection, an increasingly open minded and multi-lingual, though still diligent labour force.

Opportunities & Efficiencies in Japan

It’s digital advertising landscape too is perhaps the most similar to the US among major economies, dominated by Google, Facebook and Twitter with some noteworthy local players in the mix.

There are some great opportunities for efficient investment as well. For instance in Tokyo alone you have in one contiguous metropolis a population the same as California’s, but squeezed into an area the size of Los Angeles county. Tokyo alone has more consumers than Canada, and 50% more than Australia…

But Japan has not worked out for everyone. A great US brand that recently threw in the towel is FORD, who closed shop in Japan in 2015 after selling only a few thousand vehicles in the preceding 12 months.

Now you could say, well, that’s cars, and Japan is the last place you want to be selling cars. But in the same year Mercedes Benz celebrated its best year in Japan of all time, making over $100m in profit. You would think it’s hard to find double digit growth anywhere these days, but Mercedes notched up 15%.

Of course a few years ago a new American car brand was born not far from here, and TESLA is already a darling among Japan’s many millionaires. TESLA opened a bunch of new service centres in Japan in 2015, and is investing in Japanese language related usability & navigation.

Perhaps with Tesla in mind it is a good time to mention how much Japanese consumers love brands. This is not the shallow materialistic “me too” purchasing culture that frothed uo in 80s & 90s, and you see in other bubbles. It’s the long term, well researched, quality-seeking kind of love that leads to loyalty. It’s a love of brand stories.

Japan’s consumers are brand savants

When Steve Jobs passed away in 2011 I was one of the many thousands who went to Apple’s flagship store in Ginza where a mountain of flowers and messages spontaneously built up. It was interesting to see what those messages said. Although many did say “we love you Steve” it was not simply idolatry, since many belied a much deeper sentiment. In fact more than anything they said “Thank you”. Because Japanese consumers appreciated the fact that Steve Jobs respected Japan, it’s culture, it’s noodles. He understood their love for beautiful design, quality and authenticity, and made great products for them.

Another Silicon Valley brand, one that was spun out of innovation at Stanford back in 1985, has recently decided to double down on Japan. SunPower is breaking free from its Japanese partner distributor to go head to head with Panasonic at the high end of Japan’s residential and commercial solar installations. The solar marketplace is mature, and quite saturated with cheap Chinese makers, so this is not about a land grab. This is about giving consumers an alternative brand choice, with emotional differentiation as much as functional.

And if you think you can see a pattern in the types of brands I have mentioned, let me tell you about one more American brand thriving in Japan that is not known as a tech innovator. In fact it has barely changed in its 80 year history. SPAM. You would not think it had much to bring to Japan, but you would be wrong. It is marketed as a relatively premium product, costs more than fresh chicken by the ounce, and is loved by Japanese housewives. You certainly have to rethink how you tell the story, though, and that’s where we come in, but if you have something unique and authentic to offer, you are in business.

So did I answer the question?

If I had to tell you in single word why smart American brands are investing in Japan today it would be this one: MARGIN. Japanese consumers are prepared to pay for brands they see as offering unique value. That value is not just functional. Actually it’s mostly emotional. And it is created by telling brand stories in a very local way, and if you are lucky, by an agency that gives you an “Unfair Share of Attention”.

The post Why US brands are investing in Japan today appeared first on James Hollow's Blog about Hybrid Thinking.

Japan has long been importing and adapting advertising formats – in this case beer poster girls!

I have seen this process from both sides, initially while working in the UK office of a big international agency, where we were the hub, creating and “distributing” campaigns to other markets. But ever since arriving in Japan I have mainly been “on the receiving end” as it were, and it is exacerbated by the fact that Japan really is a different market. Whether that difference is fundamental, or one of degrees, is a question I have explored in previous posts, such as this one describing the Japanese advertising industry, but for the purposes of this article I will focus mainly on the cultural and linguistic gap.

In fact, for many of the international agencies in Tokyo, most of the work they do is in-bound localisation, and if they are not empowered to properly adapt or transcreate the brand to Japan – which is often true – it can be quite an unrewarding role. It’s one of the reasons I actually got frustrated and struck out on my own from one of those big networks to start up my own agency here in Tokyo back in 2004.

Although 90% of the work we do at Profero Tokyo is original to Japan, from time to time we lead a localisation process, and when conducted in a strategic way, they never fail to reveal deep insights into the core brand DNA and highlight the fundamental similarities and differences between cultures, and hence can be fascinating and rewarding projects to be part of.

The Brand Localisation Framework

For simplicity I am going to look at localising brand taglines specifically, and use them as a proxy for brand positioning, because ultimately this is the point. I am going to use “tagline” to mean either the semi-permanent brand tagline motifs, as in “Honda – the power of dreams”, as well as product-brand taglines, and also campaign taglines, such as Apple’s “Mac vs PC”, which are obviously more transient, but essentially the process is the same.

In some of the examples, e.g. MasterCard, a campaign tagline ends up becoming the brand tagline, for a good few years at least, which is far from uncommon, so overall I feel confident generalising in this way.

It is also true that the same principles can be applied to other executional choices when localising e.g. the visual realm, choice of music, voice actor, you name it. All elements ultimately need to be considered within the same framework.

In general I think there are 3 approaches to bringing a global tagline into Japanese.

Approach 1: Leave it in English

• Although in many European markets and some Asian, proficiency in English is high enough to just go with a tagline originally crafted in English, that is not true of Japan, so unless it is really, really simple the target audience will not understand it.
• This can be justified if you can assume that some people will get it, and for the rest spell it out in some form or another: sometimes just writing it in katakana to make it feel more familiar, or else explain it in Japanese without attempting to replace the original English.
• This is often the most expedient approach for brands looking for global consistency more than local emotional connection.
• I believe it is usually a big missed opportunity and only really makes sense if the brand trades off its global status almost exclusively in differentiating itself.
• It is most likely to make sense for a brand that has lots of products that can have a product brand story told about them, and particularly if they are really innovative products.
• An example would be Nike’s “Just do it” motif. It really helps that the original is so simple that most of their target audience would get it, and the fact that their products are designed around universal human features, namely their bodies. However, it would be wrong to believe that Nike loses nothing by not having a proposition that is as powerful in Japanese as “Just do it” is in English.
• Another example would be the original iPod and iPod Nano TV campaign by Apple using the dancing silhouettes that became so iconic. If you have a break through product with visceral cut-through creative and your brand benefits from its foreign / global cache, then you can more or less leave it alone. These cases are fairly rare though.

Approach 2: “Adapting” it into the Japanese Culture

• The adaptation approach aims to bring the same meaning to life in Japanese as a copy line that stands on its own without any mention of the English mother line
• You usually create a variety of alternatives that range between being direct translations on one end of the spectrum, through to ones that take more license with the original meaning on the other, but might push a resonant button among the Japanese target (see option 3 below)
• The closer you are to the direct translation end, the more it feels to the audience like a direct translation, and this serves to emphasise the foreignness of the brand again.
• What usually happens in this scenario is you are able to hit on a copy line that more or less says what the original English line says, but it does not resonate as much as the original does in English, but the way a lot of brands think this is an acceptable price to pay for global consistency and feels like a safe choice
• The more license you take the more chance it has to resonate and feel like a made-for-Japan communication, but at the cost of consistency with the brand globally, causing unease for global brand managers
• Localising the tagline but then applying it to creative assets (such as TVCs, transit ad creative, web assets, etc) that have not been adapted or transcreated themselves leads to communications that do not quite add up to the local audience.
• If a brand has the local resources to develop local creative assets then I would usually be recommending the 3rd approach below, but these lines are blurry, and there are examples where this adaptation approach has been very successful.
• Foreign brands should not be trying to become or act like domestic Japanese brands, but rather to find a way to leverage their foreignness to give them an advantage over local competition (e.g. aspirational, innovative….), since the local players will usually always win on grounds of familiarity. Hence retaining an element of the global campaign is often a vital ingredient, not simply an acceptable compromise, and this would apply to Approach 3 below as well.

A priceless example

The Priceless tagline / proposition for MasterCard started off as a campaign but has more or less been woven into the fabric of the MasterCard brand as a permanent part of its identity. In general all credit card brands assert that when you pull out your credit card the brand name on it says something about who you are, and prestige often bordering ostentation is the traditional territory of the category. In contrast MasterCard’s agency developed this brilliant proposition:

“There are some things that money can’t buy. For everything else, there’s MasterCard”

The insight behind the campaign is that there are special moments in life, often serendipitous, usually shared with loved ones, that no amount of wealth could purchase. For a credit card brand (= access to money) to be dramatising this insight shows that the brand understands that there are more important things than itself. This implies that it is magnanimous, humble, and big-hearted, traits that many people would prefer to have associated with themselves. And besides the prestige can be communicated through the creative execution itself. It also taps into the post-80s/90s materialism sentiment that in fact luxury is at heart experiential, so it was and still is very much “of its time”. Copy lines never really work in isolation, and the high-end feel of the execution adds “luxury” attributes to MasterCard’s brand image.

“There are some things that money can’t buy. For everything else, there’s Mastercard” – Priceless Campaign localised to Japanese

The creative device evolved to become a very simple set up stating the price of an experience or thing, but then trumping it with an emotional outcome, which is “Priceless”. The simplicity of it is the hardest thing to adapt into Japanese, and actually this is always the case. The best copy lines or creative devices are sort of hacks of the language that manage to say something profound and impactful in a very simple way.

The only way to adapt this into Japanese AND retain the original meaning is to spell it out, but to find a copy line that does it in a relatively short and elegant way, and I believe they succeeded with “お金で買えない価値がある”, literally “there is value that cannot be bought with money”. MasterCard actually retain the English word “Priceless” as a branding device, more than because they assume their Japanese target would understand what it means. Many will not, but it becomes another branding device that adds value to the brand through repeated use.

Approach 3: Transcreation of the Concept into the Japanese Culture &Psyche

• This approach aims to take the DNA of the idea, and find a way of bringing that core idea to life within the Japanese psyche or culture in full knowledge that this will take it away from the original meaning.
• In terms of the creative development process it amounts to going back to the creative brief, rewriting that, effectively adapting that, and then starting afresh with the creative development working with Japanese planners and creatives.
• At that point what makes it the same campaign? Just how far can you strip a campaign back before it becomes something different? In fact, how far can you strip a brand back before it becomes something different?
• In its purest form the best creative briefs define the emotional response that you aim to elicit and empowers the creative process to press that button, which is always going to require language and culture-specific communications.
• Since the emotional responses of humans are universal, a creative brief stated in these terms and accurately translated into local languages can be the bedrock for a brand that plays in the same emotional territory wherever it is advertised in the world.
• To my mind this is the ideal approach since if a brand does not strike an emotional chord with people in a market, it will always be hobbled and less robust as a global brand because of it.
• However, the stimuli that will elicit the same desired emotional response will differ culture by culture, potentially target segment by segment too. This fact alone goes a long way to explaining why adapting brand strategies to multiple markets is such a tricky process.
• Usually you do not have or in fact are not able to strip a campaign concept to such bare essentials, for various reasons. For instance, the global client just does not have the bandwidth to get into the conceptual nuances in foreign markets. It is, after all, just one of many they have to manage. It is certainly true to say that the more they trust their local brand and agency teams, the more likely they are to allow the brand to be transcreated.

Semantic Ambiguity

One of the things you learn from working in the adaptation and transcreation areas a lot is that really good copy in any language leverages ambiguities implied by the choice of words to claim as broad an emotional relevance as possible while still “feeling” sharp and precise.

A good example that is close to my own heart is for the brand Indeed, the world’s biggest job search site, and adapting its global brand platform “How the World Works” into Japanese for its Japan market launch campaign, developed by our colleagues at MullenLowe in Boston.

The genius of this tag line in English is that it is a familiar expression that implies wisdom and knowledge of a complex human system, but by matching it to the context of recruitment sets up a double entendre with its literal meaning of how people find work, which is of course the raison d’être of the Indeed brand. The sharpest of communication strategists among you will have noted that this is an inherently flexible device since it says “we know how the world of employment works”, and, by inference, how to get you the right job, or to the companies recruiting the right candidates, but it does not say what that “How” is. The “how” comes in via the creative.

With the Japan launch of Indeed in 2015 the “How the World Works” campaign, which doubles as a brand tagline, was transcreated to carry a similarly powerful emotional evocation: 「その仕事が、世界を動かす」which back-translated says, “work that moves the world”. Brand positioning connoisseurs will have already noted that the savviness double-entendre is not retained in this transcreation, and instead emphasises what is more emotive connotation to Japanese people, the idea that your work has a higher purpose in the societal sense – a core brand value for the Indeed, although one that is not made explicit in its English tagline. If there is an intended ambiguity, it is in the way that 「世界」in Japanese can been both “your world” and “the World”, which was exactly the range of mental scales that we want the brand to transcend.

As someone who works across Japanese and English everyday, I am tempted to believe that the Japanese language, because of the unique way it has evolved as a sequence of assimilations of foreign languages, is extraordinarily flexible in the options it gives copywriters to play with, an unprovable theory that I intend to explore in a future post.

Approach 4: Stratified brand platforms

Is there a 4th approach? Actually, I think there is. It is where the international brand’s communications are stratified into global creative, usually in the approach 1 or 2 adaptation approach, usually projected through traditional media like TV. But then in other “high touch” channels like social, digital engagement and event-based promotions, the approach is closer to approach 3), being highly contextualised. This is often also very pragmatic given the centralised structure of many global brands, since seeing the same TV ads go out in all markets is very reassuring to those brand stakeholders who are not necessarily engaged in the nuances of international market cultures, but allows the freedom to the more ‘under the radar’.

A good example of this hybrid approach is RedBull, at least for the first few years after they launched in Japan, when they ran the global “Gives you wings” animated TV creative but simultaneously built out their extreme-sports & music-based engagement programs. It is my impression (I am not a RedBull expert) that now as a mature brand in Japan they have dropped the “gives you wings” TV work and have built out their extreme sports and music platforms into the dominant local brand-building platform, and very effective it is too.

Photographer Credit: Jason Halayko/Red Bull Content Pool

Idealism vs Pragmatism: what is the true path?

Ultimately I do not believe there is a single “right way” since brands exist in the real world where budgets and mental bandwidth can be constrained, and so I can accept that any of the 4 approaches above could actually be the correct choice for the organisational context in which the decision is made, and all of them can work. But from the point of view of someone like me who loves to help brands resonate, flourish and become the transcultural conduits of fresh ideas and compelling propositions, approach 3 is the most exciting to be part of.

The post The Art of Localising Brands to Japan appeared first on James Hollow's Blog about Hybrid Thinking.

A cylindrical gift is wrapped beautifully in a Japanese department store

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4 or 5 years ago Facebook’s strength was seen to be the number of ways OTHER than advertising it could monetise its users, at least from the point of view of tech industry savants and savvy investors. Now, post IPO and obligated to maximises profits for its shareholders, Facebook is riding high on its advertising revenues, comprising over 90% of its total, and the tools it provides to its ad publishers like us are getting better all the time. Social game-derived revenue, the promise of social gifting.. all these have fallen by the wayside, and worryingly both users and advertisers are concerned about all the noise in the timeline and the fact that brands and users’ aims are often at odds on the platform.

LINE is making a ton of money, albeit not yet on the scale of Facebook, but its revenues are growing ~20% quarter-on-quarter and it seems that less than 20% of it is coming through brand sponsors, and a good chunk of that is from branded stamps, typically the mascot characters that have been adapted and expanded into a full spectrum of emotive icons.

Branded stamps are a great example of the sort of “willing complicity” that those of us in the advertising industry love since a platform imbibed with this spirit provides the fertile soils in which to nurture positive, 2 way relationships with users. The rest of the sponsored content is basically opt-in newsletters, which can also contain fun and entertaining content, but typically are driven by retail coupons. In other words, LINE has an opt-in Groupon-type model inside it. Again, more brand-user complicity. And blocking updates from brands is as easy as you like.

In contrast to Facebook, LINE makes the vast majority of its money through game sales and non-brand stamp sales, and recently opened a creators market for stamps, analogous to what Apple did for apps with the App Store, discussed in detail in this recent post “The App Store Gold Rush”. Establishing a creators’ marketplace, like an app store, or like YouTube channels combined with content discovery engine, turns the 2-way dynamic between sponsors and users into a triangular one, that Facebook does not really have, but which is really valuable in maintaining a healthy culture.

YouTube seems to be the biggest advertising platform that has got this balance right. Since day one YouTube has understood that they are only as strong as their content creators are motivated to contribute to the community, and the way they share ad revenues with those creators, not to mention hold award shows and put on fan events for them, is the most powerful example of the “attention economy” model that the world is shifting towards.

Right now I would guess that it is the YouTubes and LINEs of the world that own the future, and Facebook is going to burn out and fade away within the next 5 years, and it this idea of willing complicity between users and the platforms’ way of monetising them that is key to long term success. Snapchat would do well to take note if they want a long-lived popularity. Of course if short term profits are the objective, they may have different ideas.

The Campaign Asia article:

Still from a Snapchat promotional video

“It’s the first time we’ve done anything like this because it’s the first time we’ve been paid to put content in that space,” the company said on its blog. “It’s going to feel a little weird at first, but we’re taking the plunge.”

The sponsored post for the film Ouija was edited specifically for the platform to mimick a Snapchat story.

The ads are optional; users don’t have to watch them if they don’t want to. They also disappear after viewing or within 24 hours, just like Stories. Users have no choice when it comes to receiving the ads, but unlike the approach chosen by Facebook, Twitter and Instagram, the ads do not play automatically.

It is unclear when Snapchat plans to roll out to other markets or how exactly it charges for ads. In its blog, Snapchat stressed that it wouldn’t put ads in personal communication, things like Snaps or Chats. “That would be totally rude,” the statement said. “We want to see if we can deliver an experience that’s fun and informative, the way ads used to be, before they got creepy and targeted.”

“As Snapchat starts down the advertising path, it needs to make sure that it creates a culture in which advertiser and users’ wishes are aligned,” said James Hollow, president at Lowe Profero Tokyo. “The way YouTube have succeeded in doing, and Line seems to be trying hard to sustain.”

According to Hollow, post-IPO, Facebook is riding high on its media revenues, but both users and advertisers are concerned about all the noise in the timeline and the fact that brands and user aims are often at odds.

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Previous memoir episodes series have described how we cracked the code for making content-based promotions in Japan (as with the Puchi Bruce campaign for Die Hard 4.0 explained here), or how we got a taste for building technology solutions (as with the iTunes blogparts explained here). But no account of this period in the late noughties would be complete without documenting the disruptive rise (and rise…. and rise…) of the iPhone, and thence the smart phone, and it certainly had a big impact on the Alien-Eye business too. Zooming forward to 2014 as I write now as Lowe Profero I am sure that more than half of what we output is experienced on a smartphone.

It is hard to believe now with the recent launch of the 5.5inch iPhone 6 that the first iPhone was basically an iPod with telephony. Through our involvement with iTunes we were very much aware of the significance of Apple’s ecosystem of digital content across devices being extended to mobile phones, but we could not have imagined just how disruptive the App Store would be, creating an open market place for software.

As described in Chapter #1, when we set out on the Alien-Eye journey we expected the Japanese mobile carriers to enable an open mobile contents ecosystem, but this was in hindsight very naive of us. So although the bedroom creators and hackers got busy making Flash movies and games that could be freely distributed on the web, they did not have a platform geared to surface and popularise the most creative and original to a wide audience, and mobile content distribution was closed / locked down completely by the close-minded carriers. There certainly was no platform with the allure of coding for a new domain of interaction – the touch screen, combined with accelerometers, GPS and cameras all in one app.

YouTube proved to be that creators’ platform for video, complemented here by the distinctively Japanese video platform NicoNico, but no one could have predicted the phenomenon that was the gold rush onto the App Store, although I am sure some claim they did. All of a sudden designers and videographers, university students and ICT teachers alike were learning to code in C+. We certainly did not miss out either, and the constant stream of mobile app development projects, firstly for iOS, and then for iOS & Android, helped grow and sustain our in-house development team through to late 2011, when as previously lamented on this blog, we admitted defeat on a coding team without scale.

The first iPhones in Japan

Our first iPhone app project happened astride New Year 2007 > 2008, which was even before the first iPhone’s came on sale in Japan in July 2008, and was the first iPhone-related campaign of any kind to my knowledge. We were so desperate to get in on the act that we had someone bring us 3 iPhone’s from Hong Kong that we developed and tested on before promptly handing them to the winners of a travel blogger competition we ran to promote Chile as a tourist destination.

Applicants had to reply to the question “Why I want to go to Chile”, and having been seeded skillfully into young adventurous travel communities in Mixi this contest generated over ten thousand inspiring reasons to do just that, all in the persuasive and credible words of real people, creating a viral mechanism around the campaign. The winning trio were then sent to Chile, armed with an iPhone each and a suite of GPS-aware apps we hacked together to live blog their way around Chile’s stunning locations with instructions to take loads of pictures, and micro-blog about all the fun they were having. These posts were uploaded directly to open community platforms like Twitter as well as auto-aggregated into a live-stream campaign site that we set up.

Chile Tourism Campaign that was made possible by live blogging from GPS enabled apps on an early iPhone

All of this content, as well as the social media buzz, combined with the blog and travel news site coverage of the contest successfully transformed Chile’s online presence and positioning as a destination for young independent travellers. One of the most satisfying aspects of this project was that it fixed Chile’s SEO problem in Japanese. Until that point a search for Chile would yield pages of results relating to either ‘ebi-chili’ recipes, the popular chinese spicy prawn dish, or else the Red Hot Chili Peppers, since both contain the same two katakana characters “CHI-RI” as the country, and are searched for more frequently. Finally, and thanks in some ways to the iPhone, Chile was visible on the web in the Japanese language.

Today the Japanese app store is the most lucrative in the World, for the first time topping the US’s app store revenue in 2013, and now with Android going strong too, sales of game titles on smartphones are fuelling multi-billion-$ game companies’ IPOs and really killing consul makers like Nintendo with it. But back in 2009 when the iPhone sales had just about given the platform enough scale for businesses to take a serious look at it, things were more open and explorative.

Before there were apps, there were….

Our most complete experience with the App store came through a partnership with Tokyo-founded Cerego Inc, and their English learning platform iKnow!, previously named Smart.fm, but because we had already been active on another Apple-popularised platform, podcasting, we were able to adapt our way into apps in effect.

Over 4 or 5 years of working with Cerego I personally enjoyed numerous close working relationships through which I learned an awful lot, and several of those live on as cherished friendships, but it was co-founder Andrew Smith Lewis who brought us in initially and, with his eye for seeing a chance to create eye-catching spin-offs that made the core platform more convivial with the big wide web outside, was an essential supporter and advisor to all the projects we worked on together.

The partnership with Cerego had flourished during 2008 & 2009 thanks mainly due to the amazing success of a podcast program that notched up 10m downloads in its first 2 months after launch and was featured as top podcast in iTunes Japan’s “Rewind 2009” ranking.

The brain child of a talented and passionate Italian multi-media designer, Francesco Romano, he first conceived of the idea of creating podcasts that streamed the multi-media vocab flashcards as a smooth audio-visual experience while he was still working at Cerego. But the company’s focus was elsewhere and so they never got made. Some time later, and for various reasons everyone agreed, including Francesco himself, that he would be better off in the more diverse cut and thrust of the Alien-Eye working culture, and so we got to nurture his podcast idea among many other of his inspired creations.

Enhanced podcast format that used chapter images to create a simple interactive English learning flow c. 2009

Francesco’s podcast hack relied on using the chapters feature in the podcast format, fitting one vocab item plus its accompanying image for each chapter, with audio files playing the audio file for the word, another chapter was used for an example sentence with its audio and image. We could control how many such items we stringed together to make up one podcast. These were interactive to the extent that users could skip between chapter points, although it seemed that most played them hands free on the train commuting.

But how to publish these efficiently? Another invention hooked the old and more hackable version of Garageband, amongst other things a podcast publishing software, to suck in the learning content data from Cerego’s databases and spit out beautifully designed audio-visual podcast.

In this way, Francesco, together with one of Cerego’s own prolific developers, Zev Blut, could generate hours of valuable learning media at will. This “enhanced podcast” format was a game changer on the podcast rankings, since all of the competing pods had to be made in recording studios with costly voice talent and audio engineers. We could produce high quality content much faster and cheaper than anyone else, so we were able to absolutely dominate the rankings. At one point we had 3 separate series created in this way occupying positions 1, 3 and 5 on the all Japan chart, and occupied #1 for most of one year.

To me this is a great example of a “growth hack”, a topic I have spoken and written a lot about in the years since, e.g. this post about growth hacking talent, and Francesco’s approach to turning his vision into reality by thinking fluidly and adaptively across technology platforms illustrates the required mindset.

The app store comes of age

So the first generation of the Smart.fm iPhone apps were based on the enhanced podcasts, but also included games and other interactive features that were developed and improved in later versions. Cerego entrusted us with creating and running this nascent off-shoot of their business, overseeing it of course, but allowing us to design everything, from the product itself, the naming, pricing strategy, promotional activity. We hired an app developer over from the US, Brett Gneiting, who we tracked down after he had been a prizewinner in Cerego’s API competition a year or so previously and he and Francesco formed an awesome UI/UX > coding partnership.

We really embraced this opportunity to take ownership for the performance of a business vertical, and the longevity of the partnership speaks to its financial success, riding the wave of popularity of each iPhone release and all the attention the App Store garnered, bringing in significant revenue for Cerego and keeping us honest too.

One of the most rewarding aspects of having ours hands on every element of the product and marketing strategy was the ability to apply strategic ideas and see very quickly and directly whether they worked or not. When you work on big brands in an agency with a bunch of smart, opinionated marketers you always look at the strategy and think you could write the script better: the client got the naming wrong, or screwed up the pricing strategy, or did not position it in the opportune way; but usually you are not able to change those core elements, and even if you could it would take a relative age to see the effects.

So the app store was almost like a microcosmic market simulator with very rapid and dynamic feedback, so we could tune all those things together with the smart folks at Cerego, Andrew Smith Lewis and Russ Moench in particular, and work out what worked best. In fact it was such an intensely industrious period and we cut our teeth in so many different ways that it spawned a host of different skill sets that we were able to offer to other clients, from short snappy promo videos like these for the first app series, we developed a whole app / web service identity design and positioning strategy offering off the back of this period, and over all it gave us a lot more confidence in our convictions as marketing strategists.

News entries on the Alien-Eye homepage for successive app generation releases c.2010~11

Cerego has developed an extensive and high quality corpus of learning material, and that is what we leveraged for the iPhone and later Android apps. But its secret sauce is when this content gets hooked up to its proprietary learning engine algorithm. For various reasons this could not be encoded into a standalone app, but once Cerego re-booted it’s backend for the cloud era and rebranded as iKnow! made their push as a truly web 2.0 service they were able to provide a seamless experience for their growing paid user base across all devices, and it made sense to phase out the stand-alones. However, the success of the app store partnership set up perhaps an even more empowering collaboration with Cerego that will be the subject of a future memoirs post I suspect.

Over the 2 or 3 years between 2009 and 2011 all kinds of brands were commissioning apps from us, IBM being another noteworthy one, and other agencies too of course. Although I am proud of much of the work we did, most of these programs became forgettable for one of two reasons.

The first was under investment in initial promotion versus development. There would be an intent to make the initial functionality as awesome as possible, leaving little of the inevitably limited budget to launch it properly. It would have been better to get to minimum viability quickly and cheaply and then test the water, but few brands are setup to think in this way.

The second was lack of sustained intent and investment. Like puppies, an app is for life, not just for christmas. Actually, an app is an investment in an engaged user group or audience, and you need to keep improving and developing your app in order to nurture and grown that user group. Marketing departments are sadly not usually empowered or else of a mind to embrace this sort of opportunity.

Since the gold rush era the “I want an app too” effect has warn off, we (now speaking as Lowe Profero) are still developing apps, but they are typically business critical ones, and we have several hundred top class developers to code them. Examples would be a members app for the multi-billion Euro fashion EC businesses like ASOS; the order for app Dominoes Pizza; the loyalty app for booming restaurant franchises like Guzman y Gomez…

The truly cloud-based service models like Cerego, whose team’s live and breath features, UI and UX across all platforms because they are the difference between business success and failure, have in general brought the development in house as you would expect, and so after 2012 we helped them in other ways.

News post on Alien-Eye site on the sad passing of Steve Jobs.

And the app store itself is not the playground of tinkerers and hobbyists that it was in the early days when a developer in her bedroom could create and market an app and earn a million bucks in a month due to the inherent scaleability in and buzz around the marketplace. Some of those early entrepreneurs now run scaled up business around the app store, but most of them have been squeezed out, no longer able to get any visibility as big software and gaming companies have weighed in.

Actually the reasons for the minnows getting squeezed are probably as much to do with the ever increasing number of devices and iOS versions that apps needed to support, and that only got worse when Android swept into Japan. Towards the end of our partnership with Cerego on the app store in late 2011 we really felt this. In the early days of the App Store there were only a few handsets (iPods, iPhone, iPhone 2) and similarly few iOS versions. As Apple released each new wave of iPhones with bigger screens and new iOS versions with new capabilities the development resource required to keep up swelled.

This evolution suited Apple and the Android device makers just fine, since it put more pressure on users to upgrade to the latest model phones, (where most of the revenue is for Apple) and big gaming titles on the App and Play store dominate revenue anyway. So the gold rush with its long tail of entrepreneurs panning for gold came to pass on the big revenue-mining companies moved in. Such is the way of the world, and with its passing Apple too became less of a darling of the creative community, which loved the openness of the early app store. Steve Jobs passed away in October 2011 accompanied by much grief and sadness among us as well as so many others. Perhaps that was the date that marked the end of this chapter for us too.

The post Becoming a creative hybrid – Tokyo Memoirs Chapter 6: The app store gold rush appeared first on James Hollow's Blog about Hybrid Thinking.