The Future of Digital Marketing: The Case Study of Japan and South Korea

Introduction

The world of digital marketing is very versatile and constantly changing. Whether an entrepreneur or a business outfit is already immersed in the landscape or is looking to dive into it soon, it is imperative to keep tabs on the latest trends. In addition to being good practice, it allows business outfits to be of benefit to clients and associates. Just like any other form of marketing, digital marketing is always changing. The era of relying on billboards, print magazines, and television for business marketing with the idea that they alone can attract enough customers for a business to succeed are gone.

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Not long ago, businesses became successful by explicitly displaying their products or services, convincing potential consumers how they would solve their problems, and constantly giving the impression that they were better than competitors. Today, people trust fellow consumers more than they do direct brand advertisements. In a way, businesses are trying to understand that consumers are not interested in buying something that is obviously advertised as a product. Each day, business organizations are coming up with new ways of making consumers feel as if they want their products or services. Even better, they make it look like they actually need them. People want to make their own decisions and purchase what they desire for personal reasons. More than 70 percent of all consumers usually consult social media before buying something. Such a situation implies that they often want to first have an idea of what others think.

Digital Marketing in Japan

Japan appears to be lagging behind in the digital marketing evolution. Japanese companies and business outfits are having a hard time keeping up with consumers' fast-paced shift to the social media. There are new marketing strategies that will assist marketers evolve so that they can match changing consumer behavior in this digital age. Most businesses, if not all of them, are aware that they have to quickly adapt to such consumer changes. However, according to recent data, Japanese companies have not yet caught up with the digital shift by consumers. For instance, data collected in 2014 shows that the amount of money spent on advertising via digital media by companies in the country is significantly lower than use of the same media by consumers. In addition to facing obstacles in evolving the process of marketing, they also have to contend with structural bottlenecks within the organization. Marketing firms are facing several challenges irrespective of industry or region.

A notable challenge facing Japanese companies is an organization structure that is too oriented towards convectional marketing. To market in the digital era, there has to be awareness of the numerous different ways in which consumers engage with manufacturers across various media channels. Modern marketing tools make it possible for marketers to get performance data in real time. Such a situation allows them to make decisions more quickly and optimize their marketing budget with better flexibility. However, the average Japanese company has a vertically structured organization that is characterized by a rigid, pre-determined media plan as well as an implementation schedule. This makes it quite difficult to act fast and with flexibility when implementing insights from marketing assessments. Historically, most Japanese businesses have always applied well-defined strategies to plan and carry out advertising campaigns that rely too much on convectional media such as television. Also, sales events and promotions have their own set of resources and processes that are independent of television.

The other digital marketing challenge facing Japanese companies involves assessing marketing ROI with inconsistent performance indicators. Advances in digital marketing have made it possible for marketers to have an idea of the ROI for certain marketing spend. However, Japanese companies are having a hard time figuring out how to define the success of a marketing campaign, or which marketing indicators to use. For instance, gross rating point (GPR) is used in television advertising. It shows the amount of money to be spent on TV ads as well as how much was spent previously. GPR is widely used as the industry's standard despite the fact that it does not necessarily indicate the impact that the ads have on consumers. Several indicators are used as metrics in digital advertising, such as the click-through rate (CTR), cost per action (CPA), tweets, and likes. Even with so many indicators to consider, none of them present an overall picture of total investment, making it difficult to decide which one is the best.

Digital advertising often requires constant assessments of its result and effects due to the huge amounts of data and relative recent entry. Without a standard and well defined definition of metrics, it becomes quite difficult for marketers to understand and evaluate the outcome of digital advertising. Hyper-targeted ads directed to just a small group of consumers in an effort to create maximum impact are usually the norm. Such ads may give marketers the impression of small-scale investment with little or no impact when compared to the reach attained by mass media. Such kinds of barriers are preventing digital advertising from making inroads across Japanese marketing firms.

Lack of enough resources and digital-savvy professionals is another problem facing Japanese companies. Many of marketing professionals in Japan today built a career based on convectional marketing strategies and execution. Such a situation results in a small number of marketers with an advanced knowledge of digital technology together with the ability to practically apply it in marketing campaigns. Applying digital technology in advertising requires a different skills set when compared to the more entrenched mass media. These include frequent analysis of huge data amounts, drawing insights from the analyses, and development of engaging content that consumers can access irrespective of the format or size. Most Japanese companies tend to outsource the 'digital aspect' of marketing to specialized firms, particularly when it comes to the creative part of business. However, not many creative agencies have professionals who can develop ideas for notable marketing campaigns based on their expertise in digital technology.

Another challenge to do with resources has to do with purely digital marketing approaches. For instance, consumers can decide to access social media during certain times of the day. This would require marketers to seek them out during specific moments in order to engage the brand effectively. A good example is the case of alcohol consumers who access social media on Friday nights and actively share information during that particular period. With this in mind, manufacturers of alcoholic drinks have to get a digital marketing team to work at that specific time, which can be quite inconvenient.

A complex and restrictive blend of digital media and resources is also to blame for japan lagging behind in digital marketing. Very few executives in Japanese organizations know how to use the latest digital devices. An even less number is aware of the various digital media and how to interact with it. For marketing executives to fully understand how marketing executives interact on social media, they need to possess a firsthand knowledge of digital technology. The number of moments and ways in which consumers seek out brands increases as more devices and content are supported by those particular brands. Such growth significantly increases the number of ways in which businesses can reach consumers. If there is no keen understanding of these options, it becomes quite difficult for marketers to prioritize the ones best suited for a company in any given campaign. As mentioned earlier, digital marketing is always evolving. This means that marketing executives have to be on the lookout for the latest trends and be open minded to the requirements of their marketing campaigns.

A 'digital leader' can be defined as a company that is creating business impact by utilizing digital technology in its marketing campaigns. In the Asian-pacific region, the average percentage of digital leaders in each country is 19 percent. In contrast, Japan only boasts of 8 percent. There are a number of reasons as to why Japan has such a low number. In order to fully capitalize on the advantages of digital technology, it is important to have a rounded view of all marketing endeavors and have the ability apply digital strategies where they are most effective. For instance, data gotten from interactions between a manufacturer and consumers can offer new insights once it is analyzed. However, if the company is vertically structured and disconnected, the data gathered may be fragmented and incomplete. Such a situation leads to a limited ability to get new insights and come up with a viable marketing strategy. Most business organizations in Japan have such characteristics.

The biggest problem facing Japanese companies is their vertical structure and absence of a shared purpose. Collecting knowledge and utilizing experience is not being done in the right manner. The top management in an average Japanese company shows little or no concern for scarce resources. Also, they do not think ahead about digital marketing and prepare the teams for it. They have a hard time changing the way they have been doing things over the years. It is difficult to motivate people to make changes given that that there are a lot of reasons not to embrace change. Business organizations in Japan need to recognize that digital technology is a key strategic component if they are to succeed. That knowledge should be shared across their marketing teams and applied to daily activities.

Digital Marketing in South Korea

South Korea has been one of the top nations in terms of internet connectivity and broadband speeds for years. This means that the average internet user in the country has some experience in interacting on cyber space. The country has established a distinct online culture as evident in the fact that the most prominent internet service providers are local companies such as Daum by Kakao and Naver by NHN.

South Korea is often overlooked by brands trying to make inroads in Asia considering that it is not the same scale as China and does not have Japan's storied export history. What these brands don't realize is that, if it adopts the right strategy, the country can be a haven for advertisers. South Korea has more than 44 million internet users, making it fifth largest market in the continent. Digital marketing is capable of reaching a significant portion of the population thanks to the market's internet penetration amounting to 85 percent. There are a number of distinctive features that make this market quite attractive for e-commerce. They include the country's high and stable gross domestic product (GDP) which happens to be the fastest growing over the last couple of decades. South Korea has a comparatively stronger comparison rates for various international brands, at some instances being 166 percent higher than those of China. The country has lower cost per clicks (CPCs) when compared to other regions in the Asia-Pacific. Various products are often more expensive in the region, but Koreans are smart enough to compare prices online and buy from overseas brands in case they are cheaper.

The combination of cheap CPCs, a rather high conversion rate, and high levels of disposable incomes make South Korea to be among the most attractive B2C (business to consumers) e-commerce markets in the world. In fact, it ranks within top...