Japan has long been at the forefront of mobile communications, and today an estimated 94 percent of the population (aged between 16 and 59 years old) owns a cellphone, according to research by Netratings, Nielsen’s associate company in Japan. In addition, more than half of Internet users in the country also traverse cyberspace through their mobile phones. Despite an obvious affinity for mobile devices in the country, smartphone uptake in Japan has lagged compared to other parts of the world — until very recently. Now that iPhones, BlackBerrys and Android handsets are taking off, companies in the country are increasingly using the platform to reach out to their consumers.
Nielsen and Netratings recently facilitated a workshop at ad:tech Tokyo with leading industry players to better understand how companies are responding to these changing dynamics in the mobile ecosystem. In particular, the workshop sought to shed light on how companies are engaging with consumers and their views on the potential of these devices in the future. Led by Yoshiya Nakamura, Senior Analyst at Netratings, the panel included Jun Wakabayashi of Suntory Holdings (one of Japan’s leading beverage companies), Ryosuke Takahashi of Yahoo! JAPAN and Mire Tanaka, Head of Nielsen’s Telecom Practice Group in Japan. Three key themes emerged from their discussion:
Be relevant to smartphone users: Companies need to develop apps that can satisfy a need-state of consumers while promoting its business at the same time. While games are among some of the most popular apps on smartphones, they may not be the most appropriate vehicle for a company. Mr. Wakabayashi described how Suntory’s first foray into the app world was via a game. While it was a popular download, it did not lend itself to being used on an ongoing basis. Suntory’s second entry into the app market was BAR-NAVI, an iPhone/Android app that enables users to find bars, lounges and nightclubs that are located in close proximity to users, along with information such as maps, contact information, ratings, ambiance and operating hours. BAR-NAVI is a natural complement to Suntory’s business, and it is no surprise that the app has become quite popular as it appeals to users’ lifestyles and needs as well.
Yahoo! JAPAN is already one of the most popular “start-up” pages on PCs and feature phones, so it is only natural that the company would seek to encourage smartphone users to select the portal as their home page on these devices. The company is also in the process of adapting its mobile portal for optimal performance on smartphones.
Nielsen’s research in the U.S. revealed that once consumers download a company’s app, they tend to continue to engage with it in a few important ways. The most popular activity was to apply for a reward program (43%) while locating shops/outlets followed closely behind (41%). As telecom usage trends in Japan tend to follow those in the U.S., apps abetting consumers’ buying processes are likely to be popular in Japan as well.
Measurement is key but getting the right metrics is vital: Although companies have been using apps and online advertisements to reach out to consumers for some time, measuring the effectiveness of these media remains in its infancy stage. Suntory, for example, currently measures the number of unique users and page views, but not other user information that would enable it to better target consumers. Yahoo! gathers more expansive data, but when it comes to apps, they indicated that key measures would be unique users, time spent and frequency of use.
Nielsen has already begun installing measurement meters on mobile devices in the U.S. and Europe which enable the collection of a range of data such as when calls and texts are made and when and how apps are downloaded. This method provides a more accurate set of information on how consumers use their mobile devices, compared to a survey. Likewise, on-device meters would provide a stronger measurement of consumer behavior in Japan.
Multi-screens are the future: While Japanese consumers may just now be embracing the smartphone in a bigger way, they are also buying tablets and using them to browse the Internet, download apps, play games, watch videos and send email, among other activities. Nielsen believes that many trends (consumers’ usage of mobile devices) seen in the U.S. will also be observed in Japan in the near future, such as simultaneous use of media/internet-enabled devices. For example, in the U.S., Nielsen found that 40 percent of smartphone and tablet owners use these devices while watching TV at the same time. Consumers’ appetite for content is growing, and they will increasingly use “up-and-coming” devices like tablets to satisfy this need, anytime, anywhere.
“As Japanese consumers continue to embrace mobile media, opportunities abound for companies to get closer to their consumers via this channel. The experiences of companies such as Suntory and Yahoo! JAPAN demonstrate the need to know consumers better than ever before and create meaningful and fun ways to connect with them on mobile devices like smartphones and tablets. While both companies have successfully found ways to engage their consumers, an enhanced set of measurement tools and metrics will enable any company to leverage the mobile platform even more effectively to grow their market share in the future,” said Nakamura.