Last night was the launch party of CGM Marketing. It is a joint venture between Digital Garage, Asatsu DK, Dentsu and Cyber Communications (CCI). (Press release)

I co-founded Digital Garage in 1994. My little web/IT company called Eccosys made a joint venture with and later merged with the Garage group headed by Kaoru Hayashi. The Garage group was involved in advertising, marketing and content. We were their little Internet engine that could. In the early days of Eccosys, I had been talking to Yahoo about doing Yahoo Japan. After Softbank invested, it was clear that I wasn't going to get to run Yahoo Japan. I was offered 1% of Softbank Japan by Masa Son, but I turned it down. (Maybe I should have taken it. ;-P) Soon after, I was contacted from a friend at Infoseek about starting Infoseek Japan. We quickly shifted gears and started getting Infoseek Japan up. Softbank set up a joint venture with Dentsu, the #1 ad agency in Japan and called it Cyber Communications. They were tasked with figuring out how to sell ads on Yahoo Japan and interfacing with the agencies. We turned around and got Hakuhodo the #2 agency, Asatsu the #3 agency, Daiichi Kikaku, Yomiuri Kokoku and Daiko and created the Digital Advertising Consortium (DAC). In aggregate, these ad agencies approximately equalled Dentsu in size.

Infoseek had pioneered the idea of CPM ads, selling inventory based on impressions. At the time, none of the ad agencies liked the idea or thought they could sell it to their customers. They understood television GRP, but it was really a measurement of effect. The notion that you could sell ads by how many people actually viewed it, instead of the "value of the spot" was sort of a non-starter. We set up a study group/feasibilty study period for six months where we had people from all of the member agencies come together and talk and learn and eventually try to explain to sales teams in their respective groups. Infoseek launch around 6 months after Yahoo Japan, and we launched with a healthy rotation of ads.

Eventually, Internet ads were a big success and and CCI and DAC are now both public companies. Infoseek Japan now lives inside of Rakuten and is still one of the top portals in Japan, outliving the parent which was purchased and smothered inside of Disney.

In reflection, Infoseek and "home pages" didn't take off in the way I imagined. I thought we would have a lot more personal publishing. Instead, we ended up with big sites that were for all practical purposes, professional media sites. I had dreams of "the death of advertising" 10 years ago and had thought that personal publishing and targeted advertising would disinter-mediate some of the lying and stupidity. We didn't get that far.

So here we are - blogs, wikis, tags, Technorati, RSS/Atom, and the web looks a lot more like what I had envisioned 10 years ago. The online ad business is more innovative than its old media counterpart, but it has become mostly an inventory/sales business. So lets try this again. This time, we decided to hook up with Dentsu the #1 ad agency, Asatsu the #3 ad agency and CCI, the competitor to the company we set up to sell Infoseek ads.

Although I don't like the word "Consumer" in the "Consumer Generated Media Marketing" name, the idea behind this company is to try to take it the next step. (I wish we could use "user") At the first meeting yesterday, I said that I thought that advertising, PR and marketing would converge into "communications". That companies that created or improved good/great products would communicate with their users and that it was about getting involved in the conversation. It was not about spending money to force yourself in front of people who didn't want to hear about your message. It was also not about charging people to participate in "content". It was about people having conversation and about companies knowing when, how and where to say the right thing so that they contributed to the conversation and were welcome in it.

Clearly, the first step is to figure out things like ads that are smart about blogs, tags, time, context. It is also about treating the blogger and the advertiser equally where the ads reflected the desire of the person having the conversation as well as the desires of companies to participate in them.

I was saying all of this in a room full of ad agency executives. It is always sort of funny talking about the end of people's businesses. On the other hand, many of the senior members there were the same guys I was talking to 10 years ago trying to explain CPM and banner ads. I felt privileged to be allowed some suspension of disbelief as well as some trust that we'd try to figure out where the business was. (I don't think anyone REALLY thought that DAC was going to become a public company 10 years ago.)

I think the world is more complex than back in the Infoseek days, but we have a lot more experience and trust this time around. It was a really nice feeling shaking hands with people I hadn't seen for almost a decade - all of us very eager to work together again. This time we get to skip the phase where they think I'm crazy and jump right into figuring out the ad business around Technorati Japan, Six Apart Japan and hopefully soon Japanese Wikia. Technorati is the "secret sauce" and shiny new thing that Infoseek had been 10 years ago.

I am going to be on the board of this company, but will not run it. My role will be to bring new things to them, try to help them with their bearings and stir things up once in awhile.

Disclosures/disclaimer: I am an investor in Technorati, Six Apart and Wikia. I'm an advisor to Digital Garage. Digital Garage is the Japanese partner for Technorati and operates Technorati Japan. I am on the board of and GM of International for Technorati, I am the chairman of Six Apart Japan. I am on the board of Technorati Japan and and am involved heavily in its operation.

9 Comments

I would love to be a fly on the wall at some of those meetings. Have had peripheral consulting experience with a couple of the companies mentioned. At meetings I've been to we usually get blank stares/no input/no creativity/guys nodding off to sleep because of their hangovers. Not sure how "-----" stays where they are, other than reputation and long-term contracts, when everything they do looks like same now and their senior leadership has no vision.

...you have spent 10 years "talking about the end of people's businesses". Some of which have come around. Guess you have earned some credibility.

people shaking hands in tokyo these days?

The media landscape is unlikely to change, as long as New Media is so willing to sell itself to Old Media.

The Revolution will not be advertised.

"I said that I thought that advertising, PR and marketing would converge into "communications"."

Totally agree with Joi.

Dentsu and Hakuhodo have PR and marketing sections or group campanies as their subsidiaries but they have no mind to converge them even if advertisers wants to make their marketing communications converged.

Some guys understand what is and will be happened but others not. This is the really in the traditional agencies. Seems that they still can't stop thikning everything with Mass Marketing/Mass Media ways.

Mass is already Mess.


I'm an ex-hakuhodo and ex-dentsu.

Charles: I disagree. The revolution has and will be advertised and probably on Technorati.

Joi: Nice to see you returning to form and writing at length. Thanks for the refressher history lesson as well. Actually it does me good that you are still handing out the KoolAid. It sheds a nice ray of sunshine on my realism.

I'm still not clear how I'll ever have a conversation with a fictional legal entity (or why I would want to in the first place) or why I want to participate in buying a DVD (even the aisatsu required is a burden to me). Then again, some people love to talk to salesmen (to paraphrase a line from Glenngary Glennross).

Did you ever think that the reason the Net got co-opted here so darn fast and there is less visible user generated content is because most of the Japanese Internet seems to exist for phones? Net on phones is the ultimate BigBiz version. User are only consumers, phones are incapable of creating content. Not only that, the best part is you get to charge em for every darn bit they consume!

Hey Joi Ito,

Great post. I am just getting together my own site and must really thank you for all the cool ideas you are putting out.

I guess Marketing used to shape opinion, now opinion is beginning to shape marketing. I am trying out some crazy ideas too. It a strange feeling when you talk to people about your direction and they think you are crazy!!!!

I am excited about the future of Everything.

All the best


Rich

I agree Consumer generated content is a bad way to express it. I prefer "User defined content".

Chris B: Yeah, the lack of keyboard/PC literacy in Japan has a huge impact and will probably shape blogs and other things quite differently. I also agree that messages over carriers is definitely more BigCo than stuff on the Internet. It's interesting to look at Mixi which is slightly more mobilephone sized behaviors. Do you agree?

I think the Mixi guys got the balance much more right than any of the Big/IT Biz pothole^H^H^Hportal sites ever did. Truthfully this comment is based not on personal experience (I dont use a phone for anything but talking) but on obervation of lots of the pages there and that my friends who work there tell me they get a fair ammount of traffic thru the /i page.

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