Smartphone-based advertising agency is revolutionizing the Asian market

In the 19^th century there was the train, in the 20^th century the automobile, and in the 21^st century we have the TV, telephone and internet. Many say that this era is characterized by the emergence of smartphones, which have revolutionized society. From your perspective, what are the challenges and opportunities in terms of business development that have to do with the emergence of mobile technology and the latest technology?

For Adways, the smartphones business will keep on increasing from now on. During the feature phone era, the contents, the way of utilising it and thus business models diverged greatly between countries. However, in the case of smartphones, any vendor in the world works with the two major platforms, iOS and Android, so it’s almost like it’s one unified market worldwide. It’s a big chance for companies in Japan and anywhere in the world.

Advertising is our main business, and what’s mostly important in this area is the user’s location, knowing where the target users are. If they are watching TV, we will put ads on TV, if they are reading the newspaper, we will put ads in the newspaper. Nowadays everybody has a smartphone, and they spend so much time with their smartphones.

In Japan, we have a smartphone service called AbemaTV where you can watch programs from various topics such as sports, dramas, news, etc. It’s like Youtube. Many young people prefer to watch AbemaTV and Youtube rather than TV. Communication with friends is not through phone calls anymore, it’s done through services like Line, Facebook and Twitter. If more and more users are spending their time in front of a smartphone, then we have more chances to reach a larger base of users and make more elaborate ads specifically for smartphones.

User targeting technology keeps evolving, with a wider range of people using the same platform. The effectiveness and reachability of the advertisement are way better than they were ten years ago. When making an advertisement, it’s just not enough to simply show it to you, it is necessary to have an efficient user targeting strategy, which is made possible by current advances in technology.

Chuken Kigyos, the name given to Japan’s medium-sized companies, are actually the drivers of Japan’s current growth thanks to their continuous investment in R&D. In this context, to provide our readers with a broader perspective, could you share the genesis, how the idea came up for Adways, and what have been the key milestones throughout the years?

We founded this company in 2001, with only five employees at the beginning. We started with advertisements for PCs, however competition was tough with big rivals like Dentsu and Cyber Agent, and we didn’t stand very much of a chance of winning. That’s why we decided to move on to feature phone advertising. We developed the first-ever system for feature mobiles in Japan, capable of affiliate advertising. We invested mainly on researching mobile technology advertising, which I believe to be the trigger of our great success.

Since the Internet of Things (IoT) is really blurring the lines of different economic sectors and different businesses, I’d like to ask you, what is the personal meaning you give to this concept and what do you see as the main opportunities that can arise from IoT and AI for the future development of Adways?

Our vision is “Beyond Everything Internet”; it means that we want to use or harness internet technology to realize what we cannot do right now. It might sound like we are moving towards an IoT style of business, but that’s not IoT at all. We are moving beyond the internet technology we have right now.

For example, when there was no technology to indicate effectiveness for mobile devices available, we invested in R&D to realize that potential, to go beyond the technology at that time. However, we are still considering IoT, but we still don’t have any services or products. I am actually more keen on Artificial Intelligence.

There is a type of advertising called ‘Operational advertising’ – The way it works: it’s not simply an ad; it’s more a like a targeted marketing strategy. For example, if we are targeting female users around their 20s or 30s who are interested in soccer, we will do research on a daily basis to test the effectiveness of advertisements. If it doesn’t work, we will change it.

For ads of this type on sites like Facebook, Twitter or Google, there are lot of people working on it to guarantee their impact. It’s the same as fund management, you need to keep an eye on it on a daily basis. There is a high sales rate on this type of Ad, but the labour work needed is very high as well.

AI computers are already doing fund management in the US. If AI can make ‘Operation advertising’ more efficient, that’ll be great for our purposes. Taking in consideration that the workload needed is huge, we want to use AI to make it completely automated, so human employees can spend more and more time on creative and strategy planning work. Our vision is always going ahead of current Internet services.

That’s why we are doing research on AI appliance in this type of advertisement.

By advancing this technology, human touch will no longer be needed. We can focus our talents on being more creative and improving the attractiveness of advertisement.

Haruhisa Okamura, President and Founder Adways Inc.

One of the buzzwords recently is ‘big data’. Because of the technology we have, anyone is able to gather data, but in the end of the day many don’t know what to do with this data. In this context, can you give us more details about the unique business model of PreLaunch.me and details about its success in the US and what are the benefits of this services?

PreLaunch.me is our pre-registration platform for smartphone apps which we provide in the US market. We have a similar service in Japan and Korea called Yoyaku Top 10. This pre-registration platform is big in Japan and Korea, though in the US, PreLaunch.me is not so much yet. In Asia, when looking for an app in the app store, users tend to first look at the ranking category to see what is popular so they can download already existing apps. With our pre-registration platform, they are able to pre-order an app which will be released in the future, so they can get their hands on the latest and newest apps.

This service is more demanded by Asian companies rather than American ones probably because we have this culture of “pre-ordering” and “reserving” things as part of enjoying a product or service, and the same goes for smartphone apps. On the other hand, in the US, it’s simply downloading and enjoying/consuming it.

One of the two keywords we keep hearing in our interviews are ‘monozukuri’ and ‘hitodzukuri’. What is your perspective on those and how do you cultivate hitodzukuri in order to create a better business environment for your workers taking in consideration the lack of labour force, low birth-rates and aging population?

Our company’s corporate philosophy is “No People, No Gain”. The catchphrase in Japanese translates into giving not only better benefits to the employees but also educating and giving the employees future career prospects. I want every employee of Adways to gain experiences to make them grow and better business persons. I value my employees more than sales. What makes us different from other companies is that we give more opportunities to our employees to grow. We cultivate people inside the company; it’s more about their career and how they feel rather than just sales. For younger generations, for example, we assign larger projects with bigger responsibilities. They might fail for not being able to bear it, and the sales might decrease as a result of it, but that is not a big problem at all, because that experience will bring growth to them. This is what I mean by supporting more the employees.

This philosophy of ‘No People, No Gain’ not only goes for the employees of the company, but for everyone concerned. It applies for people outside the company too, because we want the customers to benefits as well. As an example; we talked about AI a while ago. Currently, ‘Operational advertising’ requires people’s touch, and expenses are high, meaning only companies with a large budget can afford it. Through AI those costs can be reduced substantially, therefore even a small company can choose ‘Operational advertising’.

Up until now, before the idea of AI, there was a lot of people working on ‘Operational Advertising’. With automation taking place, less manpower is needed. We got rid of that idea that in order to have more sales, we need more people.

This also is reflected in our earning mentality. We are not only chasing immediate big profits. By making our services better performance like this, even small companies can profit as well. And that, in a long-term perspective, will link to an increase in revenue later on.

We are always striving for excellence. We spend a lot of money in research to make these services good to provide it to many small companies. We are always focused on long term achievement. That’s the reason why we assign younger generations to bigger projects. In the short term, the revenues might decrease due to their lack of experience, but in turn it will come back much higher in the long term as the young employees will grow and apply their developed knowledge to future projects.

About decreasing population: if we look at Japan domestically only, it’s true that low birth-rate and a decreasing labour force, but Adways is rich in global human resources. If there is a talented person, we will hire them from anywhere in the world. We have very diverse employees in the company. Only 40% of our employees are Japanese.

Japan is still the third largest market in the world, but it’s also true that there are challenges such as the aging population, and global growth in terms of competitiveness. More than 10% of your revenues are generated outside of Japan. What is the role of the American market in your future strategy?

I do recognize that the US market is large, but it is also true that there are many companies who have technologies already, so it’s difficult to compete with them. We have a branch in the US, but it’s function is to gather information from Silicon Valley companies, then bring that information to Japan and use it as a reference to make new original products for the Asian market. We are not focusing on having large sales in the US.

Do you think there will be M&A activities or strategic alliances with companies such as the ones based on the Silicon Valley?

The chance is not zero, but we haven’t really considered that. Rather than a place to have revenue, the US is a field to gather information and knowhow to apply to the Asian market.

However, there are many American companies trying to start business in Asia. For them, we can provide our services to have sales in Asia given our advantage in this market.

For an American company looking to penetrate not only the Japanese market, but also the Asian market, what would you say are the reasons why they should pick Adways over your competitors in the market?

We have an advertisement network in the whole Asian region and there is no other company that can offer that on a smartphone basis. We are the leading marketing company in Asia. Many big companies in Asia are using our services. Other than that, we have over 10 years of experience in dealing with Asian markets. Of course, we also have extensive experience in Japan as well. Usually Japanese companies who are starting to expand in Asia, do so through Adways.

What is your personal vision about the future of Adways? Where would you like to see it in 20 years?

Our slogan is ‘OMG, this is amazing’. We want to keep surprising and amazing the world. In 20 years maybe, but not only, in the next year, in 5 years or 10 years, we will keep aiming the same. When we started the affiliate advertisement technology on smartphones, all Japanese companies were surprised at the time and happy for this innovation. I want to put my efforts to realize what was not possible before. And realize that, not only in Japan but in the whole world, to contribute to society so that people say they have more fun time with the Internet while the world gets better with our system.

Currently, it’s more the advertisement market people who know the greatness of this company. In the future, I want anyone to hear our company’s name and relate it to something great being done for the world.