December 2008

METRICS Helping bring “Fair trade”

to Japan’s marketing services industry

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Mission

METRICS is Japan’s first consultancy designed to Audit the performance of marketing communications for both internal and outbound clients

Marketing Management Consulting using Measurement, Evaluation and Benchmarking

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Purpose

This presents a basic outline of Metrics, a Japan based marketing consultancy that helps both Japanese and international marketers to better manage their marketing investments and their various marketing s

uppliers in Japan and for outbound business from Japan. • Above the line (ATL) and below the line (BTL) communications

• Creative and Production

• Public Relations

• Digital communications

• Social media and Reputation management

• Agency and suppliers

• Organization and People

• Overall Marketing ROI

• Pitch consulting for the marketing partners listed above

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Needs of marketers globally and in Japan

“How difficult are each of the elements in the marketing process?”*• Measuring advertising and brand impact – 63%• Managing marketing activities – 58%• Providing visibility into all marketing activities – 51% • Coordinating internal workflow – 45%• Maintaining consistency across all media channels – 41% • Gaining insights into consumers – 38%• Identifying media vehicles – 38%• Managing and tracking expenses against budgets – 35%• Identifying audience segments – 34%• Managing creative content – 34%• Managing project details – 32%

* Forrester study commissioned by Aegis Media – global sample - 136

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Why Audits are necessary in Japan?

*TV Spot buying

Western Markets• Buyers’ market (advertisers)• Transparent process for deals• Target GRP can be use as a

currency for buying• Clear cost information can be

provided by TV stations• Pinpoint buying is often possible• On-air schedule can be changed

before aired• Some compensation for under-

delivery of GRP• Media auditors aim to investigate

buying cost performance by comparing with other advertisers

Japan Sellers’ market (media) Opaque process for deals Only household GRP or number of

CMs are allowed as units for buying No cost information to compare wit

h other clients is given to anyone Only package buying is offered Difficult to change the on-air sched

ule before aired Rare for compensation for under- d

elivery of GRP Media auditor (METRICS) aims to

improve target cost efficiency with avoiding under-delivery and improve spot positions

Example: How Japan’s TV Buying markets Differs from Western Markets*

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Our Service Line-upM

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Marketing Management Consulting by using the following Auditing Services• Media Performance Assessment (Media Audit)

• Creative Performance Assessment (Creative Production Audit)

• PR Performance Assessment (PR Audit)

• Agency Performance Assessment (Agency Audit)

• Management System Performance Assessment (Mgt. System Audit)

• Digital ROI

• Social Media and Reputation Tracking

• Marketing ROI Assessment (M-ROI Audit)

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Media Audit – our core business

Media Performance Assessment Services• Exposure validation

• Did our clients get what they paid for?

• Did you do better than you expected?

• Do you do worse than you bargained for?

• Cost and quality benchmarking & evaluation

• Covered media:

• TV Audit (spot and program)

• Print Audit (newspaper and magazine)

• Web Audit (banner, listing and website)

• Outdoor Audit (OOH and transit)

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• Benchmark Evaluation• Problem Extraction• Solution & Implication

Media Audit

Two types of Media Performance Assessment Services• Global Audit

• Based in Japan but coordinated globally through global partners

• National Audit for Japan

• Benchmark Evaluation• Global Comparisons • On-going tracking

Global Audit

National Audit

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Global Audit

METRICS has made alliances with worldwide media consulting companies to monitor media performance across the world

USA

Canada

Brazil

UK & Ireland

Italy Spain

Benelux

Germany

FranceMexico

CEE/Russia Korea

India, Pakistan

Australia, NZ

SE Asia

China

Greece/Turkey

Global Audit

Australia

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Global Audit – Common Methodology

Two Criteria for Global Audit• Quality

• Quality includes the following criteria• GRP Delivery

• Targeting

• Programming

• Day Parts

• Coverage

• Weekly Weight, etc.,• Quality score will be evaluated against the competitive panel (CP)

• Cost• Evaluate against a local cost benchmark

Designed to evaluate the balance of Quality and Cost and find strengths and weaknesses to apply strategic adjustments for each region

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Global Audit – Scoring Process

YourYourPerformancePerformance

CP MarketCP MarketPerformancePerformance

Your CostYour CostPerformancePerformance

Local CostLocal CostBenchmarkBenchmark

QualityQualityScoreScore

CostCostScoreScore

Compare with each benchmark

OverallOverallScoreScore

Evaluate the balance of Quality and Price/Cost

Remark: Local Cost Benchmark is deduce from Cost Pool

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National Audit – target cost efficiency

Qualities

CostsBuying Cost

Stable HH GRPAchievement

Conversion Ratio×

GRP buying costs

10 Factors monitored

Target Cost-efficiencyImprovement

National Audit(Japan)

These elements should be compared with market benchmarkand past record benchmark to improve ‘target cost efficiency’.

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National audit - coverage

Data coverage is available for the following markets in Japan• Kanto• Kansai • Chukyo• Fukuoka• Hokkaido• Miyagi • Hiroshima• Shizuoka• Oka/Taka• Fukushima• Niigata

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National Audit - example

GRP Achievement Assessment Mechanism:

• Actual Household GRP’s can be assessed with 10 Measures to pinpoint GRP Gain/Loss • M1 – Applied buying week M6 – Program timetable change

• M4 - Spot position M8 – Moved spots

Major Loss Factor-9.8%

(-293.5 GRP)

Improvement for Loss Factor

95.8% Achievement can be reached

M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 %

Achiev

GRP%

-3.3 -1.2 -1.5 -4.1 0.0 -2.3 0.0 -1.5 0.0 0.0 86

GRP 100.3 -35.6 -45.0 -123.7 0.0 -69.5 0.0 -45.8 0.0 0.0 -419.9

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National Audit

Other Improvements:• Target Conversion Ratio:

• Considering the quality of attention rate/Reach and with an average zone conversion as an objective, Conversion Ratio will sustain or improve

• Cost/GRP:

• Negotiations using the cost benchmark lead to the buying cost reduction

• Actual Guarantee Contract, etc.,

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Media Audit

TV Spot Performance Assessment Service

• Cost benchmarking methodology based on our proprietary pool of data

Expenditure IndexExpenditure Index

Quality IndexQuality Index

Zoning IndexZoning Index

Actual GRPActual GRP ＝× M-IndexM-Index(Cost benchmark)(Cost benchmark)

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Media Audit

TV Spot Performance Assessment Service• Have experiences over 50 clients/brands

• Generally improve 5-10% of target cost efficiency

• GRP achievement of 95% at least and possible to achieve more than 100%

• Improve and sustain conversion ratio by balancing reach/audience quality elements

• Endorse a transparent media buying environment

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Background

1995: Founded SPI as Japan’s first media specialist• Started an only professional media (TV) audit service in Japan

• Diversified into • Communications planning

• Analytics

• Marketing Modeling

1999: SPI joined Japan Advertisers Association (JAA) for its unique proposition

2008: Founded METRICS as a subsidiary of SPI, Japan’s first and only company to focus media and marketing communication auditing services

Separated as separate company to give arm’s length consulting.

December 2008

Helping bring fair trade to Japan’s marketing communications industry

For more information email or call Blair Currie, Representative Director for SPI and Metrics at blair_currie@spi-consultants.com or call at +8190 7824 0396