Ad agencies must explore new lines of business: Hakuhodo

Hasebe, ECD of Hakuhodo, and Kimura, co-CEO and ECD of Hakuhodo Kettle, described how the agency's unique structure enables them to explore areas outside of conventional advertising, which Hasebe called “market design”.

“Because of the expansion of technology and media, professional fields also expand,” he said. “The boundary of these fields is becoming blurred and integrated.”

Using a series of case studies, the duo showed how Hakuhodo is seeking new potential as an ad agency.

1. Redesign the conventional

By creating a logo, uniform, sign, or interior, Hakuhodo Design Boutique, one of the departments under the company, designed a hospital, which focuses on people and life. To give a sense of humanity, they used artwork to create a relaxing atmosphere, a fireplace to offer warmth to the terminally ill, and a library of books regarding philosophical matters.

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In the beverage industry, the agency designed not only a frozen, scultped head for a glass of beer, but also a 'Frozen Garden' concept store whose roof was the same shape. The photogenic architecture encouraged consumers to not only share selfies but also the photos of the store, which were used to create ads.

Based on a survey, the agency found that the biggest need business travellers have is quality sleep. Hakuhodo's brand design division redesigned a hotel with features including a shower with a seat, an automatic massage chair, and a special sleeping room.

"Our advertising skills can be used in a wide range of fields,” Hasebe said. “Professional skills are essential, but the key of this business idea is to focus on people and break the conventional rules.”

2. Start up your own business

From moviemaking to running a bookstore to promoting idols and sports, the agency can make profits in the other fields.

Speaking of naming the agency ‘Kettle’, Kimura said it means “boil the world by boiling ideas”. While the agency’s core business is still advertising, 20 per cent of its revenue is from other business, such as the bookstore, “B&B” (book and beer), where readers can enjoy a beer while reading, and also attend talk shows hosted by the bookstore every night.  

Data stadium, another unit within the agency, uses special cameras to capture all the movement of sports games, and collect data to help sports teams design with strategies.

The point being that ad agencies can tap into different fields by using their skills with data and technology. “But the key is to do what you desire,” Kimura pointed out. “You can start your own business in your favourite field.”

“If you don’t love your business, your business won’t love you,” Hasebe added.

3. Pioneer a new industry

The agency’s engagement business unit collaborated with JAXA, Japan’s space association, to create a project that brought children’s wishes into the space on 7 July, which is said to be the best date for wishes to come true.

Exploring the tourism industry, the agency created ‘Dining out’, prestigious services for wealthy people.

TBWA/Hakuhodo also designed a six-course menu for Soil restaurant, which offers dirt for dinner.

Ad agencies can create something that doesn’t exist. “The key is to try the un-done,” said Hasebe.

The ad agency’s core business will remain the same, but there is more potential around the circle, he added. “We need business ideas to monetise our skills and knowledge.”

Categories such as gaming, entertainment and mobile are booming today. “These industries didn’t even exist 10 years ago,” Kimura told Campaign Asia-Pacific after the seminar. “We can create new industries in the future. The advertising business is ok right now, but in the future, we don’t know. These new industries may lead the ad agency to a new level.”

Many people call advertising ‘a dinosaur industry’, Hasebe said. “Dinosaurs disappeared because they didn’t change, but we won’t because we are always changing, challenging and adapting.”