Group Press Releases
Carat Enters Japan and Buys Stake in SPI
21 August 2000
Carat, the worlds largest independent advertising media specialist company thinks the Japan advertising industry is ripe for change.
According to Mr. Douglas Flynn, Chief Executive Officer of Aegis PLC, Carat's UK based holding company,
"We see many parallels between the current big bang in the Japanese financial sector and the potential for a similar big bang in the advertising media area. As the world’s second largest advertising market, Carat simply must engage itself here".
Flynn was speaking at the announcement of Carat’s entry to Japan through the purchase of a majority stake in Strategic Planners International (SPI), Japan's first and only independent strategic media planning company.The company will be renamed Carat SPI K.K.
He said of the acquisition,
"SPI is a high quality strategic media company that fits with our group direction to move into more strategic services. We respect the media buying strength of the large Japanese advertising companies and we feel that SPI's focus on providing clients with objective, accountable media planning is right for the market."
SPI was founded in 1995 by a group of executives including Mr. Kim Walker, Mr. Tsuneo Honda and Mr. Akira Murayama.
Walker, the President and a veteran of 20 years experience in advertising agencies in five countries, said of the deal:
"Carat is a widely respected and powerful company. We aim to marry our unique, Japanese experience, with the immense international resources of Carat to deliver global best practices to our clients. Even with this deal, we remain the only true media independent as we have no connection to a creative agency so 100% of our focus is on delivering business advantage through the efficient and effective use of media".
Carat has 87 offices in 36 countries and reported turnover of US$10.3 billion in 1999.
Regarding future plans for expanding Carat’s presence in Japan, Flynn said:
"As the second largest advertising market in the world have to treat this issue very seriously but we will not rush into it. We think a number of recent investments by foreign advertising companies in Japan have been rash, politically awkward and unprofitable. We will not undermine the unique positioning of Carat SPI but on the other hand, we will be seeking ways to expand our presence in the market through cooperation with major Japanese agencies or other innovative means".
SPI has built a profitable business on revenues of around ¥150 million by advising major advertisers how best to spend their advertising budget against different media. Through the application of models that help determine the relative effects of media on sales as well as other influencing factors. Because of its separation from media buying, SPI can be totally objective and accountable in its recommendations even recommending reductions in budgets or shifts to unorthodox media if appropriate.
Among SPI's major clients are major foreign and domestic companies such as adidas, Club Med, Disney, Fujitsu, Nippon Lever, Warner Lambert and Volkswagen. Aegis Group PLC is the holding company for Carat, Media Marketing Assessment and Market Facts, leading companies in providing media communication services, marketing consultancy and market research. Listed on the London Stock Exchange, the company is capitalised at around £2,000 million, and operates in 38 countries with its three main businesses.
Media Specialists have become extremely popular among advertisers overseas with almost 70% of all media bought in Europe being handled by these specialists.
The trend has become more pronounced as the selection of media has become more complex through the wide choices available. Clients also have come to realize that the bulk of their budgets are spent on media. While the creative message is of obvious importance, the challenge to select the right media in the right volumes without wasting money has become an independent science that has fuelled the industry.
In Japan, SPI has built its success on sophisticated techniques, which marry disparate data (sales, pricing, distribution, advertising volume, brand awareness etc.) into models that can predict sales at various advertising weight levels. In this way, they can guide their clients not to spend too much, nor too little and against which products they will likely get their best return on investments.
Facts about Carat SPI K.K.
Founded: August, 1995
Management:
Kim Walker President and Representative Director
Number of (full time) employees:
11
99/00 Revenues:
¥150,000,000
Capital:
¥10,000,000
Key clients:
adidas, Disney, Club Med, Fujitsu, Nippon Lever, Volkswagen, Warner
Lambert
For further information please contact:
Carat SPI
Kim Walker, President
Tel: 81 3 3796-8921
Fax: 81 3 3796-8922
e-mail: kwspi@gol.com
