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| Japanese politics in the media limelight |
| Embracing PR in Japan |
The public relations industry in Japan is surprisingly small, but business leaders and politicians are starting to realise the value of commissioning communications expertise.
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| The three newspapers with the highest circulation in the world are all Japanese. |
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| | The Japanese media environment is daunting. Japan has more than 120 daily national and regional newspapers, with a total circulation of 70 million copies: the highest per capita figure in the world. The three newspapers with the highest circulation in the world are all Japanese, and Yomiuri Shimbun, the world leader, sells more than 10 million copies every day.
This would suggest a flourishing playground for PR, but despite this fertile ground, Japan's public relations industry is worth under US$400 million per year. This makes it less than one tenth of the size of the US industry, which seems disproportionately small, considering Japan's GDP is nearly half of America's GDP. Japan's advertising market is considerably larger, with around US$50 billion in sales, nearly one third of the size of the US advertising market.
So why is the public relations industry so small in Japan? One popular explanation is that Japanese companies traditionally believe that public relations need to be handled internally, whereas advertising should be taken care of by outside experts. Often, PR related activities such as investor relations, CSR, issues and crisis management, and internal communications are handled within various corporate – financial, environmental, welfare, legal, and personnel - departments, while media relations is dealt with by in-house PR staff. The strict divisions between each department's responsibilities in Japanese business culture often make the signing of a comprehensive service agreement extremely difficult for PR agencies.
Japan's PR agencies, however, need to realise that their lack of effort in promoting their own industry in Japan is no small reason for the industry's size. For the sector to grow, the Japanese business community needs to be made more aware of the importance of consolidated public relations. The industry also needs to promote its expertise and capabilities with messages that can be easily understood by business executives, focusing on the positive influence that PR can have on sales figures and corporate reputation. Most of all, the presence of capable PR firms in the Japanese market needs to be emphasised and put on display in order to earn further recognition.
The profile of PR in Japan is changing for the better, however, thanks to some recent developments. During 2005, two major independent domestic PR agencies were the first companies in the sector to go public through initial public offerings in February and July respectively. Neither of these companies is a newcomer in the market - both were established in the 1960s and 70s - so why did they go public in the same year?
As well as acquiring cash to build service infrastructures and hire quality consultants, neither company has been shy about admitting that another major factor in the decision to go public was to become more widely recognised. Their higher profile will help them better position themselves in Japan's steadily maturing PR market, and will also be of benefit for the visibility of the PR industry as a whole.
Policitial parties have also started taking notice of the PR industry, and are now hiring communications agencies. In 2003, Japan's largest minority party, the Democratic Party of Japan (DPJ), hired a leading agency as its election communications consultancy. This was the first time that a political party had used a PR firm as a strategic partner, and the move drew a lot of attention.
In the 2003 general election and the Upper House election of 2004, the DPJ did extremely well, succeeding in relaying its messages to voters and unseating key members of the Liberal Democratic Party (LDP) in some important election districts. In January 2005, as the debate over the privatisation of Japan's public postal agency intensified, the LDP countered the DPJ's earlier move by hiring another major PR agency as its communications strategist.
In August, after the Postal Privatization Bill stalled, LDP leader and Prime Minister Junichiro Koizumi dissolved the Lower House, and called an early general election. The campaign that preceded the September elections intrigued many in the industry, as it was the first confrontation between PR agencies in the political arena. The election ended with a historic landslide victory for the reigning LDP.
Media coverage of the election made much noise about the fact that the party's success was based on conducting what was dubbed, a "theatrical election campaign" and its keen focus on communicating with the voters on the simplest political issues. It is not known how much the PR agency contributed to the overall campaign communication strategies and the victory, but the party is very happy with the help it was given, and is still working with the agency.
These business and political trends contribute to the wider recognition of the role of PR in Japan and are expected to shape the industry in the short term. In October 2005, top five daily national paper Sankei Shimbun ran a front-page article with the headline: "Spot-Lights On: PR companies popular among job-seekers - Election PR leads to more new business opportunities". The article summarised the behind-the-scenes work carried out by PR firms in the election, and the resulting rise in public awareness of PR, as well as the increasing number of young college students who are targeting PR companies as their ideal employers.
| It is now up to industry leaders to capitalise on the recent positive focus on public relations as a basis for more systematic engagement with Japanese business leaders. | |
These are exciting trends, but greater recognition and understanding of PR in the business world will be necessary before any substantial change takes place in the industry. It is now up to industry leaders to capitalise on the recent positive focus on public relations as a basis for more systematic engagement with Japanese business leaders. Weber Shandwick in Tokyo is among the leading PR agencies that are making efforts to tell Japanese companies how PR can offer solutions to their communications and business challenges.
The geo-political shift between the US and China, the public's heightened interest in the environment and energy, and the ongoing transformation of the Japanese social structure are among the important issues for PR consultancies to consider when engaging consumers and talking to existing or potential business partners. There are an abundance of communications opportunities and challenges for Japanese companies, and there is little doubt that there will be an interesting future for PR agencies that understand the peculiarities of Japanese corporations.
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| Toshiya Takata, account director and Robert Magyar, senior consultant, Weber Shandwick in Japan
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