All aboard Japan’s growing transit advertising market – A Tokyo subway marketing case study

Like the movie, first-time visitors to the Tokyo area of Shibuya are often momentarily lost in translation. Japan’s claustrophobic billboard culture is a curious spectacle: glowing cut-outs of Western celebrities peddle whiskey, ducks sell insurance and talking dinosaurs promote…. well, something.

Welcome to Japan – scenic inspiration for futuristic sci-fi flick Blade Runner and land where the billboard is king.

These flashing billboards have become symbolic of ‘modern Japan’, but what may surprise is the vibrant area of marketing that has developed right under your feet. Let me lead you on a lesser-known marking journey that takes us below the streets of Tokyo into the world of Japanese subway marketing.

Like many Japanese cities, Tokyo’s complex rail network is the circulatory system of this sprawling megalopolis. Most Tokyoites invariably start and end their day on a subway train. To give you some idea of the sheer numbers involved with this system, Tokyo’s two subway companies, the Tokyo Metro and Toei Subway network, haul a staggering 8.3 million passengers around the city on a daily basis. Combine this with the 3.65 million on the competing Japan Rail Yamanote loop line and you have the equivalent to half the population of Australia commuting daily in just one city.

Japan Rail now lists ‘station space utilization’ as an income category in its financial reports and has established brand extensions in a wide array of businesses that explicitly target the time travelers are spending in stations. Commuters have long grown accustomed to grabbing a snack at a network of 500 Japan Rail convenience stores, paying for their purchases using futuristic touch-card rail passes, and shopping at fashion retailers in leased station space before they have even reached the platform.

Subway operators have successfully redefined commuters as shoppers and the results are nothing short of amazing. In 2008, Japan Rail derived over 30 percent of its 2.7 trillion Yen (AUD$37.2 billion) in operating revenue from sources outside of traditional ticket fares. Which begs the question, can state governments pad their transport budgets by replicating a similar transit revenue model here in Australia?

Dentsu, Japan’s largest ad agency, valued this niche market at around 250 billion Yen in 2008 (AUD$3.5 billion), or approximately 3.7 percent of Japan’s total advertising expenditure – not a bad part of the pie in an advertising market worth AUD $92 billion. Transit advertising growth has been tempered by the impact of the global financial crisis, which has led to a fairly hefty cut in marketing budgets for most organizations. Regardless of this, the growth potential in this sector remains enormous.

Tokyo’s train stations enjoy a consistent audience of over 50 million workers during the working week, not to mention a considerable passenger haul on weekends. While Shinjuku Station is the world’s busiest station, with 3.6 million users per day, the wealth is also quite evenly spread across the network. Over 80 stations draw a daily patronage exceeding 100,000 and 36 stations draw more than 200,000 a day. In terms of demographics, Jonahthan-Llloyd Owen writes in Japan Marketing Data, “Over half the users of the Tokyo Metro network are in their 20s or 30s, and have higher than average disposable income.”

I’d gladly eat my kimono if you can list another outdoor marketing network than can consistently bring in this volume of potential impressions.

The transit advertising jackpot, though, is the busy rush hour period. In a standing-only train crammed beyond capacity with office workers, I can vouch from experience that there is precious little to do in the dark subway tunnels but stare above the crowd at the advertisements hanging from the ceiling. Do this for even half of your commute and I guarantee those advertisements are likely to leave a mental impact. Far removed from the simple paper advertisements on buses or trains in Australia, the Japanese form of transit marketing is also an exciting and innovative industry.

Unique Japanese ideas that were born on the rails include special ‘theme-carriages’, in-train video monitors and interactive advertisements with in-build headphone plugs for iPod listeners. Micahel Fiorella, author of Japanmarktingnews.com, has also blogged on the interesting invention of electronic paper, which made its debut in Japan on the subway – electronic paper hangs from the ceiling in the middle of Japanese subway trains and amazingly is able to change image repeatedly throughout the journey.

But Japan’s eagerness for transit advertising raises some age-old questions: Where does one draw the line? Whatever the answer, Australia’s rail operators should be furiously taking notes – there’s gold in them thar’ stations!

This article appeared as a feature story in the 2010 Media Survival Guide edition of Marketing Magazine (www.marketingmag.com.au)