Determined branding activities undertaken amid strict advertising regulations -- aiming for optimal media allocation

Strict advertising regulations meant there were limitations to optimizing media allocation

Q. Mr. Nakamura, please tell us the role of the department that introduced MAGELLAN.

As CMO, I am in a position to oversee the entire marketing of the business. The team that introduced MAGELLAN this time is the marketing team that is mainly responsible for advertising and media allocation. This time, we introduced MAGELLAN to analyze the matchmaking app "Pairs."

Yuichi Nakamura, Director and CMO

Q. What are the characteristics of the market and the challenges in marketing?

The matching app industry has very strict advertising regulations. In the past, the term "dating" was often heard, and especially when the industry first entered the market, it often had a negative image, and advertising placements were quite restricted. Therefore, in terms of marketing, even if we wanted to expand our advertising placements, we were limited in the number of media we could use, so we had difficulties in that we could only take limited measures. Specifically, we could not place advertisements on TV commercials, transportation ads, or YouTube. We started from a situation where "even if we wanted to expand our advertising placements beyond digital, the only thing we could do was some billboard ads."

In order to change the negative image of "dating sites" and create an atmosphere that "it's okay to use them" and "it's normal to use them," direct response advertising alone is not enough. Since we need to make people who are not our target aware of and understand the service, we placed great importance on branding advertising.

To maximize the effect of branding, it is natural to allocate media starting with the most effective one, but in our case, we were unable to do that. The most difficult thing was that we were unable to implement TV commercials or transportation ads, which are thought to be the most effective in terms of generating volume. Even though we were placing ads in limited media, we were worried about whether the branding effect would actually be achieved.

In these tough circumstances, we have embarked on branding activities with determination, through trial and error. Although we have not yet achieved clear optimization, I believe that it is because we have pursued this with determination that we have been able to establish our position as a leading company today. Now, advertising restrictions are gradually being relaxed, and we have finally been able to choose our media.

Want to clarify the optimal media allocation to maximize advertising effectiveness?

Q. Please tell us why you introduced MAGELLAN.

Until now, while there were advertising restrictions, we have been increasing our advertising budget in the order that restrictions were lifted. Now, we finally have more options, and we can implement the highest priority based on the cards we have at our disposal. The reason we introduced MAGELLAN was to clarify the optimal media allocation to maximize the effect.

Q. When considering optimizing media allocation, did MAGELLAN come up immediately?

In fact, we first tried to optimize allocation in-house. Since we belong to a group company called Match Group, it is often faster to discuss with group companies using unified standards when deciding on a budget. Therefore, we thought it would be better to develop it in-house. However, since the maturity of the matching app market in the United States, where our parent company is located, is different from that of Japan, we found it difficult to apply the unified standards as they are in Japan. Therefore, we decided to separate the reporting method and the review method. We thought it would be better to create reports in-house and use external Japanese tools for review, and as a result, we introduced MAGELLAN. We will use MAGELLAN to conduct optimal media allocation analysis tailored to the Japanese market and then consider the content of our advertisements.

We want to optimize the balance between short-term gains and medium- to long-term branding.

Q. What are your particular expectations regarding the analysis of MAGELLAN?

When we think about "efficient advertising," we tend to look only at the visible numbers, but what we expect from MAGELLAN is that we can help optimize advertising that is not visible (cannot be quantified) as well.

The matching app industry has always had a bad image, and some people still feel that way. I feel that it is an industry with a lot of potential customers, but not so many actual customers. In marketing, if the goal is to only acquire immediate users, it is fine to reap the rewards with direct response advertising, but that alone will not last. I believe that people gradually start to think, "Maybe I should try it," after seeing an advertisement in a reliable media, seeing it multiple times in multiple places, or being introduced by a friend. In other words, direct response advertising alone is not enough, and I believe that branding advertising, which is difficult to see in numbers, such as billboard advertising and transportation advertising, is very important. On the other hand, no matter how important branding advertising is, I believe that there are of course meaningless places and meaningless amounts, so I would like to optimize those as well.

We believe that the balance between advertising aimed at short-term sales and advertising (branding) with a view to mid- to long-term sales is extremely important in business management. We hope that MAGELLAN can help you achieve the optimum balance.

Q. Is there anything else you would like to analyze with MAGELLAN?

When multiple advertisements with different purposes are run in the same media, I think there are cases where it works well and cases where it works badly. For example, in our case, we run both branding advertisements and direct response advertisements on YouTube. In the future, we would like to clarify how this affects the results. We would like to formulate and verify hypotheses while gradually changing the analytical points.

The ultimate ideal is to "not place ads"

Q. Lastly, please tell us about your goal in marketing.

The ultimate ideal would be to not advertise. I think it would be ideal to acquire users entirely organically. To achieve this, branding is important. I want to create a flow where "Pairs" is the first thing people think of, and when they feel like using it at their own moment, they remember it, start using it, and introduce it to people around them.

For that reason, as a short-term goal, we would like to be chosen by people who are closer to the potential demographic. Until now, we have been chosen by people who are relatively proactive in their search for love and marriage. From now on, we would like to be chosen by people who say, "I haven't thought about marriage yet, but I want a partner," or "I want to get married, but I can't be proactive."