Sunday, October 16, 2011

Why I Shuttered my Marketing Agency for Tourism

I had started a new business venture about two years ago. It was a section of my company that was dedicated to tourism and travel and it was a very profitable business actually. Because of my background in the mass media and operating on the receiving end of marketing and advertising companies, I saw how clients were, well, getting ripped off. I knew I do do a hundred times better for clients. I set targets and goals and I saved the clients big money too!

I knew that I could make decent money by arranging huge promotions between client companies for 1/50th the cost of what a major Japanese marketing company like Dentsu or Hakuhodo or even the smaller agencies could do. 

I did arrange many of these campaigns for little cost to my clients. Many were nationwide internet and TV campaigns. Some were huge multi-media tie up with networks, major magazines and non-traditional media. My concept was to find clients that had needs that could be met with a sort of mutual promotional campaign. Everything had to make sense and be organic. Then I spread the costs evenly around to each client. Instead of charging them separately.

So, instead of spending, say $400,000 ~$500,000 (USD) on a campaign (if a sponsor bought it through, say, Dentsu) I could arrange it for $12,000 total or so. I did it too, many times.

Here's a good example:

Domino Pizza Japan wants to get more people ordering online in order to more efficient promote its product and cut down on expenses (telephone ordering is not cost effect nor efficient).

A airlines or foreign tourist board wants Japanese to go to visit their country.

A wine company wants to get the word out on their services.

What should I do? I thought about it and got them together and created a cost effective, mutually beneficial campaign that cost each of these parties next to nothing. 

In this example, I arranged for a vacation to a foreign country for anyone who would join and become a member of the Domino pizza online ordering system. The top winner would get a vacation for two, business class, to a foreign country and hotel. The airline & hotel prize supporting companies would get the massive promotion that goes along with the campaign. The wine company provided all the second place awards: 100 people win a set of quality red & white wine.

The campaign runs for two months!

Domino Pizza prints (get this):
7.8 million newspaper inserts
2 million menus
1.6 million direct email magazine to subscribers
250,000 pizza box top ads
750,000 regular direct mail

Airlines provides 2 business class tickets and 5-star hotel for 4 nights.

Wine company ( provides 200 bottles of quality Coppola wine. 

Cost to Domino if using Dentsu? Approximately $200,000
Cost to airlines if using Dentsu? (considering the reach of ad materials): Approximately $400,000 
Cost to wine company if using Dentsu? Approximately $100,000

My company total charge: $25,000 that's inclusive to all three clients!

You can see the results of this campaign here:

(By the way, the campaign ends on 10/31 so you still have time to join the campaign and win the trip to New York!)

Why did I make these types of campaigns? A two reasons: First, I liked the clients. Second, I think Japanese advertising agency business is way too over priced. If I can help to lower advertising costs, then prices might go down and that makes life better for everyone, no?

But I am thinking about closing this business. 

All vacations come complete with helmet and baton!

Why would anyone close a profitable business, you ask? Well, since it was tied to tourism and travel every time I organize a campaign, something bad would happen:

Here's a list of those bad things:

1) Airlines goes bankrupt
2) Riots in destination cities
3) Huge earthquakes, tsunami and nuke disasters
4) Riots in destination cities

and, finally, 

5) Riots in destination cities, bankruptcies, etc., etc., etc., 

You might think I am just unlucky or have bad timing... But I don't. I am very lucky and have great timing that's why I am out of the tourism and travel advertising business...

Things tied up with tourism don't seem like good ideas in this day and age. The world economy is collapsing and things are getting nasty. As Gerald Celente says, "When people lose everything, they lose it." People are losing it all over the world. Read this from my friend, Mish Shedlock:

... I was about to line up an Italian campaign.... But, after watching that video on Mish's page... I think not!


diego.a said...

Why not setup "Protest Tourism"?

Travel around the world and join different protests. Yuppies would pay for it because they:
* have mediocre ideas on changing the world.
* have an addiction for traveling the world.

If things get violent, even better! It would be like running with the bulls in Pamplona. Except its running from the cops when they start firing the tear gas.

mike in tokyo rogers said...

Diego.a! You are genius. Come on in and I will hire you immediately. Good pay and benefits!

diego.a said...

Naw, Mike. Your blog is so much fun that I happily give you my dumb ideas for free.

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