Asatsu-DK and Tokyu Agency Announce Joint Projects in Digital Media and Research and Development

November 8,2002

Asatsu-DK Inc.
Tokyu Agency Inc.

Asatsu-DK Inc. (ADK: President Koichiro Naganuma, headquartered in Chuo-ku, Tokyo) and Tokyu Agency, Inc. (TAG: President Kyoichi Kubo, headquartered in Minato-ku, Tokyo) announced today two joint projects in digital media and research and development.

Joint experiment in targeted advertisements with an eye on the digital media era

The increased use of digital broadcasting, broadband Internet services and other digital media will likely alter how people communicate and how advertisements work. Given this, our two companies will jointly begin experiments in advertising designed to verify the effectiveness of new business models for advertisements.
With the help of Japan Digital Serve Corporation*1, we will undertake the following two experiments to deliver motion-video advertisements targeting households joining a trial service of the B3*2 multicast contents delivery system for community-area TV networks. The scheduled date of launch is some time in 2003.

Targeted delivery of advertisements based on user attributes
As digitization of media progresses, we believe it more important to link multicast and unicast. Multicast has the property of broadcasting, which delivers contents to an unspecified number of users, while unicast has the property of conventional communication that enables individual to be targeted. This link will allow the delivery of pinpointed advertisements and selective messages to targeted, differentiated audiences in marketing even if the same program is delivered to all viewers as with the conventional broadcasting.

Both companies will verify the effectiveness of this approach to expand the reach of the advertisements. This will be the first attempt in the advertising industry to explore the possibility of using this method in the forthcoming digital media age.

Experimenting with various steps to increase viewers' receptiveness to advertisements
Digitization of media allows contents-delivering media to grasp users' viewing activities. This in turn will enable media to devise techniques to generate more active contacts with viewers via advertisements. An example is serial advertisements that deliver the first part no matter where the viewer begins watching a program. Another example is advertisements that offer different subtitled messages depending on the viewing frequency. Furthermore, the diffusion of cumulative services will enable media to offer added incentives to generate active contacts via advertisements. This is essential, given the need to address a likely decline in the frequency of viewers watching commercials.

The two companies, given the need to raise the advertisement receptiveness of viewers, will verify the effectiveness of these new advertising methods that can be realized through digitization.

Based on the results of these experiments, we will undertake research and development of new possibilities and specific advertising methods for reinforcing the reach and appeal of advertisements. The results gained through these experiments will also be used widely for the advertising activities undertaken by both companies.

Joint research and development on advertising expressions and models to increase brand values that lead to expanded sales

Combining and blending the marketing systems of ADK and TAG, we have begun joint research on optimal communication methods that help expand the sales and business opportunities of advertisers. This involves research on the involvement and contribution of advertisements as well as the enhancement of both companies' abilities to make advertising proposals.

Using TAG's QPR *3, we will explore brands that have generated strong consumer interest in a 30-kilometer radius area from the center of Tokyo over the past 15 years. We will then make use of ADK's advertisement expression research system AD-PROBE*4 and advertisement campaign database A-Campaign*5 for research and development.
The following two themes will be explored in this undertaking.

1)	The impact on and the degree of contribution to the advertiser's stable sales, as a long-term effect of advertising communications. (Combination of AD-PROBE and QP)
2)	Formulation of simulation models assuming marketing mix models. (Combination of advertisement placement data, centering on A-Campaign and QPR)

Through these research and development themes, we plan to further deepen studies on the relationship between advertisements and sales. The two companies will also use the results of these undertakings to make proposals to their advertising clients.

Japan Digital Serve Corporation

Establishment:

April, 2000

Chief officer:

Executive President Hiroshi Kawamura (Managing Director, its communications, Inc.)

Head office:

5-6 Nampeidai-cho, Shibuya-ku, Tokyo

Capital:

2 billion yen

Major shareholders:

Tokyu Corp., Tokyo Electric Power Company, Odakyu Electric Railway Co., Ltd., Tobu Railway Co., Ltd., Teito Rapid Transit Authority, its communications, Inc., Sagami Railway Co., Ltd., others

Activities:

Digital broadcasting services for community-area television, telecommunications services, multimedia information services for railway stations

Web URL:

http://www.jdserve.co.jp/

B3 multicast content delivery system

A multicast content delivery system developed by JDS for community-area television networks.
This enables stable-quality delivery of broadband content without impacting the traffic of Internet services via existing community-area television networks.
It uses the downstream band for broadcasting to deliver multicast contents in place of the Internet band for community-area television networks.
The volume of contents that may be delivered simultaneously depends on the number of video band channels secured and the quality of contents. A frequency band for one analog channel for a community-area television network (6MHz), for instance, would allow smooth and simultaneous delivery of 50 sets of streaming contents of IP data at 500kbps.

*	Multicast means delivering the same data to designated parties within a network.
	Unicast means delivering the data to specified parties by designating the specific address within a network.

QPR(Quick Purchase Report)

A home-based scan panel research system jointly developed in 1987 by TAG and Tokyu Research Institute. It is the first broad-area research system in Japan that detects elements forming market leaders.
It analyzes the history of purchases and the brand loyalty of a household, taking advantage of panel research, and it provides basic data for brand sales analyses.

AD-PROBE

An evaluation and research system of advertising expressions developed by ADK in 2000.
It grasps the responses/evaluations of consumers to TV commercial messages by each second, and the findings are used as a research tool for developing creative guidelines.

A-Campaign

A database of evaluation data for advertisement campaigns developed by ADK in 2000.
It is used for case studies in building models, drawing on a rich pool of campaign data accumulated each month.

Overview of Asatsu-dk Inc.
	Name:	Asatsu-DK Inc.
	Establishment:	March, 1956
	Chief officer:	Executive President Koichiro Naganuma
	Head office:	1-13-1 Tsukiji, Chuo-ku, Tokyo
	Total billings:	358,830 million yen (in fiscal 2001)
	Number of employees:	1,966 (as of Dec. 31, 2001)
	Activity:	Comprehensive advertising services
	Web URL:	http://www.adk.jp/
Overview of Tokyu Agency Inc.
	Name:	Tokyu Agency Inc.
	Establishment:	March, 1961
	Chief officer:	Executive President Kyoichi Kubo
	Head office:	4-8-18 Akasaka, Minato-ku, Tokyo
	Total billings:	191,434 million yen (in fiscal 2001)
	Number of employees:	1,029 (as of March 31, 2002)
	Activity:	Comprehensive advertising services
	Web URL:	http://www.tokyu-agc.co.jp/