I just got back after a week spent with the MSN team in Tokyo, this was my first trip to Japan and all I can say is WOW! Tokyo is like no place I have ever been before, talk about density, the city seems to simply extend forever, and when I say city I mean skyscrapers stretching as far as the eye can see. Given the density a couple of things really stood out to me:

First I have never been in a city that is so quiet, while Tokyo is a visually like Times Square on crack, it is almost silent. Second, the Japanese people have clearly adjusted to the density, everyone is so polite, they really make dealing with the mass of people quite painless. From a business perspective Tokyo is an advertising meca, just like the density of skyscrapers and people there are ads literally everywhere you look. This might make Tokyo an advertising paradise, however it is far from it. Advertising in Japan is controlled by two agencies who control almost 60% of the industry and have enough power to force the major publishers to pay not only agency fees but also additional fees to the sales houses who are direct subsidiaries of the agencies, this means that almost 30% of any advertising revenue is getting sent right back to the agency. Needless to say the agencies make a killing but the publishers really struggle to drive revenue growth.

None the less the potential for revenue is enormous, it will be interesting to see over the next five years or so if the dominant global internet publishers working with multi national advertisers can break the hold of the Japanese agencies. If they can, Japan will quickly become the second largest revenue generating market behind the US. While Tokyo is a 9 hour flight from the west coast and a 13 hour flight from New York, it is well worth your time, the people are fantastic, the food is amazing and the sights will blow your mind. And if you are you play your cards right, there is a killing to be made creating efficiencies in the advertising market.