Hakuhodo Inc.

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Founded in Tokyo, 1895; adopted the name Hakuhodo Inc., 1955; established a joint venture with McCann-Erickson to create McCann-Erickson Hakuhodo Co., Tokyo, 1960; entered into an affiliation with SSC&B:Lintas Worldwide, 1982; opened an agency in the Netherlands with TBWA Group, 1992; sold stake in McCann-Erickson Hakuhodo to McCann, 1993; created G1 Worldwide with TBWA, 2000; formed holding company Hakuhodo DY Holdings with Daiko Advertising and Yomiko Advertising, 2003.

Hakuhodo was founded in 1895 by Hironao Seki as an advertising space broker specializing in placing advertising for companies in the publishing business, such as bookbinders and paper dealers. In 1910, the company, then known as Naigai Tsushinsha, began publishing the daily Naigai Tsushin.

Post-war expansion

It was not until 1947—when Japan was in the midst of a severe depression following World War II—that the agency added its first client outside the publishing business. A year later, the company launched the marketing communications publication Monthly Hakuhodo, which was later renamed Kohkoku (and revived in 1978), and in 1950 the company name again changed, this time to Naigai Tsushinsha Hakuhodo. The following year it entered the radio advertising market, adding TV advertising and sales promotion in 1953. One client in particular spurred its move into TV: Sanyo Electric Company Ltd., which wanted to use the medium to promote its TV sets.

In the late 1950s, the agency—which had changed its name to Hakuhodo Inc. in 1955—adopted a more American-style advertising structure, setting up an account executive system and establishing a planning department that included planning, research and creative functions and a public relations division. As a result, Hakuhodo grew rapidly, expanding over a five-year period from 209 employees to more than 1,000.

In 1960, the agency entered a partnership with McCann-Erickson to create McCann-Erickson Hakuhodo Co. in Tokyo. In 1994, McCann bought Hakuhodo's share of the agency, and it became McCann-Erickson Japan, one of the relatively few foreign-owned agencies in the country. Another foreign foray came in 1973, when the agency formed an alliance with South Korea's Cheil Communications, with Hakuhodo training employees for the then-new Cheil; a joint agency, Hakuhodo Cheil, was established in Seoul.

In 1972, the Seki family, which had headed the agency since its founding, was forced out. With its business in internal turmoil, Hakuhodo went outside to hire Michitaka Kondo, the former commissioner of the Japanese National Tax Administration, as its new president-CEO in 1975. The unprecedented move helped restore the agency's image, and business began to improve. In 1978, Advertising Age ranked Hakuhodo as the No. 10 ad agency in the world by gross income.

In 1982, the year it entered into an agreement with SSC&B to form Hakuhodo: Lintas, Tokyo, the agency also announced it was adopting "Marketing Engineering Company" as its corporate philosophy. This was a new concept in Japan, where agencies had traditionally focused solely on advertising rather than on an all-encompassing marketing strategy. In 1991, it updated the philosophy to "Grand Design Partner," which established its reputation as a cutting-edge agency in the Japanese advertising market.

Deal with TBWA

In 1992, it entered into an agreement with TBWA Worldwide, setting up TBWA/Hakuhodo in the Netherlands. In 2000, the two agencies expanded their association to create G1 Worldwide, with offices in Japan, Europe and North America, to handle Nissan Motor Co.'s $1.1 billion global account; both had worked on the account in their respective regions of the globe.

In 2000, Hakuhodo expanded into several new-media areas. It established Hakuhodo i-studio, an Internet boutique shop, and it entered a joint venture with Japan's No. 3 agency, Asatsu-DK, and mobile phone company KDDI to form A1 Adnet Corp., an agency specializing in creating ads for Japan's Internet phone services and developing e-mail campaigns targeted at Internet phone users.

By 2001, Hakuhodo was the No. 2 agency in Japan. In October 2003, the agency joined with Daiko Advertising and Yomiko Advertising to form the umbrella group Hakuhodo DY Holdings. In 2003, the new company ranked as the No. 8 marketing organization in the world with worldwide income of $1.2 billion, according to Advertising Age. Hakuhodo had worldwide revenue of $898 million, up 4.3% from 2002, with 4,300 employees and 60 offices worldwide.

In 2004, TBWA hired Tim Love, vice chairman-international at Saatchi & Saatchi, New York, to oversee TBWA’s relationship with its largest global client, Nissan. Mr. Love moved to Tokyo as president-global clients and co-chairman of the G1 Worldwide joint-venture between TBWA and Hakuhodo.

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