Reinforcing Human Resources
and Sustainable Management

Under its Medium-Term Business Plan, which runs through the fiscal year ending March 31, 2024, the Hakuhodo DY Group has adopted the following Core Medium-Term Strategy: “With Sei-katsu-sha Insight as our cornerstone, the Hakuhodo DY Group will combine its creativity, integrative capabilities, and data and technology utilization skills to play a leading role in evolving companies’ marketing activities and generating innovation in a completely digitalized era. In this way, we will continue to impact and provide value to sei-katsu-sha and society as a whole.”
Over many years, we have closely observed and researched sei-katsu-sha and have accumulated a vast amount of data while doing so. As an advertising company, we have conventionally been asked to give shape to ideas that make advertisements more interesting and enjoyable. In recent years, our ideas have become more refined not only through our past experience and sensibilities but also through the full utilization of sei-katsu-sha data that we collect in real time. By doing so, we have been able to implement and realize specific initiatives that meet social needs and bring joy to people’s lives. Put simply, the method that has made such accomplishments is full-funnel Sei-katsu-sha Data-Driven Marketing.
Now that we are able to acquire vast amounts of data, implementing Sei-katsu-sha Data-Driven Marketing not just in the marketing communication domain, which centers on brand recognition, but also under a full-funnel approach will be crucial to meeting the needs of our clients. We find ourselves in an era when simply placing advertisements is not necessarily enough to sell a product. Under these circumstances, it is important that we consider not just advertising but also the kinds of information that will resonate with sei-katsu-sha and the kind of locations where sei-katsu-sha will interact with such information, such as in stores or on e-commerce sites. To that end, we need to implement a comprehensive approach that covers everything from cultivating sei-katsu-sha awareness, interest, and consideration to customer relationship management.

Hakuhodo DY Holdings was founded in 2003 as a joint holding company comprising the three advertising companies Hakuhodo Inc., Daiko Advertising Inc., and YOMIKO ADVERTISING INC. Since its founding, the Company has strengthened its operations in digital domains by making D.A.Consortium Inc. and IREP Co., Ltd. consolidated subsidiaries and has expanded its overseas businesses centered on the strategic operating unit kyu. Now, the Hakuhodo DY Group’s domestic and overseas business portfolio spans the core domain of marketing communications and domains such as media, consulting, brand agencies, digital agencies, and technology. With this diverse business portfolio and range of divisions, we have grown to a level where we can provide solutions that cover corporate activities in their entirety, including offering solutions to not only our clients’ advertising divisions but also their sales, consulting, and product development divisions. As a result, billings from media, which used to account for over 90% of our total billings, now comprise just over half, with billings from all other business domains comprising the other half. In this way, we have transformed from an advertising company to a group of marketing companies.
In addition, the ability to drive innovation is a new form of value we provide. We are now in an era when companies will quickly fail if they do not strive to create new value, and if we do not understand what sei-katsu-sha and society as a whole desire, then we will be unable to spur innovation. To that end, it is now more important than ever to observe how people think and act and to use data to make predictions about the new generation. Our extensive volume of data does not yield value in its raw state. Rather, it is what we can glean from the data that provides us with a significant competitive advantage. We will therefore leverage the creative know-how that we have accumulated through the creation of advertising that resonates with sei-katsu-sha and society to detect portents of change and predict the future. Fully leveraging the data and technologies we possess, we will evolve our clients’ marketing activities and drive innovation.

Expansion of Our Marketing Services

A framework for leveraging creativity to drive innovation is the “co-creation model.” This model involves the origination of new wisdom and ideals by bringing together eclectic talents. Interactions between personnel from domains other than advertising, personnel with unique value systems, and personnel who embody diversity, equity, and inclusion (DE&I) are what gives rise to excellent ideas and help us enhance the value we offer.
We have adopted strengthening human capital as an important theme of our Medium-Term Business Plan and are implementing further investment in human resources. We are also placing emphasis on establishing work environments in which our employees can demonstrate their creativity to the greatest extent possible. As part of these efforts, we are developing workstyles responsive to the needs of diverse personnel, including the introduction of flexible work hours, and effective utilization of teleworking. We are also encouraging our employees to make use of childcare leave and other holiday systems. Through such environments, our employees will be free to pursue the challenges that interest them while exchanging ideas with each other. In turn, this will help us implement even better corporate activities and give us the power to create an even better society.

A pioneering and innovative corporate culture has taken root in the Group. Our employees are constantly considering new ideas in various domains, asking “Wouldn’t it be more interesting if we tried this?” and “Wouldn’t this be better if it could meet these needs?” As technologies evolve and our business domains expand, we gain even more opportunities to take on new challenges. I therefore believe we can become a corporate group that devises even more advanced, state-of-the-art innovations.
Technology is essential for maximizing the strengths of this corporate culture. We are in an era where feelings and sensibilities alone are no longer enough to achieve innovation. With that being said, we cannot create even better things for sei-katsu-sha using only technologies and data. What is important in this era is to combine creativity and technologies to turn ideas that are truly useful to sei-kat-susha into products and services. Accordingly, we need to step up initiatives to do exactly that.
For example, IDEO LP, a design and innovation firm under the umbrella of the strategic operating unit kyu, has a human-centered design thinking approach and corporate philosophy. By leveraging technology to an even greater degree, IDEO is striving to generate new ideas that can be turned into new business.
Domestically, we established HAKUHODO Technologies Inc. in April 2022 to develop technology and serve as a shared core platform for the Group. HAKUHODO Technologies launched with just over 200 specialists, streamlining resources from within the Group, and we are now striving to recruit and develop 100 additional engineers from external sources. Through the true integration of creativity and technology, HAKUHODO Technologies will become an organization fundamental to the acceleration of innovation in our marketing business.
Additionally, at the MIRAI Business Division, an organization jointly operated by Hakuhodo and Hakuhodo DY Media Partners that specializes in new business creation that extends beyond the advertising business, we aim to establish Group-owned large-scale businesses in collaboration with a wide range of external partners. Through new business creation that leverages our ultimate creative strength, sei-katsu-sha insight, we will take on the challenge of creating new lifestyles and shaping the future of society.
At the UNIVERSITY of CREATIVITY (UoC), a learning platform that researches, develops, and experiments with creativity as a technology for shaping the future, we are gathering knowledge and wisdom from around the world. The UoC serves as a place for generating new ideas and pursuing the infinite knowledge and wisdom that the world has to offer through internal and external collaboration.

Taking On Challenges in New Domains

One major initiative under the Medium-Term Business Plan is to strengthen our foundation for sustainable business management. In order for us to help improve society, it is essential that we ourselves evolve into a sustainable corporate group.
In April 2022, we launched the Hakuhodo DY Group Sustainability Committee and established the Sustainability Office. Through this division, we will, in line with our business strategies, respond as a Company to stakeholder engagement and carbon neutrality, as well as undertake various initiatives related to management matters such as supply chain management, human rights, and diversity.
In fiscal 2022, we established and disclosed environmental targets in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We also determined new greenhouse gas (GHG) reduction targets to serve as an indicator of progress in reducing our total GHG emissions. Specifically, we aim to achieve a 50% reduction in CO₂ emissions (scope 1 and scope 2) by fiscal 2030, compared with fiscal 2019, and to become carbon neutral by fiscal 2050. To reach these targets, we are taking appropriate action to further reduce our environmental impact, including introducing renewable energy in our offices. In this manner, we will strive to realize a carbon-neutral society.
Also in fiscal 2022, we established new indicators for monitoring progress in tandem with the revisions to our material issues (materiality). Guided by a new structure and policy, we will push forward with efforts to accomplish our sustainability goal of realizing a society in which sei-katsu-sha can flourish and live active lifestyles of their choosing. Our newly established materiality will be incorporated into the next Medium-Term Business Plan.

Our sustainability goal is essentially about enabling all people to live better lives and feel comfortable wherever they may be, and this is precisely why sei-katsu-sha insight is so important to achieving this goal.
To realize this sustainability goal, the first step is to ensure that all Group employees are living active and fulfilling lifestyles in whatever life stage they are at. This will enable our employees to have a positive impact on those around them and on society as a whole within their work and daily lives. There are already several examples of our leadership in bringing new value to society and impacting it positively through collaboration with other companies and organizations. The following section of this report introduces some of these examples.
I firmly believe that continuing to foster sustainable management and enhance sustainability awareness among our employees will lead to an even better society. We will therefore continue to pursue sustainability initiatives unique to the Group.