Medium-Term Business Plan
From March 2025 to March 2027
〈Announced in June 2024〉
Hakuhodo DY group made public its Medium-Term Business Plan (MTBP) covering the three-year period to FY2026 (document for the results briefing in June 2024).
An outline of the MTBP follows.
Business Environment
Megatrends
The business environment surrounding our Group has been undergoing a major, unprecedented paradigm shift, which will require constant transformation.
Changes in Society
We have moved from the “to C” era, meaning unilateral communication from businesses, to the era of “with C,” meaning the advent of a society driven by sei-katsu-sha who are at the center of everything we do. In addition, sustainability is fast becoming a defining factor for the activities of sei-katsu-sha and businesses. In short, we have entered a new era in which we must focus on the “two Ss” – sei-katsu-sha and sustainability.
Changes in Technology
The rapid advancement of technology is redefining the industrial structure, the business structure, and the role of humans. It will be increasingly important to boost the capacity and potential of human beings, and maximize value added through cocreation between humans and technology.
Changes in Business needs
This substantial change in the environment is also changing business needs.
Amid market maturity and disruptive innovation, companies are increasingly committed to radical business transformation. Against this backdrop, advertising cannot simply focus on the traditional question of “what to communicate.” The focus must now be on questions like “what value to create,” reflecting the needs for consulting upstream, as well as “how to maintain connection with sei-katsu-sha,” in order to meet the needs for CRM and digital marketing.
Business needs are now moving beyond advertising, in search of solutions to broader issues.
In this era of unceasing transformation, our Group formulated a Global Purpose and Ideal Form to support our efforts with solid values. To express “why our Group exists” and “why we work for this Group,” the Global Purpose was formulated through a process of reflection that lasted for almost six months, involving Group companies both inside and outside Japan.
Global Purpose and Ideal Form
Global Purpose
This is the Global Purpose of the Hakuhodo DY Group:
Ideal Form
To achieve this Global Purpose, the Hakuhodo DY Group seeks to evolve outside the framework of “a group of advertising companies” into “a creativity platform.” We aim to produce our own growth, creating new relational value by connecting everything inside and outside the Group including people, businesses, ideas and technologies, and scaling up the network thus developed.
Six Business Domains
Six Business Domains Comprising Our Creativity Platform
We have identified the following six business domains in which we can create new relational value with sei-katsu-sha-centered creativity.
Business Structure reform
We define the three years of the new Medium Term Business Plan as a period to enhance profitability and create growth options by reforming our business structure with the following three objectives. The six business domains will grow as different business models to drive business restructuring through mutual interaction.
(1) Restructuring of marketing business
Given that clients mainly need to tackle integrated marketing, we will enhance our capabilities in digital marketing and commerce business to build a structure for designing and delivering optimal services in this domain.
In addition, we will develop Creativity Engine Bloom, an integrated marketing platform to raise the sophistication and efficiency of integrated marketing. This system will enable sei-katsu-sha data and AI technology to be used in our day-to-day operations.
Digital marketing
In the digital marketing domain, we aim to capture the No.1 market share in the industry with Hakuhodo BY ONE as the core component to pool our Group-wide resources and know-how, through better competitiveness, productivity, and profitability.
Commerce business
In response to dramatic changes in shopping behavior, we aim to be a business transformation partner in commerce by designing 360 shopping experiences from the perspectives of both shoppers and sellers.
Harnessing our own sei-katsu-sha data and creativity, we are committed to promoting broad business transformation around shopper experience at the core.
(2) Creation of new growth options
We will invest in the consulting, technology, content and incubation business domains as necessary to build operating bases for growth into future pillars of profitability for the whole Group.
(3) Remodeling of global business
Our strategic business unit, kyu, has successfully expanded our business in the US and Europe by adding innovative companies to the Group. Meanwhile, Hakuhodo has led our efforts in Asian markets by providing marketing support for Japanese and local companies and enhancing digital marketing capabilities.
Over the coming years, the two business units will enhance their responsiveness to the emerging needs of our clients through collaboration in the digital marketing domain, forming a unique “modern network.”
We will also promote additional initiatives to enhance our Group competitiveness.
Use of AI
With regard to AI-related business, we launched the Human-Centered AI Institute as a laboratory for advanced R&D on AI technology with a human-centered approach. The Institute will harness research on AI technology while integrating creative know-how to augment human creativity for various tools on the integrated marketing platform.
Reinforcement of business infrastructure
We will continue to enhance horizontal coordination functions around the two functional companies launched under the previous Medium-Term Business Plan to reinforce our Group competitiveness.
In addition to promoting these efforts to reform the business structure, we will also carry out the following initiatives toward sustainability.
Sustainable
Management
We aim to create social value with human-centered sustainable management. To that end, we are committed to creating a society where sei-katsu-sha have many aspirations and can live vibrant lives by developing human resources who can identify solutions to social issues, in addition to taking various actions from the ESG perspectives.
Actions to ensure compliance
We are taking concrete measures to ensure compliance, and improve and strengthen its governance structure.
In addition to controlling Group-wide compliance activities through the Group Compliance Committee, chaired by the President of Hakuhodo DY Holdings and with members including the Presidents of Group companies, we are enforcing strict compliance at the level of each Group company.
Hakuhodo and Hakuhodo DY Media Partners have also established a Business Awareness/Action Reform Committee to promote compliance as a confidence-building measure.
Furthermore, we have established a Group Compliance Division to promote compliance initiatives in the whole Group.
Medium-Term Business Targets
We have set the following indicators to be monitored under the MTBP in attaining the medium-term business targets.
Long-term future outlook
Through ongoing transformation of the business structure under the current MTBP and beyond, we aim to develop a structure where some 50% of the profit in fiscal 2031 will come from growth domains*3
Extension of relationship value created by the Group
Building on the newly formulated Global Purpose, we aim to evolve outside the traditional framework of a “group of advertising companies” and into a “creativity platform” with strengths in six business domains.
To that end, we seek to increase our business value through solid growth in the longer term, while carrying out dynamic business restructuring and transformation.
