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Press Release

CyberAgent and NTT Com Sign Partnership to Implement DX for Retail Distributors

Ad Business Using Apps and Store Signage to Provide New Revenue for Retail Distributors

Advertising

CyberAgent, Inc.
NTT Communications Corporation
CyberAgent Inc. (Head office: Shibuya-ku, Tokyo; President: Susumu Fujita; TSE: 4751) and NTT Communications Corporation (Head office: Chiyoda-ku, Tokyo; President & CEO: Toru Maruoka; NTT Com) announced on Thursday, August 26, 2021, the conclusion of a partnership to implement digital transformation (DX) for retail distributors (the partnership).

This partnership will provide a next-generation smart advertising platform (the platform) to support creating new business models and marketing innovation at retail distributors by utilizing the strengths of both CyberAgent and NTT Com. The companies aim to use the platform with new advertising media, such as retail distributors' apps and store signage, to establish the advertising business as a new source of revenue for those distributors.

1. Background and the Two Companies

In the U.S., Amazon, as well as major retailer Walmart, which has over 4,700 stores across the country, have been focused on the advertising media business as a central source of new revenue. This business has significantly boosted those companies' performance. Elsewhere, major retailers like U.K.-based Tesco and China-based Alibaba, and Tencent have increased performance from their advertising businesses. More retail companies around the world are interested in entering the advertising business.

Japanese retail distributors, on the other hand, have systems that pose issues setting up a platform for utilizing store and customer data. Also in many cases, their businesses operate with suboptimal workflows that are ill-suited to interdepartmental retrieval and use of data, which prevents accelerating DX implementation. As a result, Japanese retail distributors have not made progress in entering the advertising business, where utilizing data is a necessity.

As a tech company, CyberAgent pursues AI research and UI/UX design and supports companies in promoting DX with its strengths in digitalizing operations and advertising product development. With AI Lab, a research organization that is actively working on the practical application of "economics x AI" to business, such as price optimization and demand forecasting in the retail industry, CyberAgent provides integrated services from purchase experience design to implementation, operation, and analysis, utilizing the expertise of UI/UX design for BtoC*1 service and DSP*2 development.

NTT Com offers ICT services and solutions that "reconnect customers, businesses, and society with new value" in a secure, safe, and flexible manner based on the company's Re-connect XTM business vision. The company is creating the engine for corporate growth by securely, safely, and seamlessly reconnecting data scattered across companies and stores with its data utilization platform that employs the telecom's high-quality infrastructure and technology.

2. Concrete Action Under the Partnership

Given this background, the two companies have signed a partnership to promote DX at retail distributors and will work to support each company's marketing innovation and monetization by entering the advertising business. By introducing the platform, retail distributors will be able to get into the advertising business and secure a new source of revenue without having to build a data manipulation platform from the ground up. This will also eliminate the problem of not having the knowledge and resources required for starting up an advertising business.
Project Overview
1) Implement DX at retail distributors to improve the customer's purchase experience using digital technology
Use AI to offer DX solutions, such as improving the customer's purchase experience by serving optimized ads that are tailored to the customer's interests and lifestyle settings according to data on the local business area, purchase history, etc.

2) Establish new advertising business revenue with apps and store signage
Creating a new business model that yields those distributors' advertising revenue by using retail distributors' apps and store signage to serve optimized ads.

3. The Role of Each Company

 
 1) CyberAgent:

 - Optimize value with AI and economics; AI analysis of alternative data such as local business areas, foot traffic, and purchase data.

- UI/UX design and app development utilizing the company's knowledge in services development.

- Ad serving system and ad menu development with successful DSP*2 development that has the top share of the Japan market.

- Sales to a wide-ranging sales network; operation and analysis of integrated store and app ads.
 

2) NTT Com:


- Supply network services, including mobile.

- Supply signage and IoT equipment needed for serving ads, as well as ICT infrastructure.

- Supply data manipulation platform for accumulating and analyzing data, and use data to implement Smart CX.*3

- Supply CO2 reduction solutions using green energy.

4. Upcoming Rollout

CyberAgent and NTT Com will strengthen the partnership and offer the platform to more retail distributors while utilizing ICT to create a smart society. The companies also aim to improve convenience for retail distributors by exploring how to optimize all business processes and streamlining the implementation of advertising businesses with the latest technology and more robust security services. We will also contribute to environmentally friendly management by building a system that can provide green energy and promote the use of green energy for signage devices.

*1. BtoC: Short for "Business to Consumer." Refers to a form of business wherein a business serves consumers.

*2. DSP: Short for "Demand-Side Platform." Refers to an ad serving platform for optimizing and maximizing the impact of the advertiser's online ads.

*3. Smart CX: Short for "Smart Customer Experience." Refers to a business NTT Com is implementing to strengthen customer touchpoints with DX.