Tissue Packs Pocket Customers for Marketers From Japan to America

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The successful and measurable Japanese marketing tactic of promoting products and services through the distribution of pocket tissue packs carrying ad messages to consumers has made its way to the United States through AdPack.

AdPack was born out of ITOCHU International Inc., a wholly owned American subsidiary of ITOCHU Corp., a Japanese company headquartered in Tokyo with about $100 billion in annual sales. ITOCHU is a global Fortune 100 company with offices in 80 countries. ITOCHU Corp. was founded in the 1870s, and ITOCHU International was organized in the United States in 1952.

ITOCHU's main business has always been that of a trading company, buying products in one market and reselling them in another market worldwide. The company began acquiring both its downstream and upstream resources 40 years ago because as a trader its margins are very narrow, said Steve Jacobs, AdPack sales manager for ITOCHU International, New York.

AdPack is part of ITOCHU's paper division, which owns 300,000 acres of eucalyptus forest in Brazil. The parent firm is the major stakeholder in Brazil's largest paper mill. It grows fiber and makes pulp for many of the tissue manufacturers worldwide only in a supplemental sense because the paper products manufacturers also own their own forests.

Hence the tissue pack marketing.

"In Japan alone, over 4 billion packets of pocket-size tissue packs are used annually in intercept marketing," Mr. Jacobs said. "So, on the street, in Japan in almost any city you can walk down the street and be handed a pack of tissues with an advertisement on it."

Four billion pieces represent about 1 billion yen or $100 million a year, he said. Looking at that business model in Japan, ITOCHU decided that, with its resources in paper and tissue, it would make sense to take that product to the United States to seek a similar market.

That was about 18 months ago, and AdPack launched its first effort on behalf of New York-based Japanese restaurant chain Yoshinoya about a year ago.

"The very first stuff that we did was with Japanese advertisers that were familiar with the concept," Mr. Jacobs said. "We did an intercept marketing program for Yoshinoya where we handed out 20,000 packs of facial tissues with a coupon, and our experience with that was that people were very willing to accept a handout when it was a package of facial tissues and that the coupon redemption rate at the stores was in excess of 4 percent."

He characterized the redemption rate as exceptionally high for coupons.

In terms of cost, Mr. Jacobs said that a tissue pack typically can be given away for a quarter or less. Adding the coupon makes it a measurable promotional marketing tool.

A new account for AdPack is Commerce Bank, which has 360 branches mostly in the Northeast as well as six in Florida. The bank aims to have 600 branches by the end of 2009, Jacobs said.

"We just entered into a rather large contract with Commerce Bank, which is using our tissue products to distribute at events they sponsor, in their branches and in front of their new branches," Mr. Jacobs said. "They are using the pack and including a coupon for $20 with the opening of a new account."

The bank's first use of the pack was at a New York Islanders hockey game March 10 at Nassau Coliseum, where it handed out 5,000 tissue packs. Commerce is a sponsor of the team.

Consumers were very receptive, with some coming back for more. But Commerce said that it would take 60 to 90 days to evaluate coupon redemption.

"Commerce Bank is so excited about this program that they feel it is the most innovative product they have used since their inception," Mr. Jacobs said. "Commerce is a very active user of promotional products. They use a ballpoint pen that they buy about 30 million units a year of and feel that this product offers more advertising space as well as the ability to deliver a coupon."

Commerce Bank has suggested to AdPack that this product could be something it uses in the millions, he added.

Another AdPack opportunity is Tissue Box Donations, a program where sponsors can advertise on tissue boxes that are sent to schools.

"We developed an opt-in list of 17,000 schools across the country that accept these donations, and we're offering advertisers the opportunity to sponsor those donations and put their message on the box," Mr. Jacobs said. "We're very careful about the advertisers, and it has to be a non-controversial ad."

Every package sent to a school includes a letter asking the administration to review the messages prior to placing the boxes in classrooms.

AdPack is also ready to launch a promotion in doctors' offices with a Johnson & Johnson company for a pharmaceutical product. It also has formed a relationship with buzz marketing company Go Gorilla in New York to find marketers interested in testing campaigns using anti-bacterial wipes instead of tissue packs.

For more information about AdPacks, e-mail adpack-sales@itochu.com.

Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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