2020.12.8 Column

Digital Advertising in Japan

Japan is the world’s fourth advertising market after China, United States and United Kingdom.

While traditional media, such as television, newspapers and radio, and promotional media, such as OOH advertising, still dominates the advertising scenario in Japan, Digital Advertising is growing at a rapid pace

Especially 2020 has speed up the digital transformation in Japan, increasing the investments in advertising and digital advertising by Japanese companies. 

In this article, we want to introduce you the overall situation and prospective of digital advertising in Japan. 

Japan’s advertising expenditures and future prospective

Japan’s Internet advertising expenditures achieved double-digit growth for the sixth consecutive year in 2019, exceeding Television advertising expenditures and surpassing ¥2,000 billion for the first time.
In general, Japan’s overall advertising expenditure increased for an eighth consecutive year, totaled ¥6,938.1 billion. 

Digital transformation in Japan continues to advance, and 2020 has speed up this evolution, representing the turning point for Japan advertising industry as well. 

In digital advertising, Japan is projected to reach ¥1,780,674 million by the end of 2020. The market’s largest segment is Search Advertising, followed by Banner advertising, and Social Media Advertising and Video Advertising.
Classified advertising is still present, but in a minor part. 

In general, the past years, over 50% of the total revenue of digital advertising in Japan has been generated through desktop.
However, this trend is going to change rapidly over the next few years: in the Digital Advertising market, 48% of total ad spending will be generated through mobile in 2025, turn the current situation around. 

In the end, non-programmatic advertising is losing points for programmatic. 70% of the Digital Advertising revenue will be generated through programmatic advertising in 2025, indeed. 

Digital Advertising: Japan’s overview

Japan is a promising market where doing digital advertising, but it is still a very special market. You should keep in mind the some few points if you want to succeed here!

Also, do not hesitate to contact us if you need assistance or support for you digital advertising campaign in Japan.

Google vs. Yahoo!

Google and Yahoo are the most used search engines in Japan.

In Japan, Google and Yahoo! are the two biggest players in terms of search engine services. 

Founded in 1994 in America, Yahoo! arrived in Japan as a join venture between the American Yahoo! and the Japanese Softbank group, under the name of Yahoo! JAPAN.
Besides the search engine service, Yahoo! JAPAN provides other services, such as “Yahoo! Auction”, “Yahoo! Shopping” and the newborn “PayPay” (an online payment service).

On the other hand, Google is a 100% foreign search engine, founded in America in 1998, and providing several services, such as Google Ads, Gmail, Google Document and so on.

Same service, but different contents. 

Basically, Google works on a robot-based search system, which means that a crawler is used to collect all the information of each page existing on the World Wide Web. These information are thoroughly analyzed before becoming searchable. 

Even if Yahoo! also uses Google’s robot-based system currently, it originally adopted a search engine system based on directories.  This means that all the information was registered manually and, consequently, the search was more accurate than the one performed by a robot-based engine.
However, due to the enormous amount of information, it has become difficult for humans to register it manually, and Yahoo! switched over Google’s algorithm in 2010. 

Yahoo! still has its own filters on search results, and this is why, sometimes, a same content is displayed on the two search engines in a different order. 
56% of Japanese Internet users use Google, while 54% of them use Yahoo!JAPAN as search engine.

Nowadays, in Japan, Google is the most used search engine, especially by youngers.
According to Nielsen, in 2019, 56% of Japanese internet users used Google, while 54% of them used Yahoo!JAPAN

Especially youngers use Google, while elders are used to use Yahoo! JAPAN. This difference is basically related to a matter of trust: Google is still a fully American service, while Yahoo! JAPAN has a Japanese part. This is a key point when speaking about reliability in Japan. 

Focusing on Mobile rather than Desktop

In Japan, most of internet users access to internet using a mobile phone. At the beginning of 2020, mobile internet users were 80% of the total internet users and the web traffic from mobile is increasing year after year. 

Japan is the fourth mobile advertising market.

Also, in terms of digital advertising, Japan is the world’s fourth mobile advertising market after US, China and UK, with a +12% yearly growth (comparison between 2019 and 2020).  

Rather than mobile web, in-app advertising, such as on Social Media channels, is preferred by Japanese marketers, because of retargeting. 

Also, around 60% percent of Japanese people own a Iphone as smartphone, and use Safari as search engine, which is based on Google. It is important to keep in mind when planning an advertising campaign in Japan. 

Social Media Advertising

Photo by Merakist on Unsplash

As in the rest of the world,Social media channels, Japan is quite particular too.
For instance, if you work in B2B, you will probably think about LinkedIn as Social Media where to invest on. Unfortunately, you will soon discover that LinkedIn is not very popular in Japan, and Japanese people prefer Facebook in business. 

Compared to the worldwide average, daily time spent on Social Media at the beginning of 2020 was at the shortest in Japan, and individual use of Social Media for work was very lower compared to the worldwide average. 

However, Covid-19 pandemic increased the use of Social Media by +30% and Twitter has totaled +67% in usage. And this figure is projected to increse in the next years.

Covid-19 pandemic has also changed the marketing strategy of Japanese companies, forcing them to review their plans and focusing on digital. 

57% of Japanese have increased their budget in Social Media communication and advertising activities during Covid-19 pandemic.

According to a survey by Agile Media Network, 57% of the Japanese respondent stated that they have increased their budget in Social Media communication and Social media Advertising activities during Covid-19 pandemic.  

Social Media Advertising in Japan shows +5.6% annual growth.

In fact, Social Media Advertising segment is projected to reach JP¥273,462m in 2020 and it shows an annual growth rate of +5.6%.
In particular, the market share of Facebook ads amounts to an estimated 75% of the Social Media Advertising segment in 2019 in Japan. 

Not only Facebook, but also Twitter and Youtube are interesting channels where to invest on.
At Bigbeat we have helped many of our B2B clients starting brilliant Social Media advertising campaigns on these three channels.
If you are interested in starting a campaign in Japan, do not hesitate to contact us for support!

Search Ads, Display Ads, Video Ads

Photo by Launchpresso

According to a research by Dentsu Inc., in cooperation with D2C Inc. and cyber communications Inc., about Internet Advertising Media Costs in Japan, in 2019, Search Ads (40.2%) and Display Ads (30%) has the highest compensation ratio. 

However, Video advertising grew significantly last year, +157.1% compared to 2018. It is projected to reach ¥359.7 billion by the end of 2020, +113% compared to the previous year. 

Also, in B2B, video advertising is increasing popularity. Videos help people to understand better and simplify difficult concepts and sympathize better with a brand or product/service. 

Besides the ratio of Search ads, Display ads or Video ads in Japan, we anyway suggest you focus on the goal of your campaign and on which ads suits better your target audience and your needs. 

Challenging on Digital Advertising in Japan

Japan’s digital advertising segment is on a rapid growing pace and it could be a very profitable market. However, Japan is a very peculiar market, and many companies tend to just translate the digital marketing strategy they use in their home Country and replicate it in Japan. 

For instance, in Japan, English is not used by most people and, so, Japanese is preferred also for digital advertising. Japanese is also a very complicated language, with four writing systems used at the same time, and we believe that having a Japanese marketing agency in Japan helping and supporting you in finding the right keywords, the right tool and, of course, the right CTA message is the keystone for the success of your digital campaign in Japan!

It is not only a matter of language barrier. Japanese culture is also very peculiar, as well as digital environment
Besides Google and Yahoo! Japan, different Social Media, which remains critically important both in terms of branding and awareness building activities in Japan, could be a big obstacle for the ROI of you campaign. However, in Japan as well, creating great content is not enough; social media advertising must be included as part of any serious media strategy.

Video advertising grew significantly last year, +157.1% compared to 2018

Also, with the biggest brands all investing heavily in video marketing as of late, even medium-sized brands must step up their advertising efforts here.

At the end of the day a comprehensive digital advertising plan for Japan that takes into consideration multiple channels, the customer experience, and that is well-targeted for your audience will still go far in positioning your brand for success in the Japanese market.

Are you ready to start your successful advertising campaign in Japan?

Bigbeat Inc. has 25 years of experience in B2B marketing. If your company is considering to create a digital advertising campaign in Japan, or if you need further information or assistance, do not hesitate to contact us!

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