Japan Online Advertising Industry Growth and Forecast 2016

  • November 2011
  • -
  • Ken Research Private
  • -
  • 42 pages

Summary

Table of Contents

Executive Summary

In 2010, the advertising industry accounted for around 34.4% of the total service sector revenues and online/ digital advertising is a major part of this industry. Online advertising industry is being driven by the increasing broadband penetration, education, income, rising number of internet users as well as popularity of social networking websites. During the recent economic slowdown, a reduction in marketing expenditure by companies was witnessed, of which advertising cost was the highest and marketers began opting for low cost and effective advertising mediums, thereby, driving the growth of the online/ digital advertising market. The online advertising industry is of various forms, but the most popular are digital search advertising, followed by display and classified advertising.
The online advertising industry has been in existence in Japan for around ten years and has grown to become larger than many traditional formats of advertising such as print, radio, etc. Although, in 2009, the industry registered a slowdown in growth, in 2010 the Japanese internet advertising started registering recovery and the market grew 8.30%. Japanese online ad market is at a major point of transition, in 2005 while the display category accounted for more than 50% of the market share, it is predicted that in coming years, the search and mobile will take a greater share of the market.
Among the various segments, search engine advertising has continued to register growth, due to ad spend by companies in the finance, real estate, travel and distribution sector. On the other hand, display advertising saw a decline in expenditure in 2010, due to reduction in public sector ad budgets and increased competition among the industry players. Mobile advertising segments in terms of growth is keeping pace with the online advertising, due to increased adoption of smartphones, rapid growth of advertisers on SNS sites and ad placements by content providers.
When compared to 2009, in 2010, industries that spent the highest in online advertising were household products, information and communications, apparel, accessories and personal items, energy/materials and machinery, home appliances, cosmetics and toiletries, food and other services, as well as finance and insurance. Prior to recession, real estate, financial services and automotives were the three largest segments. Sectors that have reduced ad budgets include companies in the public sector, hobby and sporting goods, pharmaceutical industry, automotive industry, beverages and tobacco. Japan’s online advertising market is currently dominated by Yahoo! Japan and Google.
The report on “Japan Online Advertising Industry Growth and Forecasts 2016” includes a detailed study of the global advertising as well as Japanese online advertising industry. We have also analyzed the industry and its various categories/ segments and trends prevailing in the market. The report also includes the industry, present performance and forecast of its various segments. Additionally, we have discussed cause and effect relationship of macroeconomic and industry factors on the industry providing the basis for the future outlook.

KEY FINDINGS

• In 2007 & 2008, Japan’s online advertising market registered a small growth and in 2009, the industry was worth an estimated USD ~ billion.
• In 2010, the expenditure on online advertising increased 8.30% YTY, to USD ~ billion. Internet advertising placements increased 10.17%, despite the slowdown in growth in 2009 due to the global economic downturn.
• In 2010, web advertising (PC-based Internet) grew 8.80% compared to 2009, to USD ~ billion (including search engine advertising)
• in 2010 display spending was USD 3.35 billion compared to USD 2.56 billion search advertising revenues.
• Expenditure on search engine advertising has continued to rise, increasing 16.37% to USD ~ billion. The market continued to record a steady growth due to ad spend by companies in the finance, real estate, travel and distribution sector.
• Mobile advertising in 2010, increased 19.47% from 2009, to USD ~ million (including mobile search engine advertising),
• Japan’s online advertising market is currently dominated by Yahoo! Japan and Google. Yahoo accounts for ~% of the overall market, followed by Google ~%.
• During 2011 and 2012, advertising revenues is expected to be low while showing a positive trend and soon it is expected to recover from the economy losses made by recession and then Tsunami and Earth quake.
• Online video advertising is an emerging segment and expected to grow with a CAGR 4.60% and generate more revenues in the coming five years. E-commerce is also expected to become a major driving factor behind online advertising growth in Japan.
• The overall online advertising industry is expected to grow at CAGR 4.51% from 2011-2016,

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