Mobile Leads Online Ad Spend in Japan

JANUARY 2, 2008

Handsets are primed for marketers.

In 2007, the Japanese online advertising market was estimated to be worth between $3.4 billion (Dentsu) and $4.1 billion (PricewaterhouseCoopers). By 2011, Dentsu projects that Japan’s online ad market value will be $6.8 billion; PricewaterhouseCoopers predicts a somewhat higher $7 billion.

Japan’s leading advertising agency, Dentsu Group, tracks the island nation’s online advertising market in three segments: search ads, mobile ads and fixed Internet ads, a category that lumps together banner, e-mail, rich media, streaming video and (non-search) text advertisements.

By Dentsu’s reckoning, search spending accounted for 27% of Japan’s online ad marketing in 2007, a figure significantly lower than in the United States (40%) and the United Kingdom (60%). By 2010, Dentsu predicts search will reach just 30% of Japanese online ad spending.

Dentsu also estimated that Japan’s mobile ad market grew by 42.5% in 2007. Mobile advertising is expected to remain the fastest-growing segment through 2010. Dentsu forecasts double-digit growth for the entire Japanese online ad industry to 2011, when growth is expected to slow to 9.6%.

Online advertising grew from 3% to 6% of all ad spending between 2004 and 2006, according to Dentsu research.