Japan Online Advertising Industry Growth and Forecast 2016


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Japan Online Advertising Industry Growth and Forecast 2016

  1. 1. EXECUTIVE SUMMARYIn 2010, the advertising industry accounted for around 34.4% of the total service sectorrevenues and online/ digital advertising is a major part of this industry. Online advertisingindustry is being driven by the increasing broadband penetration, education, income, risingnumber of internet users as well as popularity of social networking websites. During therecent economic slowdown, a reduction in marketing expenditure by companies waswitnessed, of which advertising cost was the highest and marketers began opting for low costand effective advertising mediums, thereby, driving the growth of the online/ digitaladvertising market. The online advertising industry is of various forms, but the most popularare digital search advertising, followed by display and classified advertising.The online advertising industry has been in existence in Japan for around ten years and hasgrown 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 Japaneseinternet advertising started registering recovery and the market grew 8.30%. Japanese onlinead market is at a major point of transition, in 2005 while the display category accounted formore than 50% of the market share, it is predicted that in coming years, the search andmobile will take a greater share of the market.Among the various segments, search engine advertising has continued to register growth, dueto ad spend by companies in the finance, real estate, travel and distribution sector. On theother hand, display advertising saw a decline in expenditure in 2010, due to reduction inpublic sector ad budgets and increased competition among the industry players. Mobileadvertising segments in terms of growth is keeping pace with the online advertising, due toincreased adoption of smartphones, rapid growth of advertisers on SNS sites and adplacements by content providers.When compared to 2009, in 2010, industries that spent the highest in online advertising werehousehold products, information and communications, apparel, accessories and personalitems, energy/materials and machinery, home appliances, cosmetics and toiletries, food andother services, as well as finance and insurance. Prior to recession, real estate, financialservices and automotives were the three largest segments. Sectors that have reduced adbudgets include companies in the public sector, hobby and sporting goods, pharmaceuticalindustry, automotive industry, beverages and tobacco. Japan’s online advertising market iscurrently dominated by Yahoo! Japan and Google.The report on “Japan Online Advertising Industry Growth and Forecasts 2016” includes adetailed study of the global advertising as well as Japanese online advertising industry. Wehave also analyzed the industry and its various categories/ segments and trends prevailing inthe market. The report also includes the industry, present performance and forecast of itsvarious segments. Additionally, we have discussed cause and effect relationship of 2
  2. 2. macroeconomic and industry factors on the industry providing the basis for the futureoutlook.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, 3
  3. 3. TABLE OF CONTENT1. Global Advertising Industry1.1. An Overview1.2. Japan Online Advertising Industry: Overview2. Japan Online Advertising Market Size2.1. Online Advertising by Category2.1.1. Search Advertising2.1.2. Display Advertising2.1.3. Mobile Advertising2.2. Online advertising demand by Industry3. Industry Trends and DevelopmentsDentsu and Skype to launch display advertising offering in JapanPopularity of Mobile internet in JapanIndustry CompetitionJapan’s Online Display Advertising Leaders4. Growth Drivers4.1. Rising Number of mobile Phone users and demand for Mobile Advertising4.2. Internet users4.3. Broadband connections4.4. Japan Ecommerce Market5. Macro Economy Factors5.1. Gross Domestic products5.2. Population5.3. Import/Export5.4. Annual Household Income6. ForecastSearch Advertising 4
  4. 4. Display AdvertisingMobile Advertising7. Industry Players7.1. Dentsu Inc.7.1.1. Business overview7.1.2. Financial Performance7.1.3. Business Developments7.2. ASATSU-DK Inc.7.2.1. Business Overview7.2.2. Financial Performance7.2.3. Business Developments8. Forecast MethodologyData Collection MethodsApproachReasons for the Selection of Independent VariablesMulti Factor Based Sensitivity ModelFinal ConclusionDisclaimer 5
  5. 5. LIST OF FIGURESFigure 1: Global Advertising Revenues (2006-2015F)Figure 2: Global Online Advertisement Spending (2006-2015F)Figure 3: Advertising Expenditure by Media Categories in 2010Figure 4: Online Ad Spending in Japan (2006-2010)Figure 5: Online Ad Spending by Segments in Japan (2006-2010)Figure 6: Online Search Advertising Spending (2006-2010)Figure 7: Online Display Advertising Spending (2006-2010)Figure 8: Online Mobile Advertising Spending (2006-2010)Figure 9: Global Adoption of Smart phones in 2010Figure 10: Japan Online Advertising Market Leaders, share in % (2010)Figure 11: Japan Total Population (2006-2010)Figure 12: Japan Online Advertising Industry Revenue Forecast (2010-2016)Figure 13: Japan Online Search Advertising Industry Revenue Forecast (2010-2016)Figure 14: Japan Online Display Advertising Industry Revenue Forecast (2010-2016)Figure 15: Japan Online Mobile Advertising Industry Revenue Forecast (2010-2016)LIST OF TABLESTable 1: Industry Ranking For Online Advertising in 2010Table 2: Smartphone Audience in Japan by Leading CompaniesTable 3: Top Online Display Vendors in 2010Table 4: Leading Online Advertising Agencies in Japan (2006-2010)Table 5: Japan Internet Users and % of Population (2007-2010)Table 6: Japan Mode of Internet Access and PopulationTable 7: Japan leading Online Retail Sites and their Reach in 2009Table 8: Japan GDP and Advertising Expenditure (2006-2010)Table 9: Japan Total Import/Export (2006-2010) 6
  6. 6. Table 10: Dentsu Inc. Net Sales and Net Income (loss) (2006-2010)Table 11: ASATSU-DK Inc. Gross Billings by Segments in 2010Table 12: ASATSU-DK Inc. Gross Billing and Gross Profit (2006-2010)Table 13: Macro-Economic and Industry FactorsTable 14: Dependent & Independent Variables (2006– 2010) 7