The document presents an overview of Japan's digital landscape as of December 2010, indicating a high internet penetration rate of 78% with significant increases in mobile and social media usage. It highlights the transition in advertising spending towards digital platforms, making the internet the second-largest advertising medium after television. Additionally, it discusses the rising popularity of smartphones and the emergence of digital book markets alongside evolving social media usage patterns.

1. Japan digital landscape and insightsDecember2,2010Neo@Ogilvy Japan

2. AgendaJapanMarketSocial MediaMobileNew Device& Technology

3. Japan Market

4. Transition of Internet Users94.08 million users, 78.0% penetration rate(million people )Datasource:Ministry of Internal Affairs and Communication 20104

5. Usage rate by Age/GenderMale 81.3%, Female 74.9% over age 6(%)Datasource:Ministry of Internal Affairs and Communication 20105

6. Internet Usage DeviceSlight increase in Mobile & Game/TV connection (year-on-year)(Unit=million people )PC85.14 M(90.5%)PConly12.92 M(13.7%)-0.3% (vs 2009)Mobile80.10 M(85.1%)+2.5% (vs 2009)PC& Mobile64.92 M(69.0%)0.76 M(0.8%)4.75 M(5.2%)0.02 M(0.0%)Mobileonly8.85 M(9.4%)Game or TV5.67 M(6.2%)0.13 M(0.1%)+1.7% (vs 2009)Datasource:Ministry of Internal Affairs and Communication 20106

7. Corporate Internet UsageAlmost all companies use InternetInternet Use Trend (Business)(%)By Businesses of Different Employee Size(%)Datasource:Ministry of Internal Affairs and Communication 20107

8. By type of Internet lineGradual increase in Broadband, decrease in NarrowbandHouseholdsBusinessesBroadband76.8%Broadband76.9%Datasource:Ministry of Internal Affairs and Communication 20108

9. Penetration of Communication DeviceMobile/PHS/PC are highly popularized(%)Mobile Phone & PHSPCCar Navigation SystemGaming Hardware (Internet-enabled)TV(Internet-enabled)Datasource:Ministry of Internal Affairs and Communication 20109

10. Transition of Ad Spend by MediaInternet has grown 1.9 times bigger than 2005, and has become 2nd largest media following TV(M USD / 1 USD = 100 JPY)INT : 861.8%upINT : 87.2%up1.2% upMG : 27.4%downMG : 37.3%down25.6%downNP : 44.0%downNP : 35.1%down18.6%downTV : 17.1%downTV : 16.0%down10.2%downDatasource:dentsu 201010

11. Transition of Internet Ad SpendingListingand Mobileare the pulling force(M USD / 1 USD = 100 JPY)(M USD / 1 USD = 100 JPY)Datasource:dentsu 2010 (2006-2009) / Mizuho Corporate Bank (2010-2012)11

12. Usage Site RankingProminent change in user usage trend from portal/ISP to social media2001.32002.32003.32004.32005.32006.32007.32008.32009.32010.3(Ranking)Yahoo!74.3Yahoo!74.6Yahoo!78.9Yahoo!81.9Yahoo!83.8Yahoo!86.4Yahoo!87.3Yahoo!88.0Yahoo!82.2Yahoo!83.71Nifty48.2Nifty47.9Rakuten54.8Rakuten57.4Rakuten60.7Rakuten60.2Rakuten56.1Google59.2Google63.9Google66.02MSN42.4MSN44.8Nifty50.9MSN55.1MSN51.4GMO Internet52.9Microsoft54.7Rakuten55.0Rakuten50.7Rakuten53.13NEC39.7Rakuten43.4MSN49.6Nifty50.1GMO49.1Nifty48.7NTTCom.52.9NTTCom.52.5NTTCom.47.8NTTCom.50.14Sony31.6NEC40.3NEC43.7Microsoft43.8Nifty47.5MSN47.4Google50.0Microsoft48.1FC244.2FC246.55Microsoft31.4Microsoft37.7Microsoft41.7NEC43.6NEC42.7NEC43.0GMOInternet48.0GMOInternet46.8Microsoft42.9GMOInternet43.66DTI27.9Sony36.2Sony35.2Sony35.9Microsoft39.2Amazon40.2Nifty46.1FC244.2GMOInternet41.9Wikimedia40.57Rakuten26.9NTTCom. 31.6NTTCom.33.9NTTCom.35.8NTTCom.37.7FC238.6NEC43.5Nifty43.2Nifty37.9Nifty40.48Wikimedia34.9Lycos26.89Lycos26.6KDDI28.9GMO32.4Sony34.7NTT Com.38.5FC241.7Livedoor38.4Microsoft39.7DDI26.210NTT-X26.0AsahiNet25.5KDDI28.7NTT-R34.2Livedoor37.9Livedoor40.0Wikimedia37.8Livedoor34.6CyberAgent39.0Twitter0.7Twitter12.2AppendixDatasource:Nielsen Online (Home Panel)12

13. SocialMedia

14. SpecialSneakers14

15. Types of Social Media15

16. Microblog16

17. Microblog17

18. Types of Micro-blogTwitter usage is dominant, mainly accessed from mobileData Source:Internet White Paper 201018

19. Twitter visitor number trendAs of Sept. 2010, Twitter has acquired over 11 million visitors, exceeding mixi（in1000）Data Source:NeilsenNetview※Excluding access from client exclusive to Twitter19

20. How is Twitter used?ShareLearnTell20

21. What are they tweeting?Mostly private things…Data Source:Internet White Paper 201021

22. Twitter as Business ToolMany business leaders and media delivering information on daily basisBusinessLeaderMedia1,37329,582680,76847,1467,4691,827,3534,46210,8623,30190,04751,3987,437221,3122,4723,8904,144+CompetitorData Source:Twitter(November 29, 2010)

23. What companies are tackling?PRPromotionCommunicationCRM

24. CaseStudyau – IS SeriesTwitter icon projected on the wall of Roppongi Hills like fireworks24

25. Stride – Find the Monkey CampaignCaseStudy25

26. GAP–WANTCAMPAIGNCaseStudy26

27. SNS27

28. SNS in JapanAffiliation19.93 million20.74millionConflictConflict20.59 millionpeopleMembership as of June 201028

29. Strategy of 3 SNS companiesAddressing the mechanism that strengthens real relationship between people on the webStrengthening virtual relationship with Social Game as the principal axis29

30. Hot SNSReal name& Open cultureAnonymityCareer- move styleClosed office environment

31. Twitter and FacebookUsing both is standard in USDatasource:Twitter and Facebook (November 29, 2010)

32. Usage situation of companies in JapanFacebookis not penetrated in JapanDatasource:Twitter and Facebook (November 29, 2010)

33. Levi’s – Levi’s GirlCaseStudy33

34. General Mills – Coping With Disbelief ClinicCaseStudy34

35. Dell – Social Media for Small BusinessCaseStudy35

36. Mobile

37. Shipment volume is slightly on the increase since 2009. However, overall, it seems to have hit the peak.Mobile terminal shipment volume( x 1,000 )Datasource:Yano Research Institute 201037

38. Smartphone holds 5.9% share of total mobile phone, and is expected to reach 30% by 2013Smartphone shipment volume( x 1,000 )Datasource:Yano Research Institute201038

39. iPhone reign supreme in 2009 taking up over 70% of the marketShipment by MakerDatasource:MMResearch Institute201039

40. GALAXY S start exceeds iPhone 4. Reservations alone over 50,000 -Oct27,2010ＮExpansion of Smartphone DevicesClash with Android as 15 new models from 3 companies in winter/springKDDIISO3to be launched 250,000 tentative reservations made already – Nov26１.69 million iPhone shipped in 2009, 72.2% of smartphone-Apr23,2010460,000 Xperiashipped by end of Sept.9-Oct27,201040

41. Both Corporations/Individuals are considering active usage of smartphoneSmartphone used for businessProvided by CompanyetcBusiness Usage SeminarBook41

42. Advanced business usage of mobile in various areasCaseStudyAdvanced companies/corporationsToden Home Service,Keio Electric Railway, Kawatsu-cho PTAMobileInternetGPSCloudApplicationASPCameraSound&VideoMobileInternetGPSCloudApplicationASPCamera実現例 店舗の売上商品、金額のスピーディな把握

43. 現場、本社がタイムリーに連携した顧客情報、サービス

44. ペットの遠隔健康管理

45. 高齢者や子供と家族を繋ぐ情報システムSpecifically,Quickly grasping sales of merchandise and price at each store

46. Delivery of timely customer information and service from headquarters to stores

47. Simple information system connecting seniors and kids with familyResponding CompaniesiPhone4 - Nov 25, 201043

48. Application44

49. App Store is downloaded 3 times more than AndroidMarket worldwide, with 1.5 times more registrationsApp Store vs Android MarketRegistration #150,000(Feb2010)Downloads3 billion（Jul2010)Registration#100,000(Jan2010)Downloads1.2 billion(Aug2010)Datasource: Apple Inc/GoogleInc45

50. Daily-use Applications – essential to businessBusiness-related applications46

51. Sankei Shimbun-iPhone APP ADCase Study

52. SUNTORY-Highball MasterCase Study48

53. Mercedes–SLSAMGShowcase ApplicationCase Study49

54. Chopper2-iPhone + iPadCase Study50

55. iAd51

56. 52iAd is an…Advertising platform within applicationsEnables delivery of interactive advertising or high-quality images when clicking ad in full screenwithin the applicationwithout moving to another siteSupports targeting byLocation InformationAd is created with HTML5avoiding Flash

57. By end of 2010$ 60 millionWorth placement is expectedAdvertisersWalt Disney, NISSAN, Citigroup, Unilever, AT&T, Chanel, General Electric, Liberty Mutual Insurance, State Farm Mutual Automobile Insurance, GEICO, Campbell Soup, Sears Holdings, J. C. Penney, Target, Best Buy, DirecTV, Turner Broadcasting Systemetc…iAd in the US Market53Market size

58. Case Study-US

59. iOS vs Android55

60. Installed OSShareDatasource:Seed Planning “ Smartphone / iPad (Tablet PC) Report56

61. iOSdevices and AndroiddevicesHome ElectronicsCar etc….TVSmart PhoneTablet PCProjection57

62. New Technologies &Devices

63. Digital Books59

64. DeviceMap 2010iPad has established a new positionPersonalLightTaskHeavyTaskPublic60

65. Movement of digital books2010”agora-books” (publisher specializing in digital books) establishedMarThe Electronic Book Publishers Association of Japan establishedApr“Astand” (Digital book delivery site for Asahi Shimbun PC) openedMay“iPad“ launched“Digital Library Publication”(digital publication purchase application for iPhone offered free of charge)JunKinokunia Books announced entry into digital book delivery marketJul“Kindle”announced 2 new product modelsSeven&I holdings announced entry into digital book businessAugNTTdocomo, Dainippon printing formed business partnership in digital book platform construction“SONY Reader“ new series released“Galaxy Tab”(Samsung)announcedSept“GALAPAGOS(Sharp)announced (to be launched in December)

66. Previously driven by comics for mobile phone

67. With the appearance of iPad and exclusive terminal, demands on new platform is expected to growDigital Book Market Size(M USD / 1 USD = 100 JPY)PROJECTIONDatasource:Impress R&D “Digital Book BusinessReport2010”62

68. Digital Book Terminals (new platform)Tablet PCiPadGalaxy TabLifeTouchGALAPAGOSFLEPiaDigital book exclusive terminalSONY ReaderKindle63

69. Social ReadingReading togetherWhere did other readers highlight?

70. What were other readers’ comments?

71. Review

72. Twitter favorite phrase on TwitterOnline BookClub4 other people highlighted this part of the book64

73. Layer ReadingIdea of digital book creating new reading experience and business opportunitiesLayer for sharing thoughts and impression with membersLayer for comments by other writerLayer for discussion with friends about book purchase65

74. iPad used in advanced ways by various industryCaseStudyPRESENTATIONTOOL

75. AR67

76. Mini Cooper – Application + ARCase Study68

77. 69Case Study

78. InsightforConstituencies

79. Contact Media Depending on Information TypeVarious contact media have separate purpose

80. Business:NP, MG, Online / IT : MG, OnlineDatasource:JapanMediaConsumption Study571

81. Contact Media Depending on Purchase Process ActivityTransition of top 10 media

82. IT site, IT magazines, Portal site/News site are influential when accessing informationAccessing info.ConsideringDecision-makingITpro,@ITinformation sitePortal/News siteIT magazinesVendor homepageExhibition/SeminarSeminar hosted by VenderPerson in charge of Vender Person in charge of AgentBusiness MagazineNP (national) Datasource:ES quantitative research201072

83. Usage frequency of each websiteUsage pattern differ depending on site

84. Tendency to access portal site every day（現、日経電子版）Datasource:JapanMediaConsumption Study5)73

85. Current Situation of Smartphone89％ aware of smartphonesamong which12％are already using them51％areconsidering using them※Total of all target (CxO, LOB, IT in LEE/MM)※Research conducted in 2010.3Datasource:JapanMediaConsumption Study574

86. Usage rate of Social Media10%7%30%2%※Total of all target (CxO, LOB, IT in LEE/MM)※Research conducted in 2010.31%Datasource:JapanMediaConsumption Study575

87. Thank you76