Internet Advertising in Japan: The Dentsu Take on Things
April 18, 2007
By Ken Worsley
A few weeks ago, Adam Richards at the Mutant Frog Travelogue wrote up an excellent piece on the state of Internet advertising in Japan. As he pointed out, although a surge in internet advertising in 2006 had been reported by advertising giant Dentsu, the outlook for 2007 was not nearly so rosy, as a decline in Internet ad revenue had taken hold. What happened? According to Adam’s translation of an article from Shukan Toyo Keizai:
The cause of this slowdown in Net ads, as everyone in the industry points out, is the drop in ad placements from major consumer credit firms. These companies were a major advertiser in all Internet media from banner ads to search-sensitive ads. But they took a turn for the worse business-wise when scandals led to a rise in maximum interest rates. The companies’ major scaling back of ad budgets has taken its toll.
With that as a backdrop, let’s look at a report concerning Internet advertising released by Dentsu Communication Institute on Monday that claims, “Assumed growth into a 750 billion yen plus market by 2011.”
If this were to happen, it would be a more than doubling of the 2006 figure of 363 billion yen.
The report is worth your time reading, and perhaps very worth your time if you’re busy coming up with some business plan that might incorporate this information. One of the key factors that Dentsu believes will drive the rise in Internet ad spending is the increasing use of social networking sites, which tend to generate more page views and longer usage sessions than other websites.
At the same time, one should take note of rumors flying around Tokyo that Dentsu is desperately trying to find Internet advertising solutions for its clients, who are apparently eager to spend but not sure how. Will this result in them snapping up a bunch of smaller Internet marketing firms? Keep your eyes open…
Filed Under Advertising, Internet
Social Bookmarks:
Related Posts:
News Corp moving into Japan’s online advertising market
More on You Tube-Google-Advertising Marketing-Copyright-Dentsu-Japan
Dentsu’s President on Advertising, Internet Ads, and Google
Japan corporate service price index up 7.1% in July; Dentsu feeling the pinch
Google, Double Click and how to get attention in Japan’s business press
Comments
6 Responses to “Internet Advertising in Japan: The Dentsu Take on Things”
Got something to say?
Last Month's Top 5 Stories
1. Fukuda steps down2. Number of foreign workers at Japanese firms leaps
3. Subprime buyins: Nomura at Lehman’s, Mitsubishi at Morgan Stanley
4. Bank of Japan: savings deposits exceed loan balances by a record 145 trillion yen
5. Sapporo Breweries to be Japan’s first firm to label products with their carbon footprint
Upcoming Economic Reports
October 1BOJ Tankan Survey
September Auto Sales
October 7
September Foreign Reserves
October 8
September Economy Watchers Survey
September Bankruptcies
October 9
August Machinery Orders
October 10
September Bank Loans
Jobs in Japan
From the Blogosphere
Japanese Wages Fall Again In June at Japan Economy Watch
Members of a Nation State at Neojaponisme
More Comments on Wai-Wai at Let's Japan
Will the real Ozawa please stand up? at Observing Japan
Posts on Recent Economic Reports
September 25Japan’s convenience stores loving the Taspo card; sales up 7.5% in August
September 24
Japan supermarket sales down 1.0% in August
September 22
Japan’s consumer confidence hits all-time low for third straight month in August
September 21
Central Tokyo office vacancies up for seventh straight month in August
September 19
Japan department store sales down 3.1% in August
View more economic reports »
Our Links
- Asia Business Intelligence
- Bank of Japan Statictics
- Cabinet Office English Homepage
- Center for Strategic and International Studies: Audio, Video & Transcripts
- China Business Daily
- Claus Vistesen’s Blog
- Columbia University Center on Japanese Economy and Business
- Council on Economic and Fiscal Policy
- Economic and Social Research Institute
- From the inside, looking in
- Global Talk 21
- Japan Business Federation - Nippon Keidanren
- Japan Considered
- Japan Economy Watch
- Japan Forum on International Relations
- Japan Inc
- Japan Labour Force Survey
- Japan Law Blog
- Japan Marketing News
- Japan News Review
- Japan Productivity Center
- JETRO - Japan External Trade Organization
- Ministry of Economy, Trade and Industry - Online Statistics
- Ministry of Finance
- Ministry of Finance - Policy Research Institute
- Ministry of Foreign Affairs - Economic Affairs Page
- Nikkei Real Estate Market Report
- NYU - Center for Japan-US Business and Economic Studies
- Observing Japan
- OECD - Japan Page
- Prime Minister and his Cabinet
- Seeking Alpha
- Small and Medium Enterprise Agency
- Steven Towns’ Blog
- Tokyo Stock Exchange
- Trans-Pacific Radio
- What Japan Thinks
- World Federation of Exchanges
Archives
Build the Network!
Ken- I think this analysis is very astute.
The other thing that everyone (especially Internet advertising folks and stock analysts outside of Japan) is watching is the purchase of DoubleClick by Google and what that might mean for Internet advertising in Japan.
Great article, thanks!
I wonder why Dentsu hasn’t banged on our door yet?
(j/k)
Nothing in the report about consumer finance firms, if their demise will affect the market and how, or what will take their place. I do agree, though, that rich media advertising will get better and will be more valuable just by nature.
Gen: Google/DoubleClick has definitely drawn interest in Japan…
“But they took a turn for the worse business-wise when scandals led to a rise in maximum interest rates. ”
I thought they put a cap on maximum interest rates ……
and gave them a slap on the wrist concerning the content of their advertising
[…] According to Tuesday’s Nikkei, News Corp has plans to enter Japan’s lucrative online advertising market. Back in April 2007, we reported that Dentsu claimed Japan’s online advertising market would experience “growth into a 750 billion yen plus market by 2011.” […]