Online Advertising in Japan – 5 Key Trends and What You Can Learn From Them

Posted By Jim Kersey

There are some things that set Japan apart from other nations, such as its slower adoption of global digital marketing trends. Yet, despite the island nation’s entrenched dynamics between traditional-style advertising agencies, media buying companies, large corporations and a highly homogenous culture, there are some things it hasn’t been able to avoid.

This includes a growing fragmentation of audiences, the emerging popularity of new technologies and channels; and the increased need for personalized content and targeted strategies that reach more defined audience types with evolving expectations.

We explore some of the major global trends that have and will continue to shape Japan’s advertising and marketing world, as well as reflect on some of its own unique characteristics in online advertising.

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1. Increased Spend on Digital Advertising

Increased spend in online advertising in Japan chart

While Japan has one of the most mature advertising sectors in the world, Japanese companies never used to spend that much on digital — until recently. And even today, some companies still don’t understand how it can help them achieve their goals.

However, with the growing recognition of Search and PPC advertising as effective methods of capturing audiences and driving traffic, as well as the unavoidable dominance of social media platforms, ad spending in the Digital Advertising market is now projected to reach US$15,875m in 2020 and $18,740 by 2025, according to Statista.

This trend will likely continue as more brands and agencies become adept at using digital advertising strategies to achieve the same commercial goals they have relied on TV, Radio and PR to achieve for so many years, gradually shifting away from a dependence on these traditional mediums.

In fact, the internet accounted for more than 30 percent of advertising expenditures in Japan in 2019, making it the leading medium for advertisements in Japan, with online ads overtaking television for the first time in history after several years of growth.

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Top 5 Global Online Advertising Spenders

With a projected market volume of US$15,875m, Japan is the fourth biggest advertising spender globally, behind only the US, China, and the United Kingdom

Country Digital Advertising Expenditure (US$)
1. United States 129,436m
2. China 77,761m
3. United Kingdom 21,850m
4. Japan 15,875m
5. Germany 9,785m

Growing Recognition of PPC’s Potential

Social media and search engines like Google, Youtube, Facebook and more all have increasingly sophisticated ad platforms that offer advertisers a variety of Japanese SEM options, with which brands can connect with potential customers.

The acceptance that these platforms are ultimately pay-to-play is also spreading, with more businesses understanding success on social isn’t free and that they must be willing to accept the inherent cost that comes with planning and implementing successful PPC campaigns.

HB Pro Tip: If you’ve relied on gains from Google or Facebook PPC in recent years, now is a good time to rethink your approach and how you can adjust aspects of your digital marketing strategy to cope with new competitors targeting your positions. Relying on outdated tactics will eventually lead to diminishing results.

Learn How to Build a Successful PPC Campaign

2. Even More Focus on Customer Experience

Japanese lady enjoying great customer experience content on online advertising in japan

Serving customers with a high level of respect and care has never been a problem in Japan. Somewhat baked into the nation’s culture, understanding and meeting the needs of customers and patrons is one of its fortes.

So an increasing focus on the customer experience isn’t necessarily a new trend here. Yet, what we’re seeing recently is how global UX trends in digital marketing and product development are aligning with Japan’s inherent aptitude for providing easy-to-use, innovatively designed, and high-quality products and experiences.

For foreign brands, with a natural disadvantage, the pressure is even greater for you to deliver experiences that can rival your Japanese competitors — especially if you’re offering similar products and services.

Success through Collaboration

The best customer journeys are integrated across multiple channels. It’s all about ensuring a high quality and consistent experience across all online advertising touchpoints today, from your Youtube, Instagram and Google Ads, to the way your app or website is designed.

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3. A Greater Appetite for Video Content

Example of video online advertising in Japan

If you’re looking to succeed in online advertising, it’s no secret that video can play a vital role in your sales funnel, whether that’s in initial discovery or consideration. It’s used by pretty much every kind of brand you can think of, including SMV Japan, a disinfectant company who hired Dentsu to create an original anime video promoting the need to “stay alert” as a matter of public health interest.

Dominating other forms of advertising formats in terms of engagement, it’s one of the best ways to grab attention, tell a story, and strike a connection with new audiences.

Why Choose Video Marketing in Japan?

  • Mobile video ad revenue in Japan is expected to grow to $885m in 2021 (up from from $199m in 2015) with a large focus on video marketing
  • Video marketing was the 3rd most popular weekly online smartphone activity in 2018
  • Youtube, a video-first SNS platform, is Japan’s second most popular platform while TikTok is one of the fastest-growing platforms in Japan and its 6th most popular SNS platform

Invest in Successful Video Content

With video it’s best not to “dabble”. It’s a powerful medium, but it takes time to master. And your home market approach to video marketing might not work well in Japan, where different styles and rules apply in the world of Japanese advertising.

  • Focus on creating engaging stories
  • Make sure content is suitable for the platform and audience
  • Include enough product details and facts to satisfy the Japanese appetite for information
  • Don’t consider sound as an “add on”, but an integral part of the experience
  • Consider text overlays that can “guide” the reader through video content
  • Leads users to tangible actions, goals, or CTAs
  • Create content that is fun and creative

HB Pro Tip: Whether you’re advertising on Facebook or TikTok, work with experienced marketers who are not only able to help you produce creative and original content that connects with Japanese users, but who can also prove that your content is making an impact through tangible data and reporting!

4. Better Targeting and Customer Personalization

Example of Japan Airlines online advertising content in Japan

Japan’s homogeneity doesn’t mean that individual tastes, personalities, and preferences don’t exist among the population of 126.5 million people. From a love of ancient practices and culture to an interest in it modern technological trends (and everything in between), there is still a huge amount of diversity in Japanese society and there’s no way that one message, or advert, is going to appeal to all.

As such, personalization and ‘hyper-personalization’ are important factors in Japanese advertising today. Brands big and small, including Japan Airlines who launched their successful Fly Once, Fly Always campaign using dynamic tailored content for different markets and individuals, have invested in ways to leverage new AI technology, data mining processes, and content personalization.

Data-backed Strategies

Personalized advertising not only outperforms generic advertising but also contributes to an overall better customer experience. And of course, the driving force behind personalization is user data. You must understand your audience better in order to inform creative content marketing strategies that will eventually convert.

HB Pro Tip: Setting up the right processes for tracking, experimenting, optimizing, and reporting on your advertising and marketing strategies is the best long-term approach to producing highly personalized and original content with the potential to make a difference to your goals.

Want to Build a Content Marketing Campaign that Converts?

5. Tying It All Together

Example of online advertising in Japan from Nike

Just like Nike, one of the most successful foreign companies operating in Japan, brands now rely on several platforms to drive traffic and produce the level of customer engagement they need.

As users consume content in a variety of mediums from a variety of sources each day, it’s now necessary to build a more expansive and cohesive multi-channel advertising strategy in Japan.

Omni-Channel Retail Strategy

In the Japanese Digital Advertising market, 21.6% of ad spending will be accounted for by the retail industry in 2020. And the most successful retailers are able to ensure their strategies convert on almost any channel, whether that’s in-store or online through social apps or various ecommerce platforms like Rakuten or Amazon.

People don’t shop exclusively through a single medium anymore. According to the Harvard Business Review, 73% of consumers use multiple channels during their shopping journey, meaning consumers of all generations browse online, in-store and on various marketplaces simultaneously.

Almost all successful brands in Japan now know this and run aligned strategies on several social media channels simultaneously, as well as Japan’s most popular online marketplaces. For example, here’s a look at how Nike has extended their brand experience across multiple online platforms.

Example of Nike’s Rakuten online advertising in Japan

Nike’s Official Store on Rakuten

Example of Nike’s Instagram online advertising in Japan

Nike’s Instagram Account for Tokyo, Japan

Example of Nike’s Facebook online advertising in Japan

Nike’s Facebook Profile

Example of Nike’s Youtube online advertising in Japan

Nike’s Youtube Account

Example of Nike’s Twitter online advertising in Japan

Nike’s Twitter Profile

It’s a simple approach, but the clear brand consistency across all its channels, while contributing to greater customer loyalty levels and a seamless shopping experience, is an integral part of what consumers expect from their favourite brands.

HB Pro Tip: With multichannel marketing comes greater complexity. To stay on top of all this, you’ll need to adhere to one of the most important PPC and SEO principles there is: solid organization. Everything from brainstorming, content development and reporting progress will all ultimately come down to how you plan your marketing efforts.

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Staying Up-to-date and Competitive in Japan

Japanese marketing team collaborating across departments for online advertising in Japan

An effective advertising and marketing plan for Japan must take into consideration the way trends are changing within the global context, but also make specific adjustments for the Japanese consumer. This is an ongoing process.

Even with local marketing support who can help you translate and localize your content within the context of unique demographic preferences, you will need to stay vigilant. Below are some final takeaways to keep in mind when building your own strategy for online advertising in Japan.

  • More brands spending on digital advertising means more competition. To capture audiences within an increasingly crowded space, focus on making your campaigns “better”. This means more creativity, better audience targeting, great attention to customer preferences, and ongoing optimizations.
  • The bar is high and constantly rising when it comes to customer experience expectations in Japan. Brands that are serious about delivering a more rounded customer experience must work synergistically across platforms tying together content marketing, SEO, web development and everything else within one strategy.
  • To drive your campaign forward, you’ll need reliable data and proven consumer market personas that can frame your creative processes. To achieve this, start early in your efforts to gather data and track progress across your channels. This will enable you to build highly-personalized campaigns that convert.
  • Video marketing content can help you capture audiences on pretty much all channels, but this content needs to be incredibly engaging, original, and fit-for-purpose. Dedicated campaigns aimed at specific platforms, whether that’s TikTok or Instagram, are the only way to ensure the money you spend on video will come back to you.
  • Relying on Google or Facebook alone to achieve your online marketing targets will only get harder. While success is still possible here, a static approach will undoubtedly lead to diminishing results.

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