Search Advertising - Japan

Japan

Highlights

Ad spending in the Search Advertising market in Japan is forecasted to reach ¥US$11.45bn in 2024.
The market is expected to experience an annual growth rate (CAGR 2024-2030) of 6.42%, leading to a projected market volume of ¥US$16.62bn by 2030.
When compared globally, the United States will dominate in ad spending, reaching ¥US$137.00bn in 2024.
Within the Search Advertising market, 38% of total ad spending is anticipated to come from mobile in 2030.
The average ad spending per internet user in the Search Advertising market in Japan is projected to be ¥US$109.40 in 2024.
Japan's Search Advertising market is seeing a rise in demand for localized ad campaigns to target specific regions within the country.

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Search Advertising market in Japan has been experiencing significant growth in recent years.

Customer preferences: Japanese consumers have increasingly turned to the internet to search for products and services, making search advertising a highly effective way for businesses to reach their target audience. With the rise of smartphones and the increasing availability of high-speed internet, consumers in Japan are spending more time online, which has led to a higher demand for search advertising. Additionally, Japanese consumers are known for their high expectations when it comes to product quality and customer service, and search advertising allows businesses to effectively communicate their value proposition and build trust with potential customers.

Trends in the market: One of the key trends in the Search Advertising market in Japan is the shift towards mobile advertising. As more and more Japanese consumers rely on their smartphones for internet access, businesses are increasingly investing in mobile search advertising to reach this growing audience. Mobile search advertising offers unique opportunities for businesses to target consumers on the go, and with the popularity of mobile apps and location-based services, businesses can now deliver highly targeted and relevant ads to consumers based on their location and preferences. Another trend in the market is the increasing adoption of programmatic advertising. Programmatic advertising allows businesses to automate the buying and selling of ad inventory, which can help optimize ad spend and improve targeting capabilities. In Japan, programmatic advertising is gaining traction as businesses look for more efficient ways to reach their target audience and maximize their return on investment.

Local special circumstances: One of the unique aspects of the Search Advertising market in Japan is the dominance of local search engines. While Google is the most popular search engine worldwide, in Japan, local search engines such as Yahoo! Japan and Rakuten are the preferred choices for many Japanese consumers. These local search engines have a deep understanding of the Japanese market and culture, which allows them to provide highly relevant search results and targeted advertising opportunities for businesses.

Underlying macroeconomic factors: The growth of the Search Advertising market in Japan can be attributed to several underlying macroeconomic factors. Japan has a highly developed and technologically advanced economy, which has led to a high internet penetration rate and a large online consumer base. Additionally, Japan has a strong culture of innovation and entrepreneurship, which has fostered the growth of digital advertising and search advertising in particular. Furthermore, the government has implemented policies to promote the digital economy and encourage businesses to invest in digital advertising, which has further fueled the growth of the Search Advertising market in Japan.

Data coverage:

Data encompasses enterprises (B2B). Figures are based on search advertising spending and exclude agency commissions, rebates, production costs, and taxes. The market covers search advertising that is displayed on search result pages or next to organic search results.

Modeling approach:

A combined top-down and bottom-up approach determines the market size. Starting with the top-down approach, we calculate global search advertising by aggregating advertising revenues from key players (Alphabet (Google), Microsoft (Bing), Baidu, Amazon, Alibaba, etc.). Followed by the bottom-up approach, we justify global, country, and region results using web traffic and the number of app downloads. Lastly, we distribute the results to each country individually with relevant indicators such as GDP, internet users, and digital consumer spending by country.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market. For instance, the S-curve function is well suited to forecast digital products due to the non-linear growth of technology adoption, whereas exponential trend smoothing (ETS) is more suited for projecting steady growth in traditional advertising markets.

Additional notes:

Data is modeled using current exchange rates. The impacts of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice per year in case market dynamics change.