The rise of online media and changing information-gathering patterns have made digital advertising increasingly important to advertisers in Japan. The internet recorded strong growth in ad expenditures throughout the 2010s and overtook television as the leading advertising medium within the Japanese market in 2019. This constituted a major shift for the
, as television had been the country's main advertising medium for many decades. Compared to traditional forms of advertising, digital advertising, in many cases, has the advantage of higher flexibility and precision. Many types of digital ads can be used shortly after being created, and changes to their content and placement can be made if necessary, leaving room for optimization. Detailed information on users, which so far has usually been gathered via cookies, helps improve the precision of advertisements.
Makeup of the digital advertising market
The
internet ad expenditure in Japan, which consists of expenditures on media, production costs, and merchandise-related e-commerce platforms, amounted to about 3.3 trillion Japanese in 2023. Among expenditures on media, performance-based advertising is by far the leading transaction method, which shows that many advertisers make use of the aforementioned strengths of digital advertising. The major advertising categories are paid search, display, video, and affiliate advertising. One further distinction can be made between non-social advertising and social advertising. Social advertising mainly refers to ads on social media and video sharing services. One type of marketing that falls into this category and has garnered attention in recent years is
influencer marketing, which utilizes the personal link between influencers and their audiences.
Recent cookie regulation
The practice of gathering information on users has also generated concern over privacy issues. Following a major scandal involving the job-searching portal Rikunabi, whose operator had sold algorithmic scores on job seekers to potential employers, the Act on the Protection of Personal Information (APPI) was revised in 2020 to improve the protection of user data. The amended APPI came into effect in April 2022 and closed some loopholes that had previously been exploited by companies. Among other things, it introduced a new personal data category, called “personally referable information” (PRI). This category refers to data that is less concrete than personal information (PI) but could theoretically be used to identify individuals with the help of further data. The amended APPI requires active consent of users for third-party cookies that can be regarded as PRI according to its stipulations. Survey figures show that the increasing regulation of cookies has led to
concerns about a lowering of targeting and measuring precision among advertisers. Google’s announcement to phase out third-party cookies in its Chrome browser is a further factor that will likely make alternative ways of advertising, such as context targeting or customer data platforms, more important for those wanting to reach potential customers.
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