Japan mobile ad spending up 59.2% in 2007

Dentsu has revealed its annual report on Japan’s advertising spending in 2007. Overall, the industry grew up 1.1% from last year to record 7,019 billion yen (roughly $65 billion).

Internet segment showed healthy growth dynamics at 24.4% up when compared with the previous year. In 2007, Japanese advertisers allocated approximately $5.5 billion on online advertising campaigns, which accounted for around 8.5% of country’s total advertising expenditure. Internet now is more popular with marketers than magazines in Japan. The expansion of Internet segment was spurred with mobile screens attracting increasing amounts of advertising dollars. The mobile ad spending claimed more than 10% or $574 million of online advertising budgets, growing at 59.2% year over year. The mobile advertising spending more than doubled from 2005 when we first reported about it.

Dentsu also provides a breakdown of mobile advertising total number by reporting that more than $78 million or 13.7% of it was allocated on search-based advertising.

While the mobile ad spending is increasing with every year, it just accounts for nearly 1% of total marketing budget, promising a huge growth potential.

Source: Dentsu

Related mobile marketing articles:

• Mobile marketing: showcasing clothing collections on 3D avatars
• AdMob eyes Japan’s mobile advertising market
• Mobile advertising in Japan: $236m spent in 2005

DoCoMo-Google partnership: i-mode on Google steroids

In January, Google Japan and NTT DoCoMo announced their intention to work together to bring Google search, AdWords advertising platform and other Google apps to DoCoMo’s i-mode phone users. While Google already has relationships with KDDI au, the deal with DoCoMo goes beyond a simplistic inclusion of Google search box on the top page of i-mode portal. DoCoMo is about to stop playing a gatekeeper role as its users will search and browse beyond the operator’s own portal. So what are the changes that Google brings to DoCoMo i-mode?

Search results are fetched from three sources
Google search engine indexes three web domains for results: 1) i-mode sites approved by DoCoMo; 2) non-official i-mode sites; and 3) generic Internet websites. Before, users couldn’t perform searches that included non-official and Internet websites from i-mode portal.

Search results are grouped by three types
The way search results are displayed on i-mode portal is also will be changed to reflect the addition of non-official i-mode sites and Internet websites. Based on the source, Google and DoCoMo will group the search results accordingly.

Google keyword-based ads are integrated into search results
A big win for Google is the decision to integrate its AdWords advertising platform into i-mode portal. Now, keyword-relevant text ads marked with a [PR] sign will be placed in up to three locations across the page with search results with a total number of ads not exceeding four. No word about the revenue-sharing model between Google and DoCoMo though.

Display ads to compliment text ads
While details are not clear, there are some reports that Google AdWords platform will also be used to serve display ads such as banners across a bunch of DoCoMo’s services including i-mode portal, Message F (free), G-guide and others. DoCoMo’s D2Communications ad agency will work with Google on implementation of this new mobile marketing structure.

More Google apps to be preinstalled on DoCoMo handsets
Two companies agreed to preinstall a set of Google apps on DoCoMo handsets in near future. The first app to be preinstalled is Google Maps. The Fujitsu F905i and NEC N905i handset already spot Google Maps. All future handset models will be equipped with Google Maps, according to DoCoMo. Having started with the integration of Google Maps, the companies also plan to make Gmail, Picasa, YouTube and Google Calendar optimized for i-mode usage. The idea is to enable all kinds of mashups between these apps and search results like having a link from search results page to Google Maps for example.

Google to become a default page for DoCoMo Full Browser
It was decided that DoCoMo’s all future handsets with a full browser installed will have Google’s top page as a start page by default.

DoCoMo’s Android plans
It seems that DoCoMo wanted to ensure both the i-mode services and Android working seamlessly on its handsets when it joined Google’s led OHA initiative. We can expect i-mode handsets optimized for Google services rather than a complete shift to one platform – Android. Thus, DoCoMo’s handsets based on Symbian MOAP and Linux MOAP platforms will be optimized for Android experience, while some new Linux-based Android handsets will be optimized for i-mode service.

Related articles on Google's mobile strategy in Japan:

• Mobile Google localization primer: emoji and mobile Gmail
• Google Japan intros new single portal for domestic mobile operators
• Google befriends with KDDI, plans global expansion from within Japan?

AdMob eyes Japan’s mobile advertising market

In a rare occurrence a Silicon Valley-based startup is getting ready to enter Japan’s mobile market, well-known for its technological advancements and tough competition. However, founded in 2006 AdMob has already gained confidence in providing marketers and publishers with advertising platform targeted at mobile users. At their website, AdMob folks claim to be serving over 1.5 billion targeted ads each month in over 160 countries.

The reason to go into Japan may be that while showing a great future potential the US mobile ad market is still in the early stage of development with just such mavericks as mobile-focused AdMob or Internet players like Google and Yahoo exploring the unknown world of mobile marketing, while traditional ad agencies prefer to wait and see what happens. However, while mass-market ad agencies are slowly warming up to the idea of mobile advertising, the 10% of online marketing budgets in Japan is already being spent on mobile ads.

The first entry into the non-English speaking market by AdMob is scheduled for February. AdMob have already translated their website into Japanese and reportedly beta tested the local ad platform. The first half of 2008 will be dedicated to tuning their ad platform up to Japanese market standards and building a client-base that will first consist of small and medium-size companies. Having built a core client base and proved its case AdMob plans to expand by attracting bigger accounts.

In Japan, AdMob will face a tough competition not only from big players like Yahoo! Japan but from domestic established mobile players as well. For instance, D2 Communications, a mobile-marketing company partly owned by Japanese wireless company NTT DoCoMo Inc., has been delivering banner advertisements on cellphones since 2000. To get local advertisers on board AdMob needs to come up with appealing value proposition, which might include more generous revenue-sharing model.

Will AdMob have enough time to become successful in Japan or not, in a short to long view, they are likely to become an acquisition target in the US. However, the foray into Japan’s market, if successful, may add attractiveness for global players who look for a quick way to get into international mobile advertising markets.

Related article: Japan mobile ad spending up 59.2% in 2007

Source: CNet Japan

Mobile advertising in Japan: $236m spent in 2005

There is an ongoing global trend of ad money shifting from old to new media – from print, radio and television and into the online arena. Japan is not an exception in this case, but, as always, it is a little bit ahead of the pack as mobile phones start attracting advertisers on a greater scale.

Dentsu, an industry research firm, reports that Japanese advertising market grew 1.8% in 2005 on a yearly basis, totaling 5,962 billion yen (around $50.4bn), with Internet advertising growing at 54.8% in 2005 year-over-year, being one of the fastest growing segment. Overall, the Internet advertising grabbed more than 280 billion yen ($2.4bn) or 4.7% share of total Japanese advertising market. Moreover, 28 billion yen ($236.8m) or 10% out of Internet’s 280 billion yen were spent on a cellphone-targeted advertising. Taking into consideration that there are almost 80 million users with handsets capable of web access in Japan, it is clear why marketers start allocating more of ad budgets for mobile phones.

Dentsu points out that in 2005 mobile marketing attracted big brands from food and automotive industries that conducted mass market campaigns. Thanks to the technological advancements such as high-speed connections, enhanced memory capacity, and multimedia playback capability, the recent handsets gained their recognition as devices capable to display rich commercials. Additional built-in features such as mega pixel cameras with QR-code scanning ability, contactless payment chips, and TV tuners will create even more opportunities for advertisements to reach customers instantly.

US mobile-marketing companies must learn from Japan’s experience

According to this article (subscription required) in Wall Street Journal, “advertising on cellphones is still in its infancy in the U.S.” and it will probably take a couple of years before the cellphone marketing campaigns will bring a real value.

But, right now marketing via cellphones is good to create a buzz instead of producing actual sales. Another trend the article mentions is that additionally to text messaging mobile advertisers begin to “test ads similar to those run on the Internet and TV” thanks to the improved technology. In comparison, the article provides an example of Japan’s maturity in mobile marketing campaigns:

In some Asian and European countries, cellphones have long been an attractive channel for marketers. D2 Communications, a mobile-marketing company partly owned by Japanese wireless company NTT DoCoMo Inc., has been delivering banner advertisements on cellphones since 2000. A banner occupies about a quarter of a phone screen, with commercial information scrolling automatically. D2 says that it runs 100 million to 150 million banners on cellphones a month, with 3% to 5% of viewers clicking on the ads.