Background and concept of mobile advertising
Technology and advertising have evolved a lot in recent years, becoming one of the most influential aspects of doing business in a modern and fast moving world. Nowadays, mobile advertising has become the most efficient way to approach customers to market different types of commodities.
Mobile advertising can be understood as, according to Techopedia, “the communication of products or services to mobile device and smartphone consumers”. From this definition, the mobile advertising spectrum can then range from short message service (SMS) text to interactive advertisements. This makes mobile advertising a component of mobile marketing, and therefore part of a specific digital marketing strategy.
Mobile advertising trends in 2019 onwards
While predicting trends of digital advertising, a report sourced from emarketer, cited by MobileAds last year, said that: “In 2019, worldwide digital ad spending was going to rise by 17.6% to $333.25 billion. That means that, for the first time, digital will account for roughly half of the global ad market.”
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According to Global Digital Ad Spending 2019, digital marketing has already become the dominant ad medium in some countries, including the UK, China, Norway and Canada. In Russia for instance, half of the total advertising budget would go to digital. However, the situation is not yet the case in other regions, namely southeast Asia and Japan which are now catching up.
※ The situation in Japan
Currently, in-app advertising is growing in popularity in Japan, but concerns remain over media quality, according to a new report by digital marketing experts. In fact, Digital InFact surveyed 100 media buyers (brand advertisers and advertising agencies, including trading desks) and findings are showing that Japanese ads buyers embrace in-app ads despite a few quality concerns.
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Here are some of the key findings from the research :
- Excluding walled garden apps such as Facebook and LINE (*), the most popular app verticals among media buyers are News (71.4%), Health/Lifestyle (50%) and Gaming (40.5%);
- While 50% of media buyers say that they buy in-app ads on Facebook, Twitter, LINE and Google APP Campaigns, only 16% use a DSP to buy in-app ads programmatically.
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(*) LINE is an instant messaging, voice and video calling application developed by the LINE Corporation. It allows people to exchange text messages and make toll-free calls with family and friends by transmitting information in the form of data. LINE is the most popular messaging app in Japan.
In addition to the above, another data from Statista shows that the ad production expenses in Japan has been significantly increasing since the past 10 years.
* Source: Published by Statista Research Department, Sep 17, 2020
The production cost of internet advertisements in Japan reached a new high of more than 335 billion Japanese yen in 2019. The value doubled since 2010, indicating an increasing importance of the internet as an advertising medium.
Here is a more detailed figure from Dentsu, the largest advertising company in Japan, showing how internet advertising costs have evolved in the past 5 years.
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The image above shows an update from 2016. It is clear that there has been a significant increase in internet – therefore mobile – advertising expenditures in Japan. The Dentsu 2019 report shows a breakthrough in internet advertising costs, as explained below:
“ Internet advertising expenditures, driven mainly by major platformers and the additional estimation of advertising expenditures for Merchandise-related EC Platforms within Advertising Expenditures in Japan (106.4 billion yen in 2019), resulted in expenditures of 2,104.8 billion yen (up 19.7% and accounting for 30.3% of spending in all media), achieving the sixth consecutive year of double-digit growth…
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This is the first time spending has surpassed the 2,000-billion-yen mark, exceeding Television expenditures. Internet advertising media expenditures were 1,663.0 billion (up 14.8%), including expenditures on digital advertising carried by traditional media companies of 71.5 billion yen (up 22.9%), an increase of 215.0 billion yen compared with the previous year. ”
※ A note on mobile advertising agencies in Japan
The following figure (in Japanese) show Japan’s ranking of mobile advertising agencies in considering their sales (updated in May 2020):
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The above chart does not show it, but Dentsu is certainly the largest agency in the advertising industry reaching over 1 trillion yen in sales on its own.
Referring to the above, another big agency is CyberAgent, which is ranked first (see the above chart) as it has been growing by more than 20 billion yen every year since 2010. It is ranked third in the advertising industry as a whole after Hakuhodo.
The 2nd place is occupied by D.A. Consortium Holdings, a subsidiary of Hakuhodo dealing with the internet advertising system. It is important to mention that Dentsu and Hakuhodo DY Media Partners announced their investment in AbemaTV which was a big topic recently. (*)
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(*) AbemaTV is a Japanese video streaming website owned by the entertainment company AbemaTV, Inc. which provides multimedia services to customers in Japan.
Future perspectives
Mobile advertising is growing to become the most powerful marketing tool as almost 4 billion people are now using mobile devices i.e. smartphones, according to Statista. This trend is causing more business owners in Japan to shift from traditional advertising methods to digital advertising to adapt to a new way of doing business. As changes keep occurring in the digital marketing industry broadly speaking, the industry integration and restructuring movement is not over yet; therefore laying out the possibility that the rankings will change significantly next year.