According to Seedplanning’s 2008 online advertising report, Japan’s Online Advertising Market had a small growth in 2008 from 2007. (See below.) The report shows that about 60% of 458 companies who participated in the survey answered that they used online advertising services in 2008.

Q: Did you use Online Advertising services?

2008: Yes – 64.3%, No – 35.7%

2007: Yes – 63.0%, No – 37.0%

The report also shows that 11% of online advertisers in 2007 did not advertise online in 2008, while 12.3% started to use online advertising services in 2008.

The report did not show the detail of the businesses (size, type of business, type of advertising services used, etc.), but it sounded that they were big advertisers, who probably allocated more online advertising budget for display ads.

Let’s take a look at top 10 popular sites (by number of accesses) to advertise in 2008 in Japan.

1. mixi – mixi news ad box
2. mixi – branding banner
3. mixi – area branding banner
4. DreamNews – top banner
5. MoCovideo – top banner
6. soraejp – entry promotion banner
7. mixi – Ashiato (footprints)
8. Christian today – top banner
9. mixi – rotation text
10. Starcosme – text

It looks like mixi was the winner in 2008, and most of the ads made the list were banner ads. You hear that Yahoo Japan is one of the most popular sites in Japan all the time, but they didn’t make the list. So, why are banner ads doing well in Japan?

As mentioned, these businesses participated in the survey were large sized companies who could afford the banner ads expenses, and because of the size of the company, they probably felt that they should use the display ads regardless to the ads performance. It’s considered more as a branding tool just like TV ads. However, display ads actually performs well in Japan according to one study.

Q: Which ads do you most likely to click, display ads or text ads? (internet.japan.com / goo research, 100%=1082)

Graphic/Flash ads – 45.8% (495)

Text ads – 30% (327)

This doesn’t mean that text ads are not welcomed and don’t perform well in Japan. Well targeted keywords with creative ad copies perform really well for our clients at much lower cost compared to most of the banner ads. You do need to spend more time to create and maintaine the PPC campaigns, though. It is a fact that there aren’t much information/data about the overall online advertising market in Japan, which is badly needed. The good news for us is that 5 companies (Microsoft, Yahoo Japan, NTT Resonant, All About Japan and Video Research Interactive) have formed a group to conduct “Internet Advertising Value Index Project” in late 2008. They plan to publish a series of market reports in 2009.