Asian Ad Market Has Room To Grow

October 18, 2006

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Nielsen//NetRatings tested its new online advertising measurement service, AdRelevance, by cutting it loose in the Japanese online sector. The results show that while ad spending is significant, there’s still plenty of room to grow.

As Wal-Mart is illustrating with its move to buy up the competition in China, the Asian market is a hotly pursued one. Japan is often used as a test-market for products and services, especially technological ones, before launching those products and services in other places.

Over two-thirds of Japan‘s 127 million people have Internet access, but the best way to reach this market is when it is on the go, via their mobile phones. This is why Google and Yahoo and paying close attention to mobile services and ways to serve up advertising there.

Converging mobile users and 86 million Internet users creates a marketplace ready to explode. But as Nielsen’s numbers show, at least the Internet market is underdeveloped.

In September, there were just 3,000 online display advertising campaigns consisting of almost 6.5 thousand banners, run by 1,254 advertisers. The total spend was about $160 million on a total impression count of 29.5 billion.

While that doesn’t sound too shabby in the spend department, with roughly half the Internet population of the United States, Japan’s online ad spend is just one-fifth of America’s. In the US, advertisers spent $771 million. In China, there is even more room, especially room to reach an online population that rivals the US. In September, just $51 million was spent on display advertising.

It may be more urgent than it has ever been for marketers to get a foothold in Asia, while the market is still young.

Nielsen reports that the beauty industry is the biggest spender in Japan, spending about 6.4% of the total online ad spend. The food industry was a close second with 6.3%, followed by the financial securities and investment sector with 5.5%.

Vodafone-Softbank, MediaRights, and DHC made the top of the ad-spend list. In all, the top 50 advertisers accounted for over half of the total impressions. Yahoo! is still king of the Japanese online advertising vendors, serving up 13.3 billion ad impressions, followed by 3.3 billion from Mixi, and 1.1 billion from MSN.

Google’s a little late getting to the Japanese market, but the company is hatching its plans. Part of that strategy is undercutting paid mobile news alert services by offering up Google News for free to the mobile phone.

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