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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • [Internet Ad] Japanese Users Positive About Internet Ads
  • November 20, 1998 (TOKYO) -- Japan's Internet advertising in 1998 is projected at about 9 billion yen (US$74.8 million), showing that businesses here recognize the Web as a strong tool.
    They are seeking more effective ways of using the Internet.

    Dentsu Inc., Japan's leading advertising agency, on March 19 released its research on Japan's Internet advertising for 1997. In that year, it reached 6.04 billion yen (US$50.2 million), almost quadruple the 1996 figure of about 1.6 billion yen. The company predicts this year's figure will reach 9 billion yen.

    This is the second annual survey Dentsu conducted.

    Senior manager Gohsuke Sato of the Marketing and Media Studies Dept. of Dentsu said a bulk of the spending comes from high-tech companies and automobile companies. He noted an emerging group of advertisers are financial institutions such as banks, tapping into the potential of e-commerce.

    Researcher Tatsuya Ohe of Dentsu's Marketing and Media Studies Dept.'s Interactive Solution Center said the growth is likely to be robust despite the current economic downturn.

    Sony Marketing (Japan) Inc., a one-year-old company that provides marketing and sales support for Sony brands in Japan, became active in Internet advertising in 1998.

    The company said the observed profile of Internet users is still limited, so it is able to reach potential customers considered to be in a niche. For instance, it has seen sales of equipment for business use, such as video conferencing systems, rise as a result of posting Internet ads.

    Regarding users' perceptions toward Internet advertising, some figures have found the users like mail advertisements. Mail ads are defined as text-based ads (with URLs) carried in mail dispatch services.

    Nikkei Multimedia's biannual survey, conducted from May to June 1998 on Internet users, found that more users are tempted to click onto mail advertisements than banner ads. Japan's 10 major Web sites cooperated, and created a link to a questionnaire prepared by Nikkei Multimedia.

    Among respondents (valid responses: 5,571) during the period, 35.6 percent of male and 25.9 percent of female respondents said they are tempted to click on banner ads that carry product names clearly. The numbers for both male and female users go up with mail ads, to 43.5 percent and 29.5 percent, respectively.

    Satisfaction levels are also higher among those who are led to the destination ads from mail than those from banners. Fifty percent-plus said they find sufficient information in the ads they were led to by mail ads, as opposed to 43.6 percent who said they felt the same about the ads that come after clicking on the banner ads.

    According to Internet White Book '98, compiled by the Internet Association of Japan, mail ads' production costs are low, and proofreading requirements are also light because they are in text. These benefit clients, the paper said.

    Besides mail ads, clients have been seeking ways that enable effective exposure of their ads to the right target.

    They have voiced their discontent over the fact that the average click-through rate for banner ads in Japan is observed to be closer to the lower end of the 1-percent range.

    U.S. Internet advertising agencies such as DoubleClick Inc. and CMG Information Services Inc. have started operating in Japan. They build intelligence advertising management systems to collect and analyze visitors' attributes and provide advertisers with the right target for effective reach.

    CMG Information Services and Japan's major trading company Sumitomo Corp. in February of this year formed a strategic alliance to provide such services in Japan, using ADSmart technology developed by a CMG affiliate. They aim to generate revenues of 350 million yen (US$2.9 million) the first year of service.

    Internet advertising prompts prospects into acting to access information, and helps them make their purchase decisions more easily.

    To entice prospects to click, "advertisers are making attempts to come up with effective scheme to use interactivity with prospects," Ohe said.

    As Japanese Internet users reached 11.5 million, Internet advertising will likely grow. It will evolve differently into several forms such as banners, mail, push solutions and data broadcasting. Each needs some time to be examined for effectiveness and impact on users.

    The market of Internet advertising is still in its infancy and awaits more development.

    Though the growth rate is multiple-fold, the pie for Internet advertising accounts for only 0.1 percent of Japan's 1997 advertising spending at 5,990.1 billion yen (US$49.8 billion), according to Dentsu's 1997 report on Japan's advertising.

    Internet Ad stories:
    - Internet Advertising in Its Infancy in Philippines
    - Clients Often Ahead of the Agencies in Australia/A>
    Taiwan's Internet Ad Market to Triple by 2000
    - Taiwan Internet Ad Market Value Estimated at US$3M in 1998

    Related story: Half-size Web Banners Prove Cost Effective, Ad Group Says

    (Makiko Nakagawa, Asia BizTech Tokyo Editorial Bureau)

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    Updated: Thu Nov 19 15:58:49 1998 PDT