Internet advertising plays an increasingly important role for businesses in Japan. Next to paid search advertising and display advertising, video advertising is one of the most important categories when it comes to expenditures on internet advertising media. People today spend a considerable amount of time watching online videos, partly due to the
, which make it possible to access the internet almost anywhere at any time, and partly due to the popularity of video streaming services and social media, which offer a seemingly endless amount of entertainment and novel information.
reached almost 421 billion Japanese in 2021 and is expected to grow strongly in the coming years.
Mobile is king
Advertising in general is a large business in Japan. Online advertising has shown stable growth in recent years, which resulted in the internet overtaking television as the most important advertising medium in terms of expenditures in 2019. The spread of COVID-19 in 2020 further accelerated the reallocation of marketing budgets from traditional media outlets to digital media. When it comes to online video advertising, smartphones account for by far the largest part of the market, which indicates the high importance of mobile internet usage. A
breakdown of expenditures by type shows that in-stream and in-feed advertising are the most important types of online video advertisements.
Influence of 5G
The mobile communications market in Japan is dominated by four major mobile carriers: NTT Docomo, KDDI, SoftBank, and Rakuten Mobile. In 2020, these four carriers started with the rollout of their respective 5G networks. The 5G standard, which improves the speed, capacity, and latency of mobile internet connections, not only makes it possible to watch videos with less interruptions and stress, but also enables the handling of high-volume data, such as 4K/8K videos. It is expected that the improved user experience will exert a positive influence on mobile video consumption. One source estimates that the
number of 5G subscriptions for handset devices will reach more than 106 million by 2027, which in turn is likely to make online video advertising even more attractive for businesses.
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