Japan’s Online Industry Finally Breaks Out

Japan’s Online Industry Finally Breaks Out

Charles Buchwalter, Chairman and CEO, Nielsen Online Division, Japan

While my 10 years of online marketing experience in the U.S. gives me an appreciation of several key industry trends, I am still a newcomer to Japan’s media and marketing world. But I have observed several significant differences between Japan and the rest of the world when it comes to online media adoption:

  • Online advances/innovations appear to be somewhat stalled in Japan, which is one of the most advanced tech-savvy global economies;
  • Social Media is galloping ahead elsewhere in the world, but Japanese marketers appear to view it with skepticism and caution;
  • While Japan’s mobile market is uniquely advanced in many ways, smartphones such as iPhone, Android and Blackberry are struggling to gain share; and
  • Elsewhere in the world online access has transformed the political process (witness 2008 US presidential election and coverage of Iran unrest). But Japan politicians continue to impose restrictions on online activity surrounding elections.

Japan does share one important thing with just about every other country: given how consumers around the world are spending more and more time online, everyone is wondering why it is taking so much time for companies to allocate more of their marketing budgets to this channel. Old habits die hard, of course, and given how important TV advertising has been to all major marketers for sometime, especially in Japan, dramatically shifting established media spending practices to online – or any other new medium for that matter – is not easy.

It does seem, however, that online’s successes in Japan have passed a point of no return, and marketers in all industries understand that their practices must change if they want to communicate effectively with their customers. The Japanese people have a genuine appreciation for the power of brands, and it is clear that online exposure contributes positively to brand awareness, impact and purchase.

I believe that 2010 will prove to be a tipping point for the online industry in Japan. The industry will break through the shackles imposed by the recent recession and will see stronger growth later this year, with solid double-digit growth in 2011, coupled with a breakthrough in smartphone penetration and increasing adoption of social media.

To read more about the fast-changing online environment in Japan, and read opinions from some of the most respected online researchers in Japan today,  download our report “Online Media in Japan Today.”