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 wide availability of smartphones, 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. Online video advertising spending was estimated at more than 295 billion Japanese in 2020 and projected to grow strongly in the coming years.

Mobile is king

Advertising in general is a large business in Japan. Internet advertising has shown stable growth in recent years, which has led to the internet overtaking television as the most important advertising medium in terms of expenditures in 2019. The spread of the novel coronavirus (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, a breakdown of expenditures by device shows that 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 , on the other hand, 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. It is expected that the increasing adoption of the 5G standard, which is supposed to improve the speed, capacity, and latency of mobile internet connections, will exert a positive influence on mobile video consumption. According to a survey, watching videos without interruption and stress is one of the major reasons for changing to 5G among respondents. One source estimates that the number of 5G subscriptions for handset devices will reach more than 75 million by 2026, which in turn is likely to make online video advertising even more attractive for businesses.


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