The State of Programmatic Advertising in Japan

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Programmatic is becoming a hot topic in Japan as both publishers and advertisers realize that it offers huge potential for scale and efficiency that is not available through traditional advertising methods. According to AdRoll’s report published on Digiday, in 2015, 74% of Japanese marketers responded in a survey that they do not know programmatic, however, this year, 71% of the Japanese marketers are to increase their programmatic budgets. This technology is set to “push Japan’s media market to $170 billion by 2020 from its current $154 billion” as per research from PwC.

Nevertheless, Japanese marketers’ understanding of programmatic remains limited. The difference in recognition of programmatic between the US and Japan is huge. Japanese mobile advertising market has been rather isolated, having little external communication. However, marketers see the signs of better communication with Southeast Asian markets and expect that the advertising business will accelerate, resulting in better utilization of advanced programmatic technologies. 

Steps Towards Programmatic 

Although traditional media still proves to be effective for certain types of campaigns in Japan, the way the industry operates is adapting towards programmatic. Dentsu, Hakuhodo, ADK, and some of the other Japanese advertising agencies still generate the bulk of their revenue from TV. But these companies are now starting to respond to the changing market with increasing focus on building understanding around the value of audience data, driving efficiency, and identifying the right user for each message.

  • Retargeting Strategy

71% of Japanese marketers have plans to increase their budget for retargeting in 2017 of which 34% said that the reason for this is “brand recognition”. This is a proof that mobile advertising strategies are developing in a unique way in Japan, since for the majority of marketers around the globe retargeting campaigns are focused on changing the prospective users to purchasers rather than for brand recognition.

  • Mobile programmatic

Mobile is starting to pave its way as well in Japan as 83% of Japanese marketers are now implementing retargeting strategies on mobile. This is a 51% increase from 32% in 2015. With the increasing adoption in mobile, programmatic implementation in other channels such as TV and video is likely to be seen in the near future according to Tech In Asia.  

The New Age

So, what should we expect for programmatic adoption in Japan?

Although the programmatic concept is relatively new in Japan, the speed of its adoption is significant. IDC research predicts that by the end of 2017, real-time bidding (RTB) spend in Japan will reach US$1.1 billion, “marking one of the highest growth rates in the world in terms of RTB spending.” That’s up from spending of just $10 million in 2013.

Moreover, the gap between Japan and US or Europe in respect to programmatic information is closing. We can expect to see Japan’s programmatic growth inline with overseas trends.

Major event like the 2020 Tokyo Olympics is expected to open new horizons to programmatic boom in Japan.

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Topics: Industry News