Similar to many other countries worldwide, the advertisement market in Japan currently sees a strong division in terms of growth potential between traditional media, such as magazines, newspapers, television, and radio, and the new possibilities that online advertising brings. Today, the internet is the most important advertising medium worldwide. In Japan, the internet is also expected to overtake television as the leading medium. Internet ad spending in Japan more than doubled between 2012 and 2018, reaching a value of almost 1.76 trillion Japanese yen in 2018, while ad spending for television stagnated on a slightly higher level. Online ad spending thus contributed significantly to the robustness of the market as a whole.
The advertisement market in Japan is dominated by the advertising agencies Dentsu and Hakuhodo, whose headquarters are located in Tokyo. Further major competitors include companies such as CyberAgent (Tokyo), Daiko (Osaka), and Asatsu-DK (Tokyo). Dentsu especially holds a dominant position in Japan. Founded by war correspondent Hoshiro Mitsunaga as a news and advertising agency in 1901, it developed strong relationships both with the media as well as ad spenders. Today, its operations are spread over hundreds of subsidiaries. It is common for Dentsu not only to offer solutions for several steps of the marketing process, but also to service competing clients of the same industry. The company also plays an important role in organizing sponsorship for the 2020 Summer Olympics in Tokyo.
The advertising industry plays a vital role for the Japanese economy insofar as product cycles in Japan tend be very short and consumers constantly demand something new. It is noteworthy that the advertising market in Japan is very much dominated by domestic companies, and yet counts as one of the most creative in the world. Japanese advertisements are said to concentrate less on selling the benefits of a new product, and instead focus more on establishing an emotional and memorable connection with the audience. Important assets in this regard include the use of celebrities, aesthetic innovation, stylized language, and catchy music.