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November 30, 2000

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AsiaweekTimeAsia NowAsiaweek technology

FEBRUARY 25, 2000 VOL. 26 NO. 7

Business Buzz
Japan: Land of the Rising Internet Ad Spend
By MARIA CHENG

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Asiaweek Technology Home

If Japanese are looking to the Internet to save their economy - and it might be their best hope according to some analysts - they've just been given some good news. Advertising on the Web more than doubled in Japan last year, even though growth in all other areas was spotty at best. Spending in 1999 on the production and placement of Internet advertising in Japan jumped 111% from the year before to $220 million, according to Dentsu. They should know - they're the country's top advertising agency. Not bad, considering that in 1996 only about $15 million went into Web ads. And it's even more impressive when you consider that, overall, the money spent on Japanese advertising in 1999 slumped 1.2%, after a 3.8% drop in 1998. The total figure started rising in the three months leading into December, generally echoing the buzz in the telecommunications and information industries. Dentsu said that the amount spent in the four major media - newspapers, magazines, radio and television - declined for the second straight year in 1999 but could increase 3% this year. Along with the continued growth of Internet advertising, expenditures on "new media" ads went up 4.2% in 1999 to $206 million, lifted by the proliferation of cable television and satellite broadcasting outlets. Dentsu forecasts Internet advertising spending to top $917 million in 2004 and double that by 2007 - which would pretty well match the amount currently going into radio advertising. Dentsu estimates there are about 20 million Internet users in Japan, although ACNielsen Japan and NetRatings Japan put the number of active surfers closer to 15 million. About 13% of the country's households have Internet access, on par with Taiwan (14%) and Hong Kong (16%). All those countries, though, lag far behind Australia, New Zealand, and Singapore (each with nearly 30% penetration). Still, in sheer numbers, Japan is second only to the U.S. in terms of people online. Dentsu says to expect about 27 million Japanese to be regularly accessing the Web by 2002.

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