GroupM’s recent move into the Japanese search sector, where it has launched Outrider, reflects the size and sophistication of that market. Having taken on the bulk of local online marketing agency Sozon’s clients and staff, the US-based firm is promising to be a resource to overseas companies looking to raise their game in Japan. How is Japanese search different to search elsewhere, and what gaps are waiting to be filled?
1 Search in Japan is unusual in that Google is not the market leader. Yahoo Japan (majority-owned by telco Softbank) dominates searches though Google has spent the past few years catching up. According to a recent comScore report, Yahoo has 51 per cent of the market, while Google’s share is now 38 per cent, having been just 18 per cent three years ago. The remainder is divided between MSN and smaller engines.
Meanwhile, Yahoo controls around 40 per cent of the fast-moving mobile market against Google’s 35 per cent; the engines power Japan’s biggest carriers, Softbank and au, respectively.
Masato Sato, Mindshare Japan’s director of invention, says Google tends to be the choice of older, IT-literate male professionals, while Yahoo tends to appeal more to young women interested in areas such as travel, health and beauty.
2 On the surface, the process of buying search in Japan is the same as other markets: an advertiser buys keywords and optimises them through bid management and consonance between keywords, results, copy and the landing page. It is based on cost-per-click (CPC). One difference is the ability to run mobile search campaigns on Google and Yahoo simultaneously.
3 There are other differences from search elsewhere. According to MRM Japan’s executive director of strategy and digital lead Stephen Cox, in Japan consumers tend to buy based on brand affinity rather than product attributes in many categories. That means “the basic objectives of search are somewhat limited in comparison with other markets” - search is a tool to be used after a brand has generated awareness; it is not an awareness-generating tool in itself.
He adds: “Whereas other markets may focus more on broad keyword buys relating to what consumers are actually searching - a long-tail approach - in order to acquire a broad range of consumers through their interests, most search agencies in Japan focus primarily on generating traffic from among consumers already interested in the brand.” The strategies developed by most search agencies therefore revolve around buying a limited number of keywords directly related to product name, brand, or product category and investing heavily in owning the top placements for those often expensive keywords. The result is heavy competition for keywords, driving up costs.
As a result, Cox argues that organic and paid search should be carried out under a single strategy. “To provide marketing that realises the full potential and cost-efficiencies of search, the agency also needs to be heavily involved in the construction of the destination site,” he advises.
4 The Japanese search market is big. Internet World statistics point to a 74 per cent online penetration rate, with 90 per cent of users employing search as their primary information tool. According to Dentsu, while total ad expenditure fell four per cent last year, PC-based search marketing grew 22.9 per cent to US$1.6billion. Mobile search grew 100 per cent to $170 million last year.
5 That means Outrider will face stiff competition. Andy Radovic, director of Interaction at Outrider, cites domestic players Opt, Aum Consulting and Septeni as key rivals. Cox adds that Dentsu, Hakuhodo and ADK have their own facilities in place, along with agencies such as CyberAgent, Transcosmos and FullSpeed. Meanwhile, Isobar recently launched iProspect in the market.
Blair Currie, Aegis Media’s CEO for Japan and Korea, indicates that the current trend is for agencies to offer guaranteed placement within the top five listings. Cox, meanwhile, sees the biggest opportunity for Outrider as being the integration of paid and organic strategies, an area he argues has yet to be fully explored.
What it means for…
Agencies
- The Japanese search market offers huge potential, with online the only media channel set to grow.
- There are opportunities for agencies that forego the more common ‘silo’ approach to paid and organic (search and integrate the two.
- Japanese search plays by slightly different rules. International companies looking to enter the market are likely to value a partner with an understanding of both local and international operating procedure.
Advertisers
- Google and Yahoo are the key players in terms of search engines for PC and mobile; widespread adoption of 3G mobiles with flat- rate internet usage make mobile search an extremely important factor to consider.
- The method of buying search does not vary dramatically in Japan, but the scope of keyword buys tends to be narrower as the focus is on ‘warm leads’.
- English copy rarely translates well directly. The three character sets used in Japanese add significantly to the complexity.
Got a view?
Email [email protected]
1 Search in Japan is unusual in that Google is not the market leader. Yahoo Japan (majority-owned by telco Softbank) dominates searches though Google has spent the past few years catching up. According to a recent comScore report, Yahoo has 51 per cent of the market, while Google’s share is now 38 per cent, having been just 18 per cent three years ago. The remainder is divided between MSN and smaller engines.
Meanwhile, Yahoo controls around 40 per cent of the fast-moving mobile market against Google’s 35 per cent; the engines power Japan’s biggest carriers, Softbank and au, respectively.
Masato Sato, Mindshare Japan’s director of invention, says Google tends to be the choice of older, IT-literate male professionals, while Yahoo tends to appeal more to young women interested in areas such as travel, health and beauty.
2 On the surface, the process of buying search in Japan is the same as other markets: an advertiser buys keywords and optimises them through bid management and consonance between keywords, results, copy and the landing page. It is based on cost-per-click (CPC). One difference is the ability to run mobile search campaigns on Google and Yahoo simultaneously.
3 There are other differences from search elsewhere. According to MRM Japan’s executive director of strategy and digital lead Stephen Cox, in Japan consumers tend to buy based on brand affinity rather than product attributes in many categories. That means “the basic objectives of search are somewhat limited in comparison with other markets” - search is a tool to be used after a brand has generated awareness; it is not an awareness-generating tool in itself.
He adds: “Whereas other markets may focus more on broad keyword buys relating to what consumers are actually searching - a long-tail approach - in order to acquire a broad range of consumers through their interests, most search agencies in Japan focus primarily on generating traffic from among consumers already interested in the brand.” The strategies developed by most search agencies therefore revolve around buying a limited number of keywords directly related to product name, brand, or product category and investing heavily in owning the top placements for those often expensive keywords. The result is heavy competition for keywords, driving up costs.
As a result, Cox argues that organic and paid search should be carried out under a single strategy. “To provide marketing that realises the full potential and cost-efficiencies of search, the agency also needs to be heavily involved in the construction of the destination site,” he advises.
4 The Japanese search market is big. Internet World statistics point to a 74 per cent online penetration rate, with 90 per cent of users employing search as their primary information tool. According to Dentsu, while total ad expenditure fell four per cent last year, PC-based search marketing grew 22.9 per cent to US$1.6billion. Mobile search grew 100 per cent to $170 million last year.
5 That means Outrider will face stiff competition. Andy Radovic, director of Interaction at Outrider, cites domestic players Opt, Aum Consulting and Septeni as key rivals. Cox adds that Dentsu, Hakuhodo and ADK have their own facilities in place, along with agencies such as CyberAgent, Transcosmos and FullSpeed. Meanwhile, Isobar recently launched iProspect in the market.
Blair Currie, Aegis Media’s CEO for Japan and Korea, indicates that the current trend is for agencies to offer guaranteed placement within the top five listings. Cox, meanwhile, sees the biggest opportunity for Outrider as being the integration of paid and organic strategies, an area he argues has yet to be fully explored.
What it means for…
Agencies
- The Japanese search market offers huge potential, with online the only media channel set to grow.
- There are opportunities for agencies that forego the more common ‘silo’ approach to paid and organic (search and integrate the two.
- Japanese search plays by slightly different rules. International companies looking to enter the market are likely to value a partner with an understanding of both local and international operating procedure.
Advertisers
- Google and Yahoo are the key players in terms of search engines for PC and mobile; widespread adoption of 3G mobiles with flat- rate internet usage make mobile search an extremely important factor to consider.
- The method of buying search does not vary dramatically in Japan, but the scope of keyword buys tends to be narrower as the focus is on ‘warm leads’.
- English copy rarely translates well directly. The three character sets used in Japanese add significantly to the complexity.
Got a view?
Email [email protected]
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