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China Projected to Overtake Japan in Online Ad Spending

New projections from eMarketer suggest that online ad spending in China is expected to surpass that over neighboring Japan within the next few years. The research firm cites this years “tsunami and continuing economic difficulties” as reasons why overall ad spending has dropped 3.7 percent this year.

But with regards to online ad spending, I’d posit that the reason Japan can’t keep pace with China is because of its aging population. Older demographics likely mean a preference for traditional media, and as we saw in our recent report concerning Japanese ad-giant Dentsu. Internet only accounted for 13.3 percent of its ad spending last year, barely surpassing newspaper ad spending at 11 percent. Japanese newspaper circulation has been huge in past years, and is likely still doing pretty good.


eMarketer projects that at their current pace, Japan and China will both be spending about $9.5 billion in three year’s time. While I’m not aware of all the factors that went into this projection, China still has much more room to develop online than Japan, so the prediction seems logical at least. New data from iResearch today shows that video ad revenue alone took a huge jump recently, at 1.48 billion yuan (about $231 million) for Q2 2011, up from a billion in Q1. We’ve seen a big trend in recent months of Japanese companies looking to expand to overseas markets. And while most of them will cite the positives of those markets overseas, it would be hard to believe they aren’t also worried about a shrinking market a home.