Online Media Issue1 JP EngVer 20100921

8/8/2019 Online Media Issue1 JP EngVer 20100921

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Online Mediain Japan Today

Seizing businessopportunities in a

fast-changing environment

August 2010Issue: 1


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Copyright 2010 The Nielsen Company.

Table of Contents

About this report ..................................................................................................................................................................................... 3

1. Internet user population trend ........................................................................................................................................................ 4

The PC /mobile combination goes mainstream

Growth potential lies in Japans older demographic

Column: The co-existence of panels and census-based measurement in Japan ........................................................................... 7

Haruki Watanabe, Manager, Corporate Communications and Advertising Department, beBIT Inc.

2. Todays social media .......................................................................................................................................................................... 8

Japans social media users are steadily growing

Facebook enjoys explosive growth in the U.S., not so much in Japan In Japan, Twitter is on the rise with high reach versus other markets

Japan loves Q&A sites

Column: Will Twitter see continuing growth in Japan over the next year? ................................................................................. 11

Motohiko Tokuriki, Representative Director and President, Agile Media Network Inc.

3. Internet usage via mobile the current situation ...................................................................................................................... 12

Internet population via mobile reaches 41.6 million

Most mobile Internet users are young

Smartphone penetration in the U.S. market

Smartphones have a 5.8% share of Japans market

Column: Mobile growth in Japan over the next 12 months ............................................................................................................ 14

Hiroto Ebata, Director, E-marketing, Marketing Operations, Coca-Cola (Japan) Company, Ltd.

4. Latest video site trends ................................................................................................................................................................... 15

YouTube visitors are on the rise

Video sites run by TV broadcasters are struggling

Live video download services enjoy rapid user increase

Column: 3 key trends to make interactive marketing more attractive ........................................................................................ 17

Masashi Hagiwara, Executive Researcher, Transcosmos Inc.

5. Latest EC site trends......................................................................................................................................................................... 18

Japanese consumers show higher loyalty to E-commerce category than in other countries

Rakuten, Amazon and Yahoo! Shopping attract more than 20 million visitors

At Kakaku.com, male-female split differs dramatically depending on product category

In the U.S., Groupon sites are scoring fast growth

2010: A Tipping Point for the Online Industry in Japan .................................................................................................................. 20

Charles Buchwalter, Chairman and CEO, Nielsen Online Japan


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In the ever-changing market environment, online content andcommunications platforms play an increasingly signicant role.

Yet, the reality is, Internet use is unique based on the viewpoint

of every user, depending on his/her demographic and

psychographic attributes, lifestyles and online literacy. That

is why the word Internet can mean different things to

different people, because each user accesses the Internet

for different purposes, seeking information and images that

reect who and what he/she is. The lesson for us is: the

Internet as a medium is becoming more and more complex

and thus difcult to fathom.

Devices used to access the Internet have multiplied over recent

years, empowering users to consume online content using

Internet technology on increased occasions, for varieties of

purposes, at wider touch-points.

The question we ask ourselves is: how do enterprise users

understand and deploy the Internet to communicate and

engage consumers in todays marketing environment?

At Nielsen Online Japan, we strive to help our client companies

enhance their online marketing planning and implementation.

and have a better understanding of todays consumer through

the following two perspectives.

The rst perspective is WHO and WHERE, in other words,

What kind of consumers are found where?

Understanding the target customer their preferences, how

and why they access the Internet and in what kind of

environment is probably one of the most important

perspectives required to successfully implement strong

marketing programs. That is why Nielsen Online Japan

categorizes consumers by attributes, devices used andtouch-points, and compares their online usage trends with the

overseas market data, to understand their unique characteristics.

The second perspective is WHAT, as in What is happening

on the Internet now?

Compared to other media, the Internet stands out as a

fast-changing medium due to the exceptional speed of

technological evolution and also being a young medium.

For example, everybody talks about social media today. The

emergence and evolution of social media has empowered

consumers to inuence others on a scale and speed like

never before. Today, consumers have the freedom to share

information at an amazingly fast speed without being

controlled by enterprises and media. To take advantage of this

new information-sharing behavior, having a 360 understanding

of online user behavior and characteristics, then elaborately

planning and executing sophisticated marketing programs

based on their dynamics, are absolutely essential.

Those two perspectives are embraced at Nielsen Online Japan,

reected in our daily data collection, analysis and reports.

This report highlights ve topics identied from our insights

for your review.

Each topic is accompanied with a column contributed by

leading online marketing experts in Japan. We would like

to thank the columnists for their valuable contribution

to this report.

We hope that the data and insights covered in this report

will contribute to your marketing plans.

About this report

About NetRatings Japan

NetRatings Japan Inc. was founded in May 1999 as a joint venturecompany of The Nielsen Company group. Through its diverse productand service offerings including online viewer ratings and ad statistics,access analytics, mobile usage trend survey and social media listeningservice, combined with customized data creation, researches andanalyses, NetRatings Japan plays a key role in clients online businessdecision making process. To learn more about NetRatings Japansservices and details of the company, please accesshttp://www.netratings.co.jp/.

About The Nielsen Company

The Nielsen Company is a global information and media companywith leading market positions in marketing and consumer information,television and other media measurement, online intelligence, mobilemeasurement, trade shows and business publications. The privatelyheld company is active in approximately 100 countries, withheadquarters in New York, USA. For more information, please visit

http://www.nielsen.com/.


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1. Internet user population trend

84% 67%54%

48%41% 40%

40% 40% 37%46% 43%

10%

18%

29%33% 38% 39%

43%

44% 50%

43%46%

5%

16%

17%

19%

21% 21%

17%

16% 13%11%

10%

22,423

31,705

48,528

53,869

59,036 59,236

66,228

69,68971,149 71,985

73,503

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

APRIL

2000

APRIL

2001

APRIL

2002

APRIL

2003

APRIL

2004

APRIL

2005

APRIL

2006

APRIL

2007

APRIL

2008

APRIL

2009

APRIL

2010

(in thousands)

PC only PC & mobile Mobile only

Chart 1-1: Internet user population trend, access via PC and mobile

As of April 2010, Internet user population stands at 73.5million, 46% of which access Internet via PC and mobile. Even

though the Internet user population has been on the rise, the

growth has slowed somewhat. Looking at PC versus mobile as

a preferred means of Internet access, PC stood at only 84%

back in April 2000. As mobile phones have evolved over time

to enable Internet access, consumers using a combination of

PC and mobile have increased in number. As Smartphones are

expected to further penetrate the market, it is very likely that

the population of Internet users via mobile will further increase

(see Chart 1-1).

The PC/mobile combination goes mainstreamAt Nielsen Online Japan, a national phone survey called the

Internet Base Survey is conducted every month to help

identify basic online trends. Data such as Internet usage,

devices used, usage frequency and place of access such as

home and ofce, are collected through the survey, which are

then analyzed to identify online usage based on age, gender

and location, as well as measuring shifts over time.

In this section, we have taken a close look at devices commonly

used by consumers to access the Internet (PC, mobile phone,

or both) and plotted how these options have changed over time.

Source: Nielsen Online Internet Base Survey

Note: Questions on Internet usage via mobile have been modied from April 2009 survey. Starting with April 2009 survey, userstands for users who access Internet via mobile at least once a month; monthly usage frequency was not taken into considerationin the previous surveys.


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63%60%

57% 57%57%

56% 56%56% 56% 55%

54%

37%

40%

43%43%

43%

44%

44%44%

44% 45%46%

8,528

15,363

24,30427,071

30,794

36,910

41,139

44,714

48,27548,568

51,559

0

10,000

20,000

30,000

40,000

50,000

60,000

APRIL

2000

APRIL

2001

APRIL

2002

APRIL

2003

APRIL

2004

APRIL

2005

APRIL

2006

APRIL

2007

APRIL

2008

APRIL

2009

APRIL

2010

Male Female

(in thousands)

Moving on to Internet user population

via PC at home, based on data collected

by NetView, an online rating service

provided by Nielsen Online, the

population stands at 51.6 million as of

April 2010. Looking at the past trends,

the population growth has somewhat

slowed down. If your website, which used

to generate a steady stream of visitors,

suffers from decreased trafc over the

recent years, it is likely that the slow

down of the total Internet population

may have inuenced your website trafc.

Regarding the gender split, it used to

be that the Internet was populated by

men (63%), which created a commonperception that the Internet was for

men. But the female user population

substantially increased from 2000 to

2002, and the growth continued, albeit

slowly, to reach 46% today, or nearly

half of the total Internet population

(see Chart 1-2).

Growth potential lies inthe elderly population

This section breaks down Internet

usage (the proportion of the Internet

population against national population)

into age and gender. Looking at the data,

it is clear that the rate varies depending

based on age group. Men and women 30

to 44 are the most active Internet users.

Interestingly, Internet usage decreases

in direct proportion to age, despite the

large elderly population in Japan caused

by the aging of society. The trend is best

showcased by the 8% participation rate

of women age 60 and older. In spite of

the Internet reaching maturity in this

country, demonstrated by a slow down

of total Internet user population, the

gap in the Internet usage by age and

gender still exists (see Chart 1-3).

Chart 1-2: Internet user population trend, access via PC at home

5,080

4,380

3,870

4,070

4,400

4,930

4,200

3,750

2,740

1,870

14,770

6,640

30%

37%

62%

69%

70%

58%

58%

52%

49%

46%

55%

27%

60+

Population by the age group (in thousands)

MALE FEMALE

55-59

50-54

45-49

40-44

35-39

30-34

25-29

20-24

16-19

13-15

2-12

5,180

4,410

3,860

4,020

4,330

4,820

4,080

3,600

2,590

1,780

6,320

18,370

25%

57%

46%

58%

63%

71%

68%

64%

52%

36%

20%

8%

Chart 1-3: Internet penetration by age and gender, access via PC at home

Source: Nielsen Online NetView; access from PC at home,

Source: Nielsen Online NetView; access from PC at home, April 2010

Population by age group comes from National Census, 2005


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321

589

1,1651,548

2,077

2,721

3,188

3,765

4,605

5,508

5,911

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

APRIL2000

APRIL2001

APRIL2002

APRIL2003

APRIL2004

APRIL2005

APRIL2006

APRIL2007

APRIL2008

APRIL2009

APRIL2010

Age 60+ Approximate curve

(in thousands)

Chart 1-4: Internet user population trend, (age 60+),access via PC at home

Source: Nielsen Online NetView; access from PC at home,

However, the Internet user population trend of the elderly

population (age 60 and older) is on the rise year over year. The

growth rate is signicantly larger compared to the growth rate

of total Internet user population. As the elderly are expected to

be increasingly involved in Internet usage, the elderly Internet

user population is expected to further grow. Moving forward,

attracting and engaging the elderly population will be key to

any Internet business looking for success (see Chart 1-4).

Internet growth in Japan has mainly been driven by the

second Baby Boomer generation (those born between 1970

and 1974), but the user base is widening over recent years.

Today, devices such as the Apple iPad, which can be intuitively

operated, are launched to the market, facilitating the elderly

to access the Internet. It is very likely that the Internet will

become an effective communication tool to reach and interactwith the elderly population. On the other hand, the younger

generation are said to access the Internet via their mobile

phones. Hence, consumers access the Internet via different

devices depending on their attributes, and companies will have

to plan their marketing programs accordingly. For any company,

regardless of industry, communicating with the target users via

relevant channels and devices will be critical.


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Co-existence of panels and census-based measurement in Japan

Haruki Watanabe,

Director of

Public Relations,

beBit Inc.

I have long been dedicated to thinking about how corporate websites (aka owned media) can be

deployed. Online ratings are measured by the same standards for all websites across Japan, which

facilitates comparison of scale and user attributes. Typically, owned media and online media were

compared on scale, to help make a decision whether to advertise or not online. Understandably,

there is no reason to spend advertising money on medium smaller than your own.

I have been told that there are many advertisers who subscribe to online ratings services. There

are probably a very few advertisers subscribing to TV ratings services, but for online marketing, it

seems that many marketers are proactively involved in planning based on objective performance

evaluation, including the use of their own media.

Even though online advertising spending has only recently exceeded newspaper spending, it is

generally said that the online advertising budget remains small compared to the time consumers

today spend online. And time spent online includes signicant amount of time spent on the

companys owned media. If the time spent on owned media is taken away from the total time

spent online, one could say that online still remains an immature medium. But it would be fair to

say that it has a big growth potential going forward.

I have been a long-time advocate of complete census as the goal of online ratings, measured by

a mega panel or access log. Population statistics are measured based on an assumption that all

potential users are found on the websites subject to measurement. But the reality is, the assumption

may work for relatively large sites, but smaller sites would likely not reach the desired target.Estimation may be possible without a panel for bigger sites, but not for smaller sites this is the

perennial problem with statistical data. That is why I believe that panel data should be corrected by

mega panel or complete census using an access log. And I am not alone Nielsen Onlines attempts

in integrating, or creating a hybrid of panel survey and complete census is very close to my own

thought. I am looking very much forward to Nielsen Online achieving the hybrid methodology in

the near future.


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2 Channel, 11,533

COOKPAD, 6,905

Facebook, 1,873

Twitter, 9,882

Wikipedia, 26,934

mixi, 9,344

Ameblo, 22,029

Yahoo! Chiebukuro,26,079

YouTube, 25,023

0

5,000

10,000

15,000

20,000

25,000

30,000

Apr.200

9

May200

9

Jun.200

9

Jul.200

9

Aug.200

9

Sep.200

9

Oct.200

9

Nov.200

9

Dec.200

9

Jan.2010

Feb.2010

Mar.2010

Apr.2010

(in thousands)

Chart 2-4: Key social media visitor trafc trend, Japan

Source: Nielsen Online NetView; access from PC at home and work

Facebook, 122,337

Flickr, 15,218

LinkedIn, 11,597

Myspace, 48,784

Twitter, 19,327

Wikipedia, 59,260

YouTube,94,050

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Apr.2009

May2009

Jun.2009

Jul.2009

Aug.2009

Sep.2009

Oct.2009

Nov.2009

Dec.2009

Jan.2010

Feb.2010

Mar.2010

Apr.2010

(in thousands)

Chart 2-3: Key social media visitor trafc trend, U.S.


In Japan, Twitter is on the rise with high reachversus other markets

Among key social media sites, Twitter is showing rapid

visitor trafc growth in Japan. Visitors to Twitter have been

consistently increasing since 2009. An explosive growth wasobserved in December of the same year thanks to mass media

coverage (TV and magazine), and the visitor population

reached 9.88 million in April 2010 which is 19-times the

520,000 measured in April of 2009 (see Chart 2-4).

Looking at reach (proportion of visitors against total Internet

user population) versus the U.S., U.K. and France, Twitter reach

continues to rise in Japan while the reach in other countries

remains at since October 2009. Obviously, Twitter is particularly

strong in Japan versus other countries (see Chart 2-5).

Japan, 16.3

U.S., 9.8

U.K., 10.4

France, 4.4

0

2

4

6

8

10

12

14

16

18

Apr.2009

Apr.2009

Jun.2009

Jul.2009

Aug.2009

Sep.2009

Oct.2009

Nov.2009

Dec.2009

Jan.2

010

Feb.2

010

Mar.2

010

Apr.2

010

(%)

Chart 2-5: Twitter reach trend, by country



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Japan loves Q&A sites

There is one social media category attracting signicantly more

users in Japan: knowledge-sharing CGM, such as Wikipedia,

Yahoo! Chiebukuro, OKWave, Oshiete! goo. The category hasa high afnity with search engines; more shared information

results in top listing of these sites, which in turn helps attract

more users. Such a positive cycle is enjoyed by the category.

Among the knowledge-sharing CGM, the Q&A site in particular

is simple to use you ask a question which is answered by

others. Yahoo! Chiebukuro, the most popular Q&A site, has

clearly exceeded popular Q&A sites in other countries in terms

of reach (see Chart 2-6). The popularity may be attributed to its

accessibility compared to social networking sites, which allow

more exibility to users. Some companies have started to use

a Q&A site as one of their key customer support channels.

43%

19%17% 17%

11%

JapanYahoo!

Chiebukuro

U.K.Yahoo!

Answers

AustraliaYahoo!

Answers

U.S.Yahoo!

Answers

FranceYahoo!

Answers

Chart 2-6: Reach generated by Q&A site, by country



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Is Twitter in Japan going to enjoy continual growth over thenext 12 months?

Motohiko Tokuriki,

CEO, Agile Media

Network Inc.

Twitter is denitely the most talked about online service in Japan, from the summer of 2009 to 2010.

Research results indicate that Twitter has undergone a massive growth over the past year in Japan.

Twitter has been increasingly used for corporate PR and ad campaigns. Today, not a day goes without

reading the news of latest campaigns embracing Twitter.

Many consumers may be asking themselves yeah, Twitter is really hot now, but I wonder how

long it is going to be around?

Given consumers excessive infatuation with Twitter, there is no doubt that at some point, the

infatuation will come to an end. The real question is, will Twitter be another Second Life, or will

it continue to attract a steady stream of users like the blog boom back in 2005?

Looking at the U.S. market, Facebook has succeeded in adding Twitter functions, which helped

Facebook penetrate wider and growing faster than Twitter. In that regard, a non-Twitter SNS in

Japan may stop the momentum currently enjoyed by Twitter.

However, considering the current situation, Twitter has a great potential to reach wider users

in Japan than in the U.S. due to the fact that Facebook is rather inactive in Japan, but another

important point is the impact of 140-character limit on English and Japanese languages.

In English, the number of characters or alphabets comprising each word is greater than in Japanese.

For instance, the word beautiful takes up 9 letters, but in Japanese, (kirei) takes up only

2 Chinese characters. The advantage for the Japanese language is that a post on Twitter can contain

more information than when the post is written in English. As a result, when posting a RT or quotes

on Twitter, English posts end up as merely quotes while Japanese posts are accompanied with users

own comment. As many as three to four RTs are inserted to a post, causing posts to be chained like

beads. This is precisely the reason that a Twitter post can become a small bulletin board in Japan.

Due to the linguistic differences, Twitter tends to be used as a one-to-one conversational tool in

the English-speaking markets, but in Japan, Twitter can host a chat among a small group, like a

casual conversation at a local bar. Twitter in Japan is not Twitter in a real sense, but localized

as a Tsuitta to suit Japanese preference and sensibilities.

Web service can be used differently by different users depending on country, local culture andlanguage. This point needs to be taken into consideration when monitoring Twitters growth

and popularity in the near future.

In Japan, TV plays a crucial role in further penetrating Twitter. The real-time nature of Twitter

may prevent audiences from time shifting, in other words the recording of TV programming on

HDD recorder and other storage media. If TV stations in Japan are intent on aligning their TV

programming with Twitter, the current Twitter fad may be viewed as a beginning of a genuine

paradigm shift, and not a short-lived trend.


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Internet population via mobile reaches41.6 million

Unfortunately, continual trends cannot be identied by data

collected by our Internet Base Survey, as research specs on

Internet usage via mobile were modied starting with April

2009 survey. Yet the Internet user population via mobile

has reached 41.6 million as of April 2010 (see Chart 3-1).

Most of the mobile Internet users are young

Internet usage via PC showed that consumers in their 30s

through early 40s were main users, while the rates were highamong young men and women for Internet usage via mobile

phone. Internet usage by men ages 16 to 24 was particularly

high; 80% of the age group was found to access the Internet

via their mobile phone (see Chart 3-2).

The young and senior generations show dramatic difference

in usage frequency. Looking at Internet usage frequency via

mobile, the younger age group frequently accesses the Internet

via mobile phone, while the percentage of almost every day

declines as age goes up (see Chart 3-3).

3. Internet usage via mobile current situation

3,493

10,567

22,250

28,073

34,617

35,74039,704

41,93344,544

38,990

41,577

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

APRIL2000

APRIL2001

APRIL2002

APRIL2003

APRIL2004

APRIL2005

APRIL2006

APRIL2007

APRIL2008

APRIL2009

APRIL2010

Internet usage via mobile

(in thousands)

Chart 3-1: Internet user population trend accesss via mobile

Source: Nielsen Online Internet Base Survey

Note: Questions on Internet usage via mobile have been modied from April 2009 survey. Startingwith April 2009 survey, user stands for users who access Internet via mobile at least once a month;monthly usage frequency was not taken into consideration in the previous surveys.

5,080

4,380

3,870

4,070

4,400

4,930

4,200

3,750

2,740

1,870

14,770

6,640

60+

55-59

50-54

45-49

40-44

35-39

30-34

25-29

20-24

16-19

13-15

2-12

5,180

4,410

3,860

4,020

4,330

4,820

4,080

3,600

2,590

1,780

6,320

18,3708%

20%

24%

42%

55%

54%

58%

59%

81%

75%

26%

4%

4%

16%

27%

34%

44%

52%

60%

70%

72%

76%

48%

4%

Population by the age group (in thousands)

MALE FEMALE

Chart 3-2: Internet penetration via mobile, by age and gender

Note : Penetration is based on mobile owner population of each age group

Source: Nielsen Online Internet Base Survey, June 2010


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Smartphone penetrates the U.S. market

Smartphone penetration is a hot topic in the mobile phone

industry. The forecast in the U.S. is that Smartphone

penetration among mobile phone owners will catch up

with the traditional mobile phone penetration in 2011

(see Chart 3-4).

Smartphone has 5.8% market share in Japan

In the Internet Base Survey conducted in June 2010,

Smartphone penetration among mobile phone owners in

Japan stood at 5.8%. The usage rate was relatively high

among men in their 30s through early 40s, and late 20s

through early 30s for women (see Chart 3-5).

50%58%

73% 70% 67%

53%44% 44% 38%

46%36%

20%

30%

29%

21%21% 20%

34%

31% 29%34%

33%

28%

33%

20%13% 6% 9% 13% 14%

25% 28% 28% 21%

36%47%

0%

20%

40%

60%

80%

100%

2-12 13-15 16-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60+

Almost every day 2+ times a week Once a week-once a month

Chart 3-3: Internet usage frequency via mobile, by age group

Source: Nielsen Online Internet Base Survey, April 2010

5.9

%6.6

%

5.2

%

4.2

% 5.2

%

8.0

%

8.3

%

11.4

%

8.6

% 10.2

%

4.7

%

7.1%

4.1

% 5.3

%

2.4

%4.5

%6.3

%

11.5

%

9.6

%

6.4

%

6.4

%

2.5

%

2.4

%

5.0

%

4.3

%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Total

Male

Female

13-15

16-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60+

Male Female

Chart 3-5: Smartphone penetration in Japan

Note : Penetration is based on mobile owner population of each age group

Source: Nielsen Online Internet Base Survey, June 2010

Traditional mobile Smartphone

90% 87% 86%84%83% 81% 79% 76%

73%69% 65%

60%

55%51%

10% 13%14% 16% 17%

19% 21%24% 27%

31%35%

40%45%

49%

0%

20%

40%

60%

80%

100%

Q22008

Q22008

Q22008

Q22009

Q22009

Q22009

Q22009

Q22010

Q22010

Q22010

Q22010

Q22011

Q22011

Q22011

Dashed lines indicate projections

Chart 3-4: Smartphone penetration in the U.S.

(projections for Q4 2009 and beyond)

Source: The Nielsen Company (U.S.)


14/21

14


Mobile growth in Japan over the next 12 months

Hiroto Ebata,

Director,

Marketing Operations,

iMarketing,Coca-Cola (Japan)

Company, Ltd.

It seems that marketers in Japan have yet to fully exploit mobile. At Coca-Cola, our philosophy is

anytime anywhere any place, meaning that we want our products to be there when people are thirsty;

we want to immediately address consumer desire whenever and wherever. The same goes for mobile;

mobile digitally addresses human desire to talk to someone, view information and kill time, just like

soft drinks. With many mobile e-money-enabled vending machines across Japan and the highest share

of domestic market for non-alcoholic beverages, Coca-Cola is intent on further addressing human

desires using mobile. Many companies appear to invest in their corporate PC sites, but their effort has

not yet extended to mobile. Today, mobile coupons and games have penetrated the market. I expect

to see location-based marketing, which can never be done with PC, combining the effort with in-store

activities in the near future.

Moving forward, I believe that marketing that exploits location information will ourish. Because

Smartphones come with a location information function, the location information services will

be driven by further penetration of Smartphones. But Smartphone-only subscribers are few, and

subscription over the next 12 months will be mostly additional to existing mobile phone subscription,

not switching. Switching to Smartphone may take place if Smartphone with Felica function is launched

to counter e-money function of existing mobile phones. Another issue with Smartphones is that some

women say that they have difculty typing in text with a touch pad, which they never struggle to do

with existing mobile phones. Considering the current circumstances, Smartphones have a big potential

to grow as a second phone. The iPad is more intuitive than PCs, with a large screen for better visual

expression, which is likely to be more suitable to the elderly and women than for business purposes.

Starting last year, advertising using mobile applications has grown to an extent that it may be the

leading advertising medium based on media spend by industry, helping to drive mobile membership

sign-up. This fact suggests great afnity between TV and mobile. Currently, 80% to 90% of consumers

carry a mobile phone at all times; when the mobile phone rings while they watch TV, they tend to

answer the phone rather than waiting for the show to end or wait for the commercial break. As mobile

has a bigger share of eyeballs, my educated guess is that TV access can be further driven by mobile.

In the second half of the current scal year, we are witnessing TV shows and commercials produced

on an assumption that the audience has a mobile phone lying around nearby, and the trend is likely

to accelerate.

One of the reasons for Social Medias lower popularity in Japan is that people exchange personalinformation via mobile using SMS mail, so there hasnt been a compelling reason to sign-up for

Facebook. Outside Japan, SMS was not popularly used, and consumers resorted to using Facebook

and similar sites, but similar functions were already offered by mobile in Japan. Furthermore, Japanese

consumers tend not to disclose their real names, which also explains the unique situation. A good

analogy is, the Japanese tend to go to a local bar as a group, whereas Europeans and North Americans

go to a bar alone and enjoy conversation with fellow drinkers. To me, such differences rooted in local

culture may have created slight differences in how mobile and social media are used.


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15


YouTube visitors are on the riseThe three biggest video sharing sites in Japan, based on visitor

trafc trend, are YouTube, GyaO!, and Nico Nico Douga.

YouTube, which made a breakthrough in 2005 in Japan, is still

on a steady upward trend, with 25.02 million visitors recorded

in April 2010, or 34% increase over the same month of previous

year. GyaO! was established in August 2009 by merging of

Yahoo! Douga and GyaO. Thanks to small overlap of visitors

to those two sites, GyaO! succeeded in attracting signicant

visitor trafc, exceeding Nico Nico Douga. Nico Nico Douga

enjoyed a big boost in visitor trafc in 2006, but since then

the trafc has remained at at close to 10 million.

Visitors to Dai1NTV, a video-on-demand service run by a TV

broadcaster attracting many visitors, and the fast-growing

Ustream, still remains small compared to the three biggest

video sharing sites (see Chart 4-1).

When those sites are compared based on loyalty indices,

including number of visits per visitor and time spent per visitor,

the winners were the video-posting and sharing sites YouTube

and Nico Nico Douga. Both sites generated more visits per

visitor and longer time spent by visitor, demonstrating strong

user support to social media where each user is empoweredto create his/her own content (see Chart 4-2).

Video sites run by TV broadcasters are struggling

Video-on-demand sites run by key TV broadcasters struggle to

boost visitor trafc. Some TV broadcasters even offer their own

video content to video-sharing sites such as YouTube, GyaO!

and Nico Nico Douga in addition to running their own sites.

Despite owning a great variety of content, the TV broadcasters

are likely to continue exploring how their assets can be

exploited online (see Chart 4-3).

4. Latest video site trends

You Tube, 25,023

Nico Nico Douga, 8,434

GyaO!, 12,994

Dai2 NTV, 844Ustream, 992

0

5,000

10,000

15,000

20,000

25,000

30,000

Apr.2009

May2009

Jun.2009

Jun.2009

Aug.2009

Sep.2009

Oct.2009

Nov.2009

Dec.2009

Jan.2010

Feb.2010

Mar.2010

Apr.2010

GyaO

Yahoo! Douga

(in thousands)

Chart 4-1: Key video site cisitor trafc trend

Note: Gyo! was founded by integration of Yahoo! Douga and GyaO in September 2009

Source: Nielsen Online NetView; access from PC at home and work, April 2010

0:00:00

0:20:00

0:40:00

1:00:00

1:20:00

1:40:00

2:00:00

2:20:00

0 2 4 6 8 10Timespentpervisitor(hh:mm:ss)

YouTube

GyaO!

Nico Nico Douga

Number of visits per visitors (times)

Dai2 NTV

Ustream

Chart 4-2: Positionings of key video sites

Note: Size of bubble denotes visitor populationSource: Nielsen Online NetView; access from PC at home and work, April 2010


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16


Dai2 NTV, 844

TV Asahi Douga, 164

Fuji TV on Demand, 276

NHK on Demand, 753

TBS on Demand, 560

500

1,000

1,500

2,000

Apr.2009

May2009

Jun.2009

Jun.2009

Aug.2009

Sep.2009

Oct.2009

Nov.2009

Dec.2009

Jan.2010

Feb.2010

Mar.2010

Apr.2010

(in thousands)

Chart 4-3: Key TV station video site visitor trafc trend


Nico Nico Live, 1,383

Ustream, 992

0

200

400

600

800

1,000

1,200

1,400

1,600

Apr.2009

May2009

Jun.2009

Jul.2009

Aug.2009

Sep.2009

Oct.2009

Nov.2009

Dec.2009

Jan.2010

Feb.2010

Mar.2010

Apr.2010

(in thousands)

Chart 4-4: Nico Nico Live and Ustream visitor trafc trend


Chart 4-5: Nico Nico Live and Ustream inow site Top 5

Site (# visitors) Rank Inow: site/sub-domain% inow against

total visitor

Nico Nico Live(1.38 million)

1 Nico Nico Douga 54

2 Nico Nicommunity 18

3 Google search 7

4 Yahoo! Search 5

5 Nico Nico News etc. 3

Ustream

(990,000)

1 Yahoo! News 14

2 Sub domain on Ustream 13

3 Twitter 10

4 Google search 5

5 Facebook 4

Live video download services enjoy rapiduser increase

Video sites that are successful in boosting visitor trafc in 2010

are Nico Nico Live and Ustream, both live video streaming

services. Looking at visitor trafc trend from April 2009, visitortrafc on Nico Nico Live went up from May to October 2009,

then remained at, followed by a big boost in March 2010,

reaching 1.38 million in April of the same year. Ustream was

met with a gradual ups and downs until December 2009,

but a big boost came in January 2010, followed by an even

bigger boost in April of the same year to reach 990,000. As

of April 2010, both sites enjoy increased visitor trafc thanks

to live broadcasting of budget screening process run by the

Government Revitalization Unit (see Chart 4-4).

Looking at Ustreams trafc inow, social media such as

Twitter and Facebook are ranked at the top. This is notobserved with YouTube, Nico Nico Douga and GyaO!, and

is likely to have been caused by strong afnity between

Twitters real-time nature and Ustreams live video

streaming service (see Table 4-5).

As the Internet continues to evolve over time, users are further

empowered to own various online media including blogs andvideo streaming. For personal media content, such as the

personal production program offered on Ustream, social media

will play a signicant role in further commanding attention.

At the same time, linkages with mass media content will also

attract attention and interest, made possible by cooperation

with TV broadcasters.


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17


Three key trends to make interactive marketing more attractive

Masashi Hagiwara,

Executive Researcher,

TransCosmos Inc.

From the latter half of 2010 to 2011, 3 key trends in interactive marketing will emerge, helping

marketers and service providers develop new services and marketing techniques that are more

attractive in the eye of consumers.

1. Penetration of corporate applications

Innovative, radical devices stir the imagination of consumers and companies alike. That is why the

worlds best talents are found in Smartphone and iPad application development. Games and tools

dominate at the moment, but creative and smart corporate and sales promotional applications

will burst into the market. At the iPhone 4 launch, Steve Jobs said that the best device people are

born with is their ngers. An interface that takes advantage of touch screen characteristics has a

possibility of creating a totally new brand experience, clearly different from the ones enjoyed on

the Internet.

2. Use of Social Graphs

When looking for a nice eatery or seeking an answer to a question, functions traditionally offered

by search engines have been shifting to Social Graphs. Undoubtedly, we will see more and more

promotions and advertising incorporating human connection. Facebook heads the Graph platform

outside Japan, but in Japan, mixi and Twitter are likely to assume Facebooks role. Along with SEO,

SGO (Social Graph Optimization) initiatives will be higher up on marketers agenda.

3. Real-time experience

Twitter and Ustream created user value that is different from blogs and YouTube, both heroes of

Web 2.0. Many consumers are increasingly attracted to real-time experiences. For example, time-

driven sales cannot be announced by blogs, but they can be powerfully communicated on Twitter.

Speeches delivered by Masayoshi Son, Chairman and CEO of Softbank, and a Japanese space probe

Hayabusa returning to the Earth move our hearts when viewed or heard live. Many companies will

explore ways to add real-time, live nature of their promotions to evoke human emotions.

Of course, these changes will not render websites, search engines and blogs outdated. Companies

will be blessed with wider channel and methodological options to communicate with consumers.

For Nielsen Online, equipped with online measurement technologies, an emerging challenge is to

develop metrics for application usage, impact of Social Graphs, and real-time media.


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18


Japanese consumers show higher loyalty to theE-commerce category than other countries

When the e-commerce category of major countries was

compared based on loyalty indices, including number of visits

per visitor and time spent per visitor, the e-commerce category

in Japan was found to be larger than in other countries. It

can be said that the e-commerce category in Japan is more

actively used than in other countries (see Chart 5-1).

5. Latest E-commerce site trends

Timespentpervisitor(hh:mm:ss)

Number of visits per visitor (times)

0:00:00

0:30:00

1:00:00

1:30:00

2:00:00

2:30:00

3:00:00

0 5 10 15 20

Australia

U.K.U.S.

Japan

Spain

Germany

Italy France

Chart 5-1: Positionings of key EC sites

Note: Size of bubble denotes visitor population.

Source: Nielsen Online NetView; access by PC at home and work, April 2010

Amazon, 22,292

Rakuten Ichiba, 24,936

Yahoo! Auction,18,491

Yahoo! Shopping,20,108

Kakaku.com, 13,357

0

5,000

10,000

15,000

20,000

25,000

30,000

Apr.2009

May2009

Jun.2009

Jul.2009

Aug.2009

Sep.2009

Oct.2009

Nov.2009

Dec.2009

Jan.2010

Feb.2010

Mar.2010

Apr.2010

(in thousands)

Chart 5-2: Smartphone penetration in Japan

Source: Nielsen Online NetView; access by PC at home and work

57

61

57

59

66

43

39

43

41

34

0% 20% 40% 60% 80% 100%

Male Female

Rakuten Ichiba(24.97 million)

Amazon(22.29 million)

Yahoo! Shopping(20.11 million)

Yahoo! Auction(18.49 million)

Kakaku.com(13.36 million)

Chart 5-3: Key EC site visitor population, by gender


Rakuten, Amazon and Yahoo! Shoppingattract more than 20 million visitors

Moving on to the visitor trafc trend of major E-commerce

sites, the big three players Rakuten, Amazon and Yahoo!

Shopping attracted more than 20 million visitors in April

2010. Yahoo! Auction, which dominates the online auction

category in Japan, generated similar trafc, but a downward

trend was observed from November 2009. Kakaku.com, the

king of price comparison sites, generates visitor trafc around

13 million (see Chart 5-2).

When EC site visitors are broken down into gender, males

dominate on all sites. The trend is particularly notable on

Kakaku.com, with a male-female split of 2 to 1. Looking at the

age groups, Kakaku.com has a higher mix of users in their 30s

and older, while Amazon attracts a higher percentage of the

younger generation high teens to 20s. Interestingly, Rakuten

Ichiba and Yahoo! Shopping showed a highly similar user

composition in terms of both age group and gender

(see Charts 5-3 and 5-4).


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19


6

6

8

4

15

15

14

16

12

32

29

33

30

31

24

24

24

24

28

15

13

15

14

15

8

8

8

8

9

10

0% 20% 40% 60% 80% 100%

Rakuten Ichiba(24.97 million)

Amazon(22.29 million)

Yahoo! Shopping(20.11 million)

Yahoo! Auction(18.49 million)

Kakaku.com(13.36 million)

Below 20 20s 30s 40s 50s 60+

Chart 5-4: Key EC site visitor population, by age group


66

88

65

69

80

69

92

79

76

80

80

82

58

73

70

44

80

39

44

57

34

12

35

31

20

31

8

21

24

20

20

18

42

27

30

56

20

62

56

43

0% 20% 40% 60% 80% 100%

Kakaku.com total (13.357 million)

WOM (bulletin board) (4.87 million)

On-site search results (3.506 million)

Household appliance (3.226 million)

User review (3.033 million)

Automotive, motorcycle (2.976 million)

PC (2.899 million)

Camera (1.331 million)

New product news (998,000)

Sports, outdoor (825,000)

Provider (564,000)

Mobile phone, PHS (544,000)

Fashion, timepieces (450,000)

Interior (449,000)

Hobby (403,000)

Household goods (384,000)

Game (316,000)

Baby/kids (251,000)

Beauty, health (205,000)

Food, drink (196,000)

Male Female

Chart 5-5: Kakaku.com visitor male-female split, by category


BuyWithMe,2,374

Groupon, 5,771

LivingSocial,4,388

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jun.2009

Jul.2009

Aug.2009

Sep.2009

Oct.2009

Nov.2009

Dec.2009

Jan.2010

Feb.2010

Mar.2010

Apr.2010

May2010

Jun.2010

(in thousands)

Chart 5-6: Groupon site visitor trafc trend in the U.S.

Source: Nielsen Online NetView; access by PC at home and work

At Kakaku.com, the male-female split differsdramatically depending on product category

Male-female split of visitors to Kakaku.com greatly varies

depending on category. Visitors to product categories such

as PC, sports/outdoor and game are more than 80%

men, while household goods, baby/kids and beauty/

health categories are visited by more women than men.

More men visit WOM (bulletin board) and user reviews,

(see Chart 5-5).

In the U.S. Groupon sites are scoring fast growth

Groupon sites are scoring fast growth in the e-commerce

category in the U.S. Groupon is coined from the words group

and coupon, offering discount coupons once the required

number of buyers check in for discount. Visitor trafc on

major groupon sites in the U.S. show large growth beginning

in October 2009 (see Chart 5-6). The hot trend in the U.S.

has since landed in Japan, giving rise to many Japanese groupon

sites. The Japanese groupon sites are yet to attract big userpopulation and are not measured by online ratings in Japan,

but the trend is well worth monitoring.


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20


2010: A Tipping Point for the Online Industry in Japan

While my 10 years of online marketing experience in the U.S. gives me an appreciation of several

key industry trends, I am still a newcomer to Japans media and marketing world. But I have

observed several signicant differences between Japan and the rest of the world when it comes

to online media adoption:

Online advances/innovations appear to be somewhat stalled in Japan, which is one of

the most advanced tech-savvy global economies;

Social Media is galloping ahead elsewhere in the world, but Japanese marketers appear

to view it with skepticism and caution;

While Japans mobile market is uniquely advanced in many ways, smartphones

(i.e. iPhone, Android, Blackberry) are struggling to gain share; and

Elsewhere in the world online access has transformed the political process (witness

2008 US presidential election and coverage of Iran unrest). But Japan politicians

continue to impose restrictions on online activity surrounding elections.

Japan does share one important thing with just about every other country: given how consumers

around the world are spending more and more time online, everyone is wondering why it is taking

so much time for companies to allocate more of their marketing budgets to online. In a nutshell:

old habits die hard, and given how important TV advertising has been to all major marketers, it

is not straightforward for marketers to dramatically shift established media spending practices,especially to online.

The ndings in this report paint a picture that onlines successes in Japan have passed a point of no

return, and marketers in all industries understand that their practices must change if they want to

communicate effectively with their customers. The Japanese people have a genuine appreciation

for the power of brands, and it is clear that online exposure contributes positively to brand

awareness, impact and purchase.

In my opinion, 2010 will prove to be a tipping point for the online industry in Japan. The industry

will break through the shackles imposed by the recent recession and will see stronger growth

later this year, with solid double-digit growth in 2011, coupled with a breakthrough in

smartphone penetration and increasing adoption of social media.

Do you agree? Please feel free to share your thoughts by writing me at

[email protected].

Charles Buchwalter,

Chairman and CEO,

Nielsen Online Japan


21/21

Copyright 2010 The Nielsen Company. All rights reserved. Produced in the U.S.A. Nielsen and theNielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other productand service names are trademarks or registered trademarks of their respective companies. 2010/2024

About contributors (in order of appearance)

Haruki Watanabe: Director of Public Relations, beBit Inc.

Joined Honda Motor in 1977 and worked on advertising and sales promotion inside and outside Japan. Watanabe

was named web master in 1996 to supervise Hondas corporate website. Watanabe has assumed the current positionsince April 2010.

Motohiko Tokuriki: CEO, Agile Media Network Inc.

After working on eet sales and IR activities with NTT, Tokuriki moved on to IT consulting rm and Ariel Networks,

later joining Agile Media Network operation in 2006. Tokuriki was appointed Director in July 2007, and promoted

to the current position in February 2009.

Hiroto Ebata: Director, Marketing Operations, iMarketing, Coca-Cola(Japan) Company, Ltd.

Ebata worked with Space and Information Division of Itochu Corporation, moved on to founding a venture capital

Digipri before taking the current position in 2005.

Masashi Hagiwara: Executive Researcher, TransCosmos Inc.After working with Nikkei Research, Hagiwara was appointed Representative Director and President of NetRatings

in 1999 and took the position for 10 years. Hagiwara assumed the current position in August 2009.

Supervision

Shigenori Suzuki, Senior Analyst, Nielsen Online Japan

Planning and text

Shigenori Suzuki, Senior Analyst

Shunsuke Usui, AnalystMasaru Nakagawa, Analyst

Yoshiya Nakamura, Analyst

Tomohiro Nishimura, Analyst,

Ryo Yamada, Analyst, Nielsen Online Japan

Contributor:

Charles Buchwalter, Chairman and CEO, Nielsen Online Japan

Contact:NetRatings Japan, Inc. Sales Division

Tel: +81-3-4363-4201

e-mail: [email protected]

Online Media Issue1 JP EngVer 20100921

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