Japan digital landscape and
insightsDecember 2, 2010
Neo@Ogilvy Japan
Agenda
• Japan Market
• Social Media
• Mobile
• New Device & Technology
Japan Market
Transition of Internet Users• 94.08 million users, 78.0% penetration
rate
11.55
16.94
27.06
47.08
55.93
69.42
77.3079.48
85.2987.54 88.11
90.9194.08
9.2%13.4%
21.4%
37.1%
46.3%
57.8%
64.3%66.0%
70.8%72.6% 73.0%
75.3% 78.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
The Number of Users Penetration Rate of Population-based(million people )
Data source :Ministry of Internal Affairs and Communication 2010 4
65.6
95.5 97.8
95.5
92.0
82.2
63.4
37.6
27.7
14.5
71.6
97.4 96.6 97.1 95.4
86.1
71.6
58.0
32.9
18.5
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
6-12 13-19 20-29 30-39 40-49 50-59 60-64 65-69 70-79 80-
Male (n=6,858) Female (n=7,070)
Usage rate by Age/Gender• Male 81.3%, Female 74.9% over age 6
(%)
Data source :Ministry of Internal Affairs and Communication 2010 5
Internet Usage Device• Slight increase in Mobile & Game/TV
connection (year-on-year)
PC only12.92 M(13.7%)
PC & Mobile64.92 M(69.0%)
Mobile only8.85 M(9.4%)
Mobile80.10
M(85.1%)
PC85.14
M(90.5%)
Game or TV5.67 M(6.2%)
4.75 M(5.2%)
0.76 M(0.8%)
0.02 M(0.0%)
0.13 M(0.1%)
+2.5% (vs 2009)
-0.3% (vs 2009)
+1.7% (vs 2009)
(Unit = million people )
Data source :Ministry of Internal Affairs and Communication 2010 6
Corporate Internet Usage• Almost all companies use Internet
97.8
99.7 100.0 100.0 100.0
99.2 99.2
100.0 100.0 100.0
96.5
97.0
97.5
98.0
98.5
99.0
99.5
100.0
100-299 300-499 500-999 1000-1999 2000-
2008 (n=2,012) 2009 (n=1,834)(%)
94.5
96.1
97.5 98.1
97.6
98.1 98.7 99.0 99.5
92.0
93.0
94.0
95.0
96.0
97.0
98.0
99.0
100.0
2001 2002 2003 2004 2005 2006 2007 2008 2009
(%)
Data source :Ministry of Internal Affairs and Communication 2010 7
By Businesses of Different Employee Size
Internet Use Trend (Business)
By type of Internet line• Gradual increase in Broadband,
decrease in Narrowband
41.1%
18.5%17.1%
3.4%0.7% 0.4%
11.5%9.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
72.0%
15.7%
2.6%0.2% 0.1%
10.2%
4.4%3.1%
20.6%
0.1%0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Broadband76.8%
Broadband76.9%
Data source :Ministry of Internal Affairs and Communication 2010 8
Households Businesses
• Mobile/PHS/PC are highly popularized
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
1999(n=3,657)
2000(n=4,278)
2001(n=3,845)
2002(n=3,673)
2003(n=3,354)
2004(n=3,695)
2005(n=3,982)
2006(n=4,999)
2007(n=3,640)
2008(n=4,515)
2009(n=4,547)
Penetration of Communication Device
(%)Mobile Phone & PHS
PC
Car Navigation System
Gaming Hardware (Internet-enabled)
TV(Internet-enabled)
Data source :Ministry of Internal Affairs and Communication 2010 9
Transition of Ad Spend by Media• Internet has grown 1.9 times bigger than
2005, and has become 2nd largest media following TV
20,681 19,351 19,480 20,436 20,411 20,161 19,981 19,09217,139
12,02710,707 10,500
10,559 10,377 9,986 9,4628,276
6,739
4,180
4,051 4,0353,970 4,842 4,777 4,585
4,078
3,034
1,998
1,837 1,8071,795 1,778 1,744
1,671
1,549
1,370
735
845 1,1831,814
3,777 4,826 6,003
6,983
7,069
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2001 2002 2003 2004 2005 2006 2007 2008 2009
TV News Paper Magazine Radio Internet(M USD / 1 USD = 100 JPY)
Data source :dentsu 2010
TV : 17.1% down
NP : 44.0% down
MG : 27.4% down
INT : 861.8% up
TV : 16.0% down
NP : 35.1% down
MG : 37.3% down
INT : 87.2% up
10.2% down
18.6% down
25.6% down
1.2% up
10
Transition of Internet Ad Spending
• Listing and Mobile are the pulling force
(M USD / 1 USD = 100 JPY)
Data source :dentsu 2010 (2006-2009) / Mizuho Corporate Bank (2010-2012)
2,310 2,6882,885
2,707 2,7752,836 2,895
930
1,2821,575 1,710
1,881
2,050 2,214
390
536
743 807888
1,0651,246
85
170224
280
325
364
25.6%
29.8%
32.5%
35.5%37.1% 37.8% 38.4%
10.7%
13.5%
17.0%
18.9%20.1%
22.1%24.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2006 2007 2008 2009 2010 Forcast 2011 Forcast 2012 Forcast
PC - Display PC - Listing Mobile - Display Mobile - Listing Listing AD Ratio(vs Internet Media)
Mobile AD Ratio(vs Internet Media)
(M USD / 1 USD = 100 JPY)
11
Usage Site Ranking• Prominent change in user usage trend
from portal/ISP to social media
Yahoo!74.3
Nifty48.2
MSN42.4
NEC39.7
Sony31.6
Microsoft
31.4
DTI27.9
Rakuten
26.9
Lycos26.8
DDI26.2
1
2
3
4
5
6
7
8
9
10
2001.3
Yahoo!74.6
Nifty47.9
MSN44.8
Rakuten
43.4
NEC40.3
Microsoft
37.7
Sony36.2
NTT Com.
31.6
Lycos26.6
NTT-X26.0
2002.3
Yahoo!78.9
Rakuten54.8
Nifty50.9
MSN49.6
NEC43.7
Microsoft
41.7
Sony35.2
NTT Com.
33.9
KDDI28.9
Asahi Net
25.5
2003.3
Yahoo!81.9
Rakuten
57.4
MSN55.1
Nifty50.1
Microsoft
43.8
NEC43.6
Sony35.9
NTT Com.
35.8
GMO32.4
KDDI28.7
2004.3
Yahoo!83.8
Rakuten
60.7
MSN51.4
GMO49.1
Nifty47.5
NEC42.7
Microsoft
39.2
NTT Com.
37.7
Sony34.7
NTT-R34.2
2005.3
Yahoo!86.4
Rakuten
60.2
GMO Internet
52.9
Nifty48.7
MSN47.4
NEC43.0
Amazon
40.2
FC238.6
NTT Com.
38.5
Livedoor
37.9
2006.3
Yahoo!87.3
Rakuten
56.1Microsof
t54.7
NTT Com.
52.9
Google50.0
GMO Internet
48.0
Nifty46.1
NEC43.5
FC241.7
Livedoor
40.0
2007.3
Yahoo!88.0
Google59.2
Rakuten55.0
NTT Com.
52.5
Microsoft48.1
GMO Internet
46.8
FC244.2
Nifty43.2
Livedoor
38.4
Wikimedia37.8
2008.3
Yahoo!82.2
Google63.9
Rakuten50.7
NTT Com.
47.8
FC244.2
Microsoft
42.9
Nifty37.9
Livedoor
34.6
2009.3
Yahoo!83.7
Google66.0
Rakuten
53.1
NTT Com.
50.1
FC246.5
Nifty40.4
Microsoft
39.7
Cyber Agent
39.0
2010.3(Ranking)
Twitter0.7
Twitter12.2Appendix
GMO Internet
41.9
Wikimedia34.9
GMO Internet
43.6
Wikimedia40.5
Data source :Nielsen Online (Home Panel) 12
Social Media
Special Sneakers
14
Types of Social Media
15
Micro blog
16
8.2%
17.5%
89.7%
17.4%
47.7%
95.3%
19.5%
51.2%
92.7%
7.8%
17.6%
98.0%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%
Ameba now
mixi voive
Smartphone Mobile Combine use PC and Mobile PC
Types of Micro-blog
Data Source : Internet White Paper 2010
• Twitter usage is dominant, mainly accessed from mobile
18
0
5,000
10,000
15,000
20,000
25,000
30,000
2010/01 2010/02 2010/03 2010/04 2010/05 2010/06 2010/07 2010/08 2010/09
Twitter mixi Ameba
Twitter visitor number trend• As of Sept. 2010, Twitter has acquired
over 11 million visitors, exceeding mixi
19
( in1000)
Data Source : Neilsen Netview ※Excluding access from client exclusive to Twitter
How is Twitter used?
20
Learn Tell Share
What are they tweeting?
Data Source : Internet White Paper 2010
• Mostly private things…
21
about the same, 13.4%
More private, 34.9%Mostly private,
40.8%
Can't say, 5.0%
Mostly business / school work, 2.2%
More business / school work, 3.7%
Twitter as Business Tool• Many business leaders and media
delivering information on daily basis
Business Leader Media
1,373
10,862
3,890
1,827,353
680,768
221,312
90,04751,398
7,469
7,437
4,462
4,144
3,301
47,146
2,472
29,582
+ CompetitorData Source : Twitter (November 29, 2010)
What companies are tackling?
PR Promotion Communication CRM
Case Study
Twitter icon projected on the wall of Roppongi Hills like fireworks
24
• au – IS Series
SNS
27
19.93 million
SNS in Japan
20.74 million
20.59 millionpeople
Affiliation
Conflict Conflict
28Membership as of June 2010
Strategy of 3 SNS companies
Addressing the mechanism that strengthens real relationship between people on the web
Strengthening virtual relationship with Social
Game as the principal axis
29
Hot SNS
Real name & Open culture
Closed office environment
Anonymity
Career- move style
Twitter and Facebook• Using both is standard in US
6,229 2,341 25,203 1,570,472
204,137 47,827 70,427 345,349
Data source :Twitter and Facebook (November 29, 2010)
Usage situation of companies in Japan
• Facebook is not penetrated in Japan
12,775 4,334 4,481 11,907
n/a n/a 571 3,098
Data source :Twitter and Facebook (November 29, 2010)
• Levi’s – Levi’s Girl
Case Study
33
• General Mills – Coping With Disbelief Clinic
Case Study
34
• Dell – Social Media for Small Business
Case Study
35
Mobile
• Shipment volume is slightly on the increase since 2009. However, overall, it seems to have hit the peak.
Mobile terminal shipment volume
( x 1,000 )
Data source :Yano Research Institute 2010
39,902 36,817 37,360
39,450 41,480
45,165
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2008 2009 2010 (E) 2011(E) 2012 (E) 2013 (E)
37
• Smartphone holds 5.9% share of total mobile phone, and is expected to reach 30% by 2013
Smartphone shipment volume
Data source :Yano Research Institute 2010
1,677 2,175
4,625
7,030
9,940
13,540
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2008 2009 2010 (E) 2011(E) 2012 (E) 2013 (E)
38
( x 1,000 )
72.2%
11.1%
6.8%
4.3%4.3%
1.3%
Apple
HTC
TOSHIBA
RIM
Sony Ericsson
Samsung
• iPhone reign supreme in 2009 taking up over 70% of the market
Shipment by Maker
Data source :MM Research Institute 2010 39
GALAXY S start exceeds iPhone 4. Reservations alone over 50,000 - Oct 27, 2010
N
Expansion of Smartphone Devices
40
460,000 Xperia shipped by end of Sept.9- Oct 27, 2010
KDDI ISO3 to be launched 250,000 tentative reservations made already – Nov 26
Clash with Android as 15 new models from 3 companies in winter/spring
1 .69 million iPhone shipped in 2009, 72.2% of smartphone - Apr 23, 2010
• Both Corporations/Individuals are considering active usage of smartphone
Smartphone used for business
41
Provided by Company
etc
Business Usage
Seminar
Book
• Advanced business usage of mobile in various areas
Case Study
Advanced companies/corporationsToden Home Service, Keio Electric Railway, Kawatsu-cho PTA
Mobile
Internet GPS Cloud
Application
ASP Camera
Sound&
Video
実現例• 店舗の売上商品、金額のスピーディな把握• 現場、本社がタイムリーに連携した顧客情報、サー
ビス• ペットの遠隔健康管理• 高齢者や子供と家族を繋ぐ情報システム
Mobile
Internet GPS Cloud
Application
ASP Camera
Specifically,• Quickly grasping sales of merchandise and price at each
store• Delivery of timely customer information and service from
headquarters to stores • Simple information system connecting seniors and kids with
family
Responding Companies
iPhone4 - Nov 25, 2010 43
Application
44
• App Store is downloaded 3 times more than Android Market worldwide, with 1.5 times more registrations
App Store vs Android Market
Data source : Apple Inc / Google Inc 45
Registration #150,000
(Feb 2010)
Downloads3 billion
( Jul 2010)
Registration #100,000
(Jan 2010)
Downloads1.2 billion
(Aug 2010)
• Daily-use Applications – essential to business
Business-related applications
46
• Sankei Shimbun - iPhone APP AD
Case Study
• Mercedes – SLS AMG Showcase Application
Case Study
49
• Chopper 2 - iPhone + iPad
Case Study
50
iAd
51
52
iAd is an…
Advertising platform within applications
Enables delivery of interactive advertising or high-quality images when clicking ad
in full screen within the applicationwithout moving to another site
Supports targeting by Location InformationAd is created with HTML5 avoiding Flash
By end of 2010
$ 60 million
Worth placement is expected
Advertisers
Walt Disney, NISSAN, Citigroup, Unilever, AT&T, Chanel, General
Electric, Liberty Mutual Insurance, State Farm Mutual Automobile Insurance, GEICO,
Campbell Soup, Sears Holdings, J. C. Penney, Target, Best Buy, DirecTV, Turner Broadcasting
System etc…
iAd in the
US Marke
t53
Market size
iOS vs Android
55
Installed OS Share
56
36.9%
63.8%
47.3%
4.0%
15.8%
32.2%
0% 20% 40% 60% 80% 100%
2015
2009
iOS Android Others
Data source :Seed Planning “ Smartphone / iPad (Tablet PC) Report
iOS devices and Android devices
Smart Phone
Tablet PC
TV
Home ElectronicsCar etc….
Projection
57
New Technologies & Devices
Digital Books
59
Device Map 2010• iPad has established a new position
Light TaskHeavy Task
Personal
Public60
Movement of digital books
Mar
Apr
May
Jun
Jul
Aug
Sept
2010
Seven&I holdings announced entry into digital book business
The Electronic Book Publishers Association of Japan established
“Astand” (Digital book delivery site for Asahi Shimbun PC) opened
“iPad“ launched“Digital Library Publication”(digital publication purchase application for iPhone offered free of charge)
“Kindle”announced 2 new product models
“SONY Reader“ new series released“Galaxy Tab”(Samsung) announced
“GALAPAGOS(Sharp) announced (to be launched in December)
”agora-books” (publisher specializing in digital books) established
Kinokunia Books announced entry into digital book delivery market
NTT docomo, Dainippon printing formed business partnership in digital book platform construction
0
200
400
600
800
1,000
1,200
1,400
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
for New Platform
for Mobile
for PC
• Previously driven by comics for mobile phone
• With the appearance of iPad and exclusive terminal, demands on new platform is expected to grow
Digital Book Market Size
PROJECTION
62Data source :Impress R&D “Digital Book Business Report 2010”
(M USD / 1 USD = 100 JPY)
Digital Book Terminals (new platform)
Tablet PC
Digital book exclusive terminal
GALAPAGOS
Galaxy TabiPad
LifeTouch
FLEPia
Kindle SONY Reader
63
Social Reading
4 other people highlighted this part of the book Online Book
Club
64
Reading together
• Where did other readers
highlight?
• What were other readers’
comments?
• Review
• Twitter favorite phrase on Twitter
Layer Reading
65
Idea of digital book creating new reading experience and
business opportunities
Layer for sharing thoughts and impression with
members
Layer for comments by other writer
Layer for discussion with friends about book purchase
• iPad used in advanced ways by various industry
Case Study
PRESENTATION
TOOL
AR
67
• Mini Cooper – Application + AR
Case Study
68
69
Case Study
Insight forConstituencies
Contact Media Depending on Information Type
• Various contact media have separate purpose– Business : NP, MG, Online / IT : MG, Online
0%10%20%30%40%50%60%70%80%90%
100%General Newspaper
Nippon Keizai Shimbun
Industry Newspaper
Industry Newspaper/Magazines of your industry
General Weekly Magazine
Business Magazine
IT Magazine
PC Magazine
News Program on TVOther TV Program
News Channel on CS/BS
Other Channel on CS/BS
News Website
Business Website
IT Website
Portal Website
Train, OOH
Resource for General Hobby and Amenity Resource for Business Resource for IT and IS n/a
Data source :Japan Media Consumption Study 5 71
Contact Media Depending on Purchase Process Activity
• Transition of top 10 media– IT site, IT magazines, Portal site/News site
are influential when accessing information
Data source : ES quantitative research 2010
21.7%
22.0%
23.6%
31.6%
31.9%
34.5%
41.2%
42.8%
53.7%
56.9%
0.0% 20.0% 40.0% 60.0%
7.0%
11.2%
33.9%
39.6%
25.6%
25.2%
40.9%
24.3%
30.7%
36.7%
0.0% 20.0% 40.0% 60.0%
7.0%
11.2%
33.9%
39.6%
25.6%
25.2%
40.9%
24.3%
30.7%
36.7%
0.0% 20.0% 40.0% 60.0%
72
Accessing info. Considering Decision-making
ITpro, @IT information site
Portal/News site
IT magazines
Vendor homepage
Exhibition/Seminar
Seminar hosted by Vender
Person in charge of Vender
Person in charge of Agent
Business Magazine
NP (national)
Usage frequency of each website
• Usage pattern differ depending on site– Tendency to access portal site every day
Yahoo! JAPAN Google NIKKEI NET Amazon.co.jp YouTube infoseek asahi.com goo MSN Japan YOMIURI ONLINE
Every day 5-6 times by Week 3-4 times by Week 1-2 times by Week 2-3 times by Month Under once monthly
(現、日経電子版)
73Data source :Japan Media Consumption Study 5)
Current Situation of Smartphone
89 % aware of smartphones
among which12 % are already using them
51 % are considering using
themData source :Japan Media Consumption Study 5 74
※Total of all target (CxO, LOB, IT in LEE/MM)
※Research conducted in 2010.3
Usage rate of Social Media
30%
10%
7%
2%1%
Data source :Japan Media Consumption Study 5 75
※Total of all target (CxO, LOB, IT in LEE/MM)
※Research conducted in 2010.3
Thank you
76
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