US online ad revenue down 5.4% in third quarter

The ongoing financial slump has claimed a once thought impervious victim: Online Advertising. Latest data shows online ad revenue is the US is down 5.4% in the third quarter with spending totaling $5.5 billion, down from $5.84 billion a year ago and a substantial decline from the peak of $6.1 billion in the fourth quarter of 2008. I don’t have the latest numbers, but in 2008, Japan saw a 12% increase in Web ad revenue and a 60% jump in mobile ad pending, all the while traditional media channels saw their spending drop 35%. Mobile advertising continues to dominate the Japanese media landscape in terms of growth, but total spending still represents less than 2% of all ad spend in Japan. I suspect mobile ads spend will hit the 10% mark within the next 5 years.

Happenings…

Almost three months since my last post. A lot has and hasn’t happened in the Japanese market. I’ll return next week with a post on what Docomo is up to and how they plan to leverage their technology to reach traditional TV shopping customers. That and more to follow.

Good news for digital sales

Tokyo-based Fuji Chimera Research Institute in a recent report predicts that sales of online digital content such as video and music products, will continue on an upward trend reaching 630.5 billion YEN by 2012. This represents a 29% increase from last year. One interesting item in the report stated that e-learning products used by companies for in-house training will will also see a marked increase in sales over the next few years. I found this to be interesting in light of the fact that many Japanese corporations are cutting-back in hiring and downsizing. Digital e-learning products might be the answer to the hurt many domestic staffing businesses are experiencing. Temp agencies, head-hunters and other businesses currently affected by the economic downturn might want to consider expanding their service line to include e-training products and services to help businesses make the most of their staffing.

Advertising spending drops for first time in 5 years – The Mainichi Daily News

The Mainichi Daily News reports that Ad spending in Japan has dropped for the first time in 5 years.

“Advertising spending was down 4.7 percent in 2008 from the year earlier, the first drop in five years, according to estimates released by advertising giant Dentsu.

Print media showed the biggest decrease since the figures first came out in 1947, with TV, radio, newspapers and magazines taking less than half the market share with 49.3 percent for the first time. Other media, including newspaper pullouts and billboards, also showed a decrease.”

As I’ve reported in a past blog entry, we’re seeing a drastic drop in ad spending in traditional ad channels, due mostly to the economic downturn. But what about online ad spending?

“However, Internet advertising proved still healthy, taking more than a 10 percent share for the first time (10.4 percent).”

Newspapers showed the biggest drop, decreasing 12.5 percent to 827.6 billion yen. Magazine advertising spending was down 11.1 percent to 407.8 billion yen, radio down 7.3 percent to 154.9 billion yen and TV dropping 4.4 percent to 1.9 trillion yen. The ad spending cutbacks will prove to be a bonanza for many online media channels. I suspect mobile portals stand to benefit the most due partly to the pervasiveness of mobile devices in Japan and the increasing popularity of mobile based SNS.