Understanding Digital Marketing In Japan: The Complete Guide

If you're a digital marketer looking to expand your brand in Japan, it's important to understand the country's unique digital marketing landscape. In this article, we'll take a closer look at the most important things you should know to have a deeper understanding of Japan's digital marketing ecosystem.

By the end of this article, you'll have learned more about have a better Japan's most important social media platforms, advertising channels, ecommerce malls, search engines, affiliate networks, and more.  So if you're looking to do serious business in Japan, make sure you give this article a full read!

Here is an outline of the key topics we'll cover:

• Social media channels: In Japan, the most popular social media platforms are LINE, Twitter, and Instagram. Platforms like LinkedIn, Pinterest, and Snap are not common and we'll take a closer look at things you'll want to know when it comes to social media in Japan.
• Search engines marketing: Google is the most popular search engine in Japan, however Yahoo! Japan is still quite popular and this is an essential platform to know about for anyone considering SEM in Japan.
• Digital Advertising Channels: Given that Japan's social media and search engine landscape is unique, the advertising channels digital marketers spend their money is also a bit unique. We'll take a closer look at social, search, display advertising and more.
• Ecommerce Malls: In Japan, a large portion of ecommerce purchases happen  on platforms called "ecommerce malls." These are giant online marketplaces\, where many brands and retailers sell their products. The most popular ecommerce malls in Japan are Rakuten, Amazon, and Yaho! Shopping.
• Affiliate networks: This is a huge channel in Japan and can help bring high intent users to your website. Navigating the affiliate industry can be tricky and we'll go over things to expect with the largest networks in Japan and an overview of how pricing typically works.
• Finding digital marketing talent: Know your options and the pros and cons of hiring a full-time team vs. freelancers vs. a digital marketing agency.  

As you can see, just from the above outline, there are some key differences in the way that digital marketing works in Japan compared to other countries. But don't let that discourage you! By the end of this article you'll know a lot more about Japan so  let's get started diving into the above topics.

Social Media Channels

In Japan, the top social media platforms are LINE, Twitter, and Instagram. Twitter and Instagram are already platforms familiar to most people, so let's spend a little bit of time discussing LINE and its place in Japan.

LINE is essentially a messaging platform similar to WhatsApp and has over 70 million monthly active users. It is extremely popular in Japan and most people use this app for all messaging and phone call communications with friends and family.

The app has many other features as well such as a timeline feed of user generated content, digital wallet,  online payments,  news, and more. Brands can advertise on the timeline feed through Sponsored Posts which are similar to Facebook's News. This makes it an extremely powerful platform for marketers to consider when trying to reach their target audience and much more.  It also has a suite of features  for businesses to create official accounts and send promotional messages to followers as well as provide chat based customer service.  

Having a presence on LINE is important, especially for direct-to-consumer brands. LINE allows you to build up a list that you can directly message with marketing campaigns and acts similar to SMS or email marketing channels giving you a direct connection to your audience.  Given the direct messaging aspect of LINE, it takes a bit more bandwidth for brands to this channel since it requires a hands-on approach with communicating directly with your audience. Below are a couple of examples of LINE messages from businesses:

In terms of other social media channels, Japan has a large number of highly active users on other standard platforms such as Instagram, Twitter, TikTok and Youtube. Twitter, in particular, is very popular in Japan and Youtube as well. As with most of the world, TikTok's users tend to skew younger and this can be a good channel for reaching younger audiences in Japan as well.

When it comes to LinkedIn, adoption in Japan is still quite low, however the platform  has some presence among Japan’s international business professionals. LinkedIn has an estimated 2.8M active users in Japan as of 2021 so this is still quite low in terms of market share when you think of a country with total population of around 126 milliion. Nonetheless, LinkedIn can still be an effective B2B marketing platform for brands that are focusing on niche markets and the quality of leads over quantity.

Search Engine Marketing

Japan's search engine market has a few things that are quite different from what you may be used to in other countries. Most notably is the fact that significant amount of the population use Yahoo! Japan for searching the web. Historically the most popular search engine in Japan was  Yahoo! Japan. However in recent years Google has taken a majority of the search engine market share.

Similar to Google, Yahoo Japan also has an advertising platform which primarily offers search and display advertising. It's similar to Google Ads but with an older looking UI. We'll take a closer look at this as well in our advertising section.

When it comes to SEO of your website, you need to consider some of the inherent characteristics of the Japanese language to know what keywords you should target. For newcomers, Japanese SEO can be difficult to navigate by the fact that words can be written in Hiragana, Katakana, Kanji and sometimes even English. If you're not familiar with Japanese and using machine translations, you can really get yourself into a mess scenario when trying to optimize your website for search engine traffic. This warrants a whole article in itself, but I'll leave this piont here for now.

It's also worth pointing out industry-specific search engine usage is also common in Japan. In many cases this can also come in the form of review websites for businesses. Some key websites worth pointing out are:

• ITreview for software  reviews
• Tabelog for food and restaurant reviews
• Hot Pepper for beauty and fashion
• Kakaku for electronics
• Jalan for travel
• Amazon, Rakuten and Yahoo! Shopping for ecommerce

The above list can go on and on but we'll leave it there for now. These types of websites are important to note because they come up first in search engine results when people look for specific product or service categories due to their strong domain authority. So when relevant, it's important to have listings on these types of websites (and ideally with good reviews) so you can get exposure from the large traffic of these websites.

Advertising Channels

Social Advertising

Given that Japan's social media and search engine landscape is unique, you can already assume that the channels digital marketers spend their advertising budgets is also quite different. In this section, we'll talk a little bit more about things you want to keep in mind when it comes to social & search advertising. We'll also take a look at other channels like display ads and also what to consider when it comes to B2B advertising given that LinkedIn adoption is quite low in Japan.

When it comes to social media advertising,  Facebook and Instagram are still the most popular platforms among advertisers due to the large audience size and strength of their ad tech. If you want to explore some examples of Japanese Facebook & Instagram ads, just head over to Facebook's ad library and you can browse around to see ads brands are running in Japan. Here's an example for ads from Birkenstock Japan:

Twitter's ad platform is also popular, especially among brands in the service industry or brands pushing for upper-funnel awareness marketing.  Advertising on Youtube is also extremely common but tends to be better for brand awareness, retargeting, or lead generation and is a difficult channel to unlock for prospecting audiences to direct sales.

Tiktok Ads is also an advertising platform gaining recent popularity and is a great channel for brands looking to reach a younger audience. Other platforms like Pinterest and Snap have low usage and are generally not a top priority (or even a consideration) for brands looking to grow in Japan for the time being.

Search Engine Advertising

When it comes to search engine advertising in Japan, there are 2 places you want to be: Google & Yahoo.  Recent estimates show that Google has a market share of around 70% and yahoo comes in at a distant second with 25% market share. With each year that passes Yahoo has been losing market share and it's also worht noting that the tech behind Yahoo's search engine is actually currently powered by Google.

Despite Yahoo's dwindling market share, for the time being we still recommend having a presence here. Although lower market share generally means lower search volume, it's very possible to run ads at a lower CPC compared to Google and drive more efficient results out of your ad campaigns compared to Google as a result.

Running Yahoo search ads is similar to Google ads in many ways. The ad platforms interface resembles the old Adwords interface and uses the same concepts of keyword targeting, bidding, audience targeting, search text ads, and more.  In addition to this, Yahoo also has a powerful display network that we can also take a closer look at in our next section but for now here is a look at what some Yahoo search ads look like:

Display Advertising

Display advertising is also popular in Japan and can take on many different forms and come in all different shapes and sizes. Some common ad types you'll see are banner ads, video ads, rich media ads, and native advertising. Here are some of the main players in the display advertising space that digital marketers in Japan like to use:

• Google Display Network -  Google's display network is one of the largest in the world and Japanese marketers are no strangers to using it.
• Yahoo! Japan Display Advertising - As one of the largest internet companies in Japan, it's no surprise that Yahoo Japan's display advertising network is also popular among Japanese marketers. You can access high quality placements like the top fold of Yahoo's homepage.
• Criteo -  A French company, but with a strong Japanese presence, Criteo is one of the global leaders in performance display advertising and can be a great tool for dynamic retargeting in Japan.
• Smart News -  A Japanese news aggregator that has a display network with around 30,000 sites. They also have some interesting native advertising products like "Smart Layers" which can be used to increase brand awareness.
• Gunosy -  Another popular news aggregator in Japan that has a display network reaching over 30,000 sites. They offer native advertising and various other ad products.
• Outbrain -  Known for their content recommendation widgets, Outbrain also has a display network in Japan that reaches over 25,000 sites.

If you're looking to just get started with display ads, we recommend just starting off with Google & Yahoo display networks. You'll have access to plenty of quality inventory and can then consider other networks after starting there. Here is an example of some of the quality placements you can reach on Yahoo's network such as this ad from Amazon on the front page of Yahoo Japan's website:

‍B2B Advertising

As we discussed earlier, LinkedIn adoption is still quite low in Japan with around 2M active users currently. LinkedIn can still be an effective channel for advertising for B2B businesses in a niche industry focusing on very specific accounts they want to target or businesses still working with smaller advertising budgets.

Search advertising will likely need to be a critical part of your B2B advertising strategy and allow you target high-intent search queries. If you need to scale up even further and go beyond search, Facebook in Japan still has a professional layer to it as a social network and can be a channel for B2B marketing since LinkedIn adoption is low. In addition display networks on news aggregator websites like Smart News and Gunosy are also a great channel for B2B marketers to consider, as they can reach the business world through relevant contextual targeting features.

eCommerce Malls

When it comes to ecommerce in Japan, there are several main players you should be aware of. To start with, the 3 largest players to consider are Rakuten, Amazon, and Yahoo Shopping ( 3.9 Trillion JPY, 3.4 Trillion JPY, 0.9 Trillion JPY respectively in 2021 revenue). Rakuten & Amazon are similar in market size and those 2 platforms alone own a strong majority of the market. Despite this, other platforms like Yahoo Shopping and even smaller niche platforms are still important. Here is a list of ecommerce malls to keep on your radar:

• Rakuten -  Japan’s largest ecommerce company. Rakuten owns a number of different businesses and services, the most popular ones in Japan being the Rakuten marketplace.
• Amazon -  One of Japan’s biggest ecommerce platforms. Amazon Japan was launched in 2000 and has been steadily grabbing more and more market share with every year that passes.
• Yahoo! Japan Shopping -  Japan’s third-largest online marketplace. Yahoo Japan has a strong presence in Japan and its marketplace will continue to be a significant player for the foreseeable future.
• ZOZOTOWN -  Japan’s largest online fashion-specific ecommerce mall. ZOZOTOWN has over 2700 brands on their website and if you're a fashion brand, this is definitely an important one to consider.
• Qoo10 -  Japan’s fifth largest online marketplace. Qoo100 Japan was launched in 2010 and offers over 100 million products from Japan and around the world.
• auPAYマーケット (formerly known as Wowma!) was launched in 2012 and offers over 30 million products from Japan and around the world.
• dFashion -  Japan’s ninth largest online marketplace. dFashion was launched in 2013 and offers over hundreds of thousands of items from Japan and around the world.

Launching on these ecommerce channels can help brands tap into large audiences in the purchasing stage of their customer journey, however, it's worth also being aware of the following points:

• Revenue generated on these platforms is not always an incremental gain in revenue and can cannibalize revenue from your brand's ecommerce website.
• Building brand value on these platforms can be challenging. Many users of these platforms are bargain shoppers and looking for the best deal.The competition on these platforms can be quite high, and as a result product pricing is very important and can sometimes feel like a race to the bottom.
• Not having presence on these platforms can open up the door for unauthorized sellers to capture some of your brand's market share and lead to quality control issues.

Affiliate Marketing

Affiliate marketing in Japan is very popular and a key driver of ecommerce sales.  If done correctly, leveraging a powerful network of affiliates can help build brand awareness while also driving high quality users to your website that are ready to purchase. These networks offer a way for brands to reach new customers through existing websites and blogs that have an audience interested in the products or services being offered. Additionally, affiliates only receive payment based on performance for the most part, costs of affiliate marketing are performance based.

On top of that, if you really build up a high quality pool of affiliates, the content they produce should help with your websites SEO and boost your ranking in search engine results.

Here is a list of some of the commonly used affiliate networks  in Japan:

• A8
• Rentracks
• Rakuten Linkshare
• Moshimo
• Value Commerce
• Affilicode
• Amazon Japan Associates Program

The above list can also go on and on, but we'll leave it at this for now.

Pricing of affiliate platforms really varies by network and by the terms you're able to negotiate. However, generally speaking you will need to pay a commission per sale that typically range from 6% to 15%. It's also common to also be charged a set up fee and monthly flat fee but this varies by affiliate and terms you're able to negotiate. Given these costs, it's extremely important that you already have healthy profit margins before you get involved in affiliate marketing.

We strongly recommend finding a partner that is native in Japanese to help navigate the affiliate industry. This will really help smooth out the process of launching an affiliate program and give you more leverage when it come to negotiating terms with affiliate partners.

Finding digital marketing talent in Japan

When it comes to finding digital marketing talent in Japan, you typically have 3 options.  You can either go the agency route, work with a freelancer, or hire an in-house marketer.

Hiring an in-house marketer is an option, but it can be difficult to find someone with the right skillset as digital marketing is still in it's early stages in Japan compared to other markets. On top of that, finding English - Japanese bilingual digital marketers is quite rare in Japan. If you're interested in going this route, you can try using recruiting firms or websites like Wantedly to find talent. However keep in mind, there are many legal implications you'll need to consider if you're going to start building out an in-house team of full-time employees in Japan.

Working with a freelancer can be another alternative to get work done on a more limited budget. You can often find individuals on sites like Upwork, Lancers, or Guru. The downside to working with freelancers is that you need to put in the time to manage them and give clear instructions for each task. They won't be as hands-on with developing a full digital marketing strategy for your business.

Agencies will have a team of experts that can cover most aspects of your digital marketing, from website design to SEO to advertising campaigns. However, you need to find the right agency that will deliver quality work at a reasonable price. Large agencies like Dentsu, Hakuhodo, and ADK are known to overwork their employees and cut corners due to the excessive volume of work forced onto each employee. As a result, you can actually find a much higher quality of work if you take the time to search for the right boutique marketing agency. The right boutique agency will have lower overhead and as a result, won't need to overwork employees to be profitable. On top of that, if you find the right boutique agency they'll have top digital marketing talent and place a higher emphasis on quality of work over quantity.

Conclusion

As with any other country, the digital marketing landscape in Japan is constantly evolving. New platforms and technologies are always emerging and it can be difficult to keep up. However, by understanding the key differences between Japan and other markets, marketers can create strategies that effectively reach and engage Japanese consumers.

If you're looking for someone to help you navigate the Japanese market, just fill out our contact form and we'll be happy to help you take the next steps to grow your business in Japan.

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