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INTERNATIONAL: SEO and Social Media Market Forecast in Japan

by Taku Amano, October 14, 2011

The Japanese population is known as a technological early adopter and Internet adoption has been no exception. The Japanese Internet market is listed among the top in terms of Internet penetration rate at 78.2 percent in 2010. It is ripe for online consumer communications for businesses looking at international markets.

According to one Japanese search marketing services provider, the country has one of the largest e-commerce markets in the world. Japan was among the first to embrace mobile Internet communications and commerce and is considered one of the most active social media markets. The Japanese Internet population is highly engaged in social media networks, most notably on Twitter and through blogs.

In 2009, a report of search engine market share in Japan indicated that 3.5 billion searches were conducted on Yahoo! sites, while 2.6 billion searches were made on Google sites, followed by 153 million searches on Rakuten, a shopping-centric Internet services provider.

With such high engagement and potential reach through Internet channels, it's no surprise that growth is forecast for online marketing in Japan, despite a year with economic setbacks.

SEO Market Trends

AUN Consulting, Inc., a global marketing company with a strategic focus on Asia, estimated the Japanese market for SEO in 2010 and the coming years.

According to their estimation, the Japanese SEO market reached 19.4 billion JPY ($252.5 million USD) in 2010 and it exceeded the forecast which it made in 2009. The SEO market in Japan had grown 18.6% year over year in 2010 and it exceeded the forecast. Regardless of company size, SEO spending increased steadily. At the same time, there were efforts to control the cost of advertising.

During 2010, there was pressure to reduce expenses for advertising and marketing due to the following economic trends:

  • The domestic employment condition was poor despite recoveries by foreign markets and improvements to corporate finance structure due to new domestic economic policies.
  • A volatile foreign exchange market and recessions among foreign markets.

Internet marketing is positioned as one of the vital marketing activities for companies, so that market scale has grown gradually. Because SEO is considered an essential Web marketing method, SEO was used by many companies regardless of a company's scale.

Outsourcing SEO service grew 22% year-over-year in 2010 and the market scale reached 7.41 billion JPY ($96.5 million USD) due to growing demand for performance-based SEO service.

Regarding in-house SEO trends, many companies showed strong attitudes against participation in paid seminars, directory submissions and link development. The in-house SEO market reached 9.97 billion JPY ($129.8 million USD) with 19% growth year-over-year.

In the category of SEO-related tools, the market grew slowly, reaching 2.01 billion JPY ($26.2 million USD) in 2010 with 6% growth year-over-year.

Projections of SEO in the Future

According to the report, the market spend on SEO is expected to reach 22 billion ($276 million USD) in 2011 and will expand to 29 billion JPY ($382 million USD) by 2014.

An increase of 5 percent to 15 percent year-over-year in the number of SEO companies was predicted, in part due to Yahoo! Japan's partnership with Google for both paid and organic search listings. SEO agency hiring is expected to grow due to the following:

  • Rising demand for more professional skill for SEO to succeed.
  • Multi-language demands due to multi-national companies.
  • Moreover, the in-house SEO market is expected to expand and grow strongly and steadily due to high demand from wide-ranging types of business.

Social Media Consumption in Japan

Social media consumption is popular in Japan, and in 2010 Nielsen reported that two hours and fifty minutes per person were spent on social media sites in a month.

Another Nielsen study of social media in Asia found that Japanese Internet users are the most avid bloggers in the world. Japan holds the top spot as the nation with the highest blog output, at more than one million posts per month.

The most popular social network in Japan is Twitter, which reached 15.6 million visitors to overtake second-place Mixi with 13.6 million visitors at the end of last year. While 10 percent of Internet users in the U.S. use Twitter, 16 percent of Japanese Internet users are on Twitter.

For years it seemed that Mixi was an untouchable leader in the social network space. The site is unique to Japan and features diary-style updates, messaging and photo sharing. However, user growth on the service appears to have plateaued and Twitter overtook it in November 2010 as the most-visited online social destination in Japan.

Facebook is also gaining a foothold in the country. According to a Nielsen report from August 2011, Facebook reached 10.8 million users in Japan for 460 percent growth year-over-year. The percentage of Facebook users in the online population in Japan is 17.1 percent. It took 12 months to reach 10 million users from the previous 2 million users. Facebook has increased its users as fast as Twitter, which had increased its users rapidly in the past.

Active Monthly Users on Twitter / Mixi / Facebook (August 2011)

Opportunities for social media marketing in Japan are great and varied, from blogging to video to advertising on social networks. Across social networking channels, it's important to note the role of the mobile device in the Japanese Internet user's everyday life. Mobile browsing and access are not considered actions primarily associated with local intent. Instead, mobile devices are integral to information and socialization practices for the vast majority of the population.

Online Marketing Opportunities Abound in Japan

When you consider the high Internet penetration rate and high level of online engagement taking place in the Japanese marketplace, it becomes clear why SEO adoption and demand increased 18 percent in 2010 and is expected to continue to grow through at least 2014. The market is also highly active in the e-commerce sector and social media involvement, pointing to an opportunity for businesses looking for responsive consumers open to social influence factors that may develop brand affinity and loyalty.


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