Market Overview

The recession caused by COVID-19 crisis had depressed the business performance in various industries for FY2020. However, FY2021 saw substantial growth in the online advertising market, because of economic recovery together with increased advertising budgets at companies in reaction to the previous-year reduction and rapid progress in digital transformation. Meanwhile, the market growth in FY2022 was moderate as relaxed behavior restrictions encouraged the investment budgets that had been temporarily geared to online to back to offline once again, normalizing the budgets. The estimated online advertising market size was 2,934,000 million yen (based on the total amount of online ad placement), 112.2% of the preceding year.

FY2023 saw gradual economic recovery as the demand revival which boosted the economy right after the end of the corona crisis has been almost saturated. The growth of the online advertising market, though continues, is projected to slow down to 3,118,000 million yen, 106.3% on YoY.

Noteworthy Topics

Influence of AI to Online Advertising Market

Online advertising is regarded to use AI for work efficiency and for diversifying services. In practice, AI has been widespread in various areas including creative generation, ad effect forecasting, and work efficiency improvement for ad management operators. In particular, AI application in the field of creative generation is projected to accelerate.

In the system provided by platformers, AI has already been used from before with the technology levels kept on improving. While this is beneficent for the online advertising market, depending on how to utilize AI is likely to affect enormously to the business by ad companies. For instance, if AI automatically optimizes advertising budgets, it can substitute a part of the value provided by ad companies.

There also are some concerns over excessive expectation on AI. AI has the possibility of being used only as one of the methods for work efficiency or AI chat services being limited to users with high IT literacy. There also are some challenges in utilizing AI, such as the problems of transparency, accountability, security, and the priority issues between ethics and laws.

Future Outlook

It is likely for the shift from other media to online advertising to continue. In addition, progress in digital transformation and increasing ratio of ecommerce at companies expect the market to continue growing moderately.

When observing the market by ad type, the growth of search advertising and social media advertising, and video ads are expected to drive the market, with the online advertising market exceeding 4 trillion yen by FY2027.

Research Outline