Sales Internet Advertising Co., Ltd. calculated the trends in the amount of “direct advertising (selling advertising)” and “image advertising (branding advertising)” and made future predictions.
Image advertising has been the mainstream in Japan since the postwar period, but as the social and economic environments surrounding consumers and businesses have changed, the use of direct advertising has increased.
Based on past trends in ad spending, successful online advertising companies predict that direct advertising will account for approximately 70% of advertising by 2025.
From focusing on “image advertising (branding advertising)” to “direct advertising (advertising that sells)”
The Japanese advertising industry was centered on “image advertising (branding advertising).”
Image advertising specifically refers to television commercials and
newspaper advertisements
.
During the period of high economic growth, demand for products was high, and the role of advertising was thought to be to “increase product awareness,” and the common business model was to get people to see the advertisement, come to the store, and make a purchase.
However, after a period of high economic growth, people’s demand for products and their desire to consume began to decline.
Today’s consumers have basically everything they need. Furthermore, consumers have become increasingly cautious about spending money due to the collapse of the bubble economy, the Lehman shock, the earthquake disaster, and the coronavirus shock.
As a result, advertisers have come to seek “cost-effectiveness” in advertising and have come to view advertising as an “investment.”
As a result, “direct advertising (advertisements that sell)” has become more sought after than image advertising. Direct advertising differs from image advertising in that it asks consumers to respond to the advertisement.
Growth in the mail order (D2C) industry and increasing demand for direct advertising
It is said that the cost-effectiveness of image advertising, which has been the mainstream until now, has hardly been quantified.
The reason behind this seems to be that major advertising agencies have intentionally avoided quantifying the data in order to protect their vested interests.
However, with the advancement of digitalization, it has become easier to quantify cost-effectiveness, and due to the economic downturn, advertisers have begun to place greater emphasis on cost-effectiveness than ever before.
Amid these changes, the Japanese advertising industry is said to be abolishing vested interests and transforming into an industry that fights based on numbers.
Since 2007, digitalization has accelerated with the advent of smartphones, and online shopping (D2C) has also accelerated its expansion.
The demand for online shopping (D2C) is increasing during the coronavirus pandemic of 2020, and since direct advertising is used in online shopping (D2C), the demand for direct advertising is also increasing.
Expected to reach 2.7 trillion yen in 2020 and 3.88 trillion yen in 2025
The graph below shows the trends in the amount of advertising for “image advertising (brand advertising)” and “direct advertising (advertisements that sell)” from 2000 to 2019, and the forecast for the trend in advertising amount from 2020 to 2025. is.
Source: “Selling Internet Advertising Company” calculates the trends in placement amount of “Selling Advertisements (Direct Advertisements)” and “Image Advertisements (Branding Advertisements)”
The amount of image ads is decreasing, while the amount of direct ads is increasing, indicating that direct ads exceeded the amount of image ads in 2018.
As the economic recession continues, companies (especially small and medium-sized enterprises, which account for 99.7% of the total), are becoming more conscious of cost-effectiveness.
As more and more companies reduce their advertising costs due to the coronavirus pandemic, it is predicted that demand for direct advertising, which has clearer cost-effectiveness, will continue to increase.
Online advertising companies that can sell based on the above are expected to spend 2.7 trillion yen in direct advertising in 2020, and 3.88 trillion yen in 2025.
Source: “Selling Internet Advertising Company” calculates the trends in placement amount of “Selling Advertisements (Direct Advertisements)” and “Image Advertisements (Branding Advertisements)”