Search Engines Shape Japan's Internet Ad IndustryIt is safe to say that search engines have been the driving force to shape advertising on the Web. Search engines have validated the online banner as a viable advertising vehicle and advanced the concept from simple display banners to click banners all the way to click-through tracking and customized responses. Japan's search engines are no different and are blazing a trail of innovation for sites in Japan.
by Forest LintonThe industry at a glance The amount of Web traffic has been increasing steadily with the number of Internet users. Japan's top sites average 3 million hits a day, with up to 10 million page hits on a busy day. Yahoo Japan is the busiest search engine by far, but in Japan, newspapers make up many of the top-ten busy sites - with Asahi.com and Nikkei Net leading the pack. It was these newspaper sites that first started selling banner ads in a big way from summer of '95. Ads on the top sites were going for about ´300,000 at that time, but it was on a random, case-by-case basis with little auditing of site traffic and very fuzzy knowledge of cost-performance ratios. It wasn't until the launch of Yahoo Japan in late '95 and the evolution of search engines into high-traffic sites that Web advertising solidified. Advertising sales agents specializing in online media, such as Cyber Communications Inc. (a joint venture between Dentsu and Softbank), brought order to the chaos. Companies like Dentsu and CCI introduced rate cards and auditing methods to the Web in Japan, just as Nielsen and ABC had done in the States. In a report issued in March, Dentsu roughly estimated Japan's Internet advertising market in 1996 to be ¥1.6 billion ($14 million at ¥115/dollar) and growing to ¥4 billion (about $35 million) in 1997, a 150% year-on-year increase. Dentsu acknowledges the difficulty of getting exact figures due to cross-media bundling (such as newspaper-ad contracts that bundle online ads with regular print ads) and the lack of information on creative and engineering costs. In the summer of 1997, the average monthly online banner contract for a top-ten busy site went for about ¥1.2 million. This usually offered 300,000 to 400,000 guaranteed page hits (defined as the number of HTML documents that are accessed) per month. Page hits have become a standard measurement in recent months as opposed to total overall hits, which include hits of all of the images and graphics on a page.
Search engine news
On July 15, 1997, Yahoo Japan launched a public stock-quote service providing 20-minute delayed quotes from the Tokyo Stock Market. This is the first free, public Internet stock-quote service available in Japan. (Other services have only offered closing prices for free over the Internet.) The new service is available at http://quote.yahoo.co.jp and includes the latest key market indices, market news from Reuters, a stock look-up code database, and the stock-quote service itself. You'll need a browser that can display Japanese fonts to access this service on Yahoo Japan. The following day, NTT announced several upgrades to its NTT Directory Internet search service, including free access to closing stock prices. NTT has introduced a beta of its InfoBee 97 search engine (http://beehive.navi.ntt.co.jp), which offers faster searches, improved filters, and ranks hits and retrievals by subject. Another enhancement is free closing stock prices for the Tokyo market (http://navi-sub.navi.ntt.co.jp/stock/index.html). The information, from Daiwa General Laboratory, includes the stock's closing price, high and low for the day, and change on the previous day's close. For users of Java-compatible Web browsers, extra information includes historic charts. Infoseek Japan (http://japan.infoseek.com) will soon begin offering advertisers the chance to target messages to users based on their top-level Japanese domains: the commercial co.jp, the academic ac.jp, and the organizational or.jp. Future plans call for the system to be expanded to target users more narrowly, such as by operating system or browser used. This could be done by looking at the browser's user agent when it hits the site. Infoseek was to have rolled out this system by the end of July. On July 24, 1997, InXight Software, a Xerox New Enterprise Company, announced a new software application that allows the Excite search engine (http://jp.excite.com) to be used with Japanese-language content. The new "LinguistX" application helps identify the boundary between words - essential because written Japanese has no spaces between words. Combined with the Excite engine's powerful ability to allow users to do a "concept search" (which makes intelligent guesses based on the user's phrase or word grouping), the new software should put Xerox and Excite on a path to creating a Japanese engine with similar capabilities and new services. It has been licensed by Excite for its Japanese version, which now incorporates the engine.*
If you have questions or comments about "The Digital Forest," you can contact Forest Linton at forest@gol.com
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