TOKYO-Advertising on mobile terminals, including the popular i-mode-enabled terminals, has established itself as a lucrative business in Japan.
The number of Japanese users who access the Internet via cellular terminals exceeded 15 million in early August. Included in that number are 10 million i-mode users.
Finding a new medium for marketing, advertising companies are rushing to cellular operators to include their advertising on cellular phones. Advertising fees on mobile services range from 30 percent to 100 percent higher than rates for fixed-line Internet Web sites.
NTT DoCoMo, the leading cellular phone carrier in Japan, is also marching ahead in the advertising business. The carrier established a joint venture last June with Dentsu, the largest advertising agency in Japan. The company, called D2 Communications (D2C), works as the media representative for i-mode’s “official” sites, which number around 1,000.
D2C is providing banner ads for several sites, including Mobile Town Page, a yellow-page service provided by NTT Directory Information Services. The capacity for one banner advertisement is limited to 500 bytes. Advertisers can choose among three response mechanisms: click, which links the user to the advertiser’s Web site; phone, which allows the user to call the advertiser; and mail, where an e-mail is sent to the advertiser. The firm plans to provide text-style ads for i-mode later this year.
Takayuki Hoshuyama, marketing manager for D2 Communications, said mobile ads are different from Internet ads. “For instance, mobile terminals are owned by individuals, while PCs are often shared by more than one person (in Japan). Users of mobile terminals and PCs are not necessarily overlapped,” he said.
The firm will work out a new advertising concept for mobile terminals, which might be different from Internet ads, said Hoshuyama.
Targeting the 10 million i-mode users, other advertising companies are entering the market.
Value Click Japan, a subsidiary of U.S.-based advertising firm Value Click, is entering the market by targeting the 18,000 “unofficial” sites for i-mode. The firm is well known for its unique click-guaranteed ads, whereby the advertiser pays a specific amount each time an i-mode users clicks on an advertiser’s ad. The ads run until a specified number of users click on the ads.
Since February, the firm has provided ads for unofficial i-mode sites on an experimental basis. Jonathan Hendriksen, president and chief executive officer of Value Click Japan, said he would like to launch commercial-based services for Mobile Click, the advertising service for i-mode, in the fourth quarter. The company’s text-style ads have up to 16 Japanese characters or 32 English or numerical characters.
The firm now charges 155 yen (US$1.45) per click for up to 5,000 clicks, 150 yen (US$1.40) per click for up to 10,000 clicks, 145 yen (US$1.35) per click for up to 20,000 clicks, 140 yen (US$1.30) per click for up to 30,000 clicks, and 130 yen (US$1.25) per click for up to 50,000 clicks. According to Hendriksen, these charges are higher than those for Internet Web sites by 30 percent.
So far, Nisshin Food Product and Kirin Beverage Corp. have run advertising using Value Click Japan. Nisshin Food Product manufactures Cup Noodle, an instant noodle product. Nisshin selected a 2,000-click package for advertising its new tongarashi-hot pepper-noodle campaign, and Kirin selected a 5,000-click page for its draft beer campaign.
Digital Advertising Consortium (DAC), a Tokyo media representative firm, started selling advertising for I-seek, a search engine site for the i-mode service at 0.33 yen per page view. According to DAC, the charge is about double compared with Web site advertising rates.
J-Sky, EZ Web/EZ Access
Cyber Agent, an independent advertising agency in Japan, provides mobile advertising for J-Sky, an Internet access service provided by J-Phone Group. The ad agency has offered advertising for the asahi.com site on J-Sky since April.
To emphasize its mobile advertising business, Cyber Agent in May established CA Mobile, an agency exclusively for mobile media. The firm plans to provide advertising for all mobile devices, including personal digital assistants (PDAs), portable game machines and car navigation systems.
Cyber Media, a Tokyo-based marketing firm, on 1 August began supplying text-style ads for i-mode and J-Sky sites. The capacity of one advertisement is limited to 16 Japanese characters. Cyber Media charges 1 yen (US$0.09) to 3.5 yen (US$0.33) per page view.
Wireless carriers IDO and DDI also have not taken a wait-and-see position. The operators ran ads over their EZ Web/EZ Access sites between April and May on an experimental basis in cooperation with Hakuhodo, the second-largest advertising firm in Japan, and Nissho Iwai Info, an Internet business arm of Nissho Iwai.
DDI and IDO are now considering placing advertising on their Internet service sites on a commercial basis prior to their merger with KDD scheduled for 1 October.
Cash-back advertising
Many other ad firms, including K-tai Net, are entering the market targeting the large number of mobile Internet users. The firm is offering unique cash-back services for mobile users who agree to see their ads on cellular terminals.
According to Shinpei Kato, a K-tai Net spokesman, when cellular users receive ads, they receive a payment of 50 yen (US$0.47) or more. The payment, made by the advertiser with a commission for K-tai Net, is transferred to the user’s postal savings account, a popular government savings system.
Benefit Japan, a media representative based in Osaka, delivers e-mail ads and information, such as discount sales information from mainly small retailers, to cellular users. According to the firm, it provides free terminals to mobile end users who agree to receive its e-mail. Advertisers pay 10 yen (US$0.93) per mail delivery fee, in addition to the minimum 20,000 yen (US$187) per month data controlling fee to Benefit Japan.
