In this article we cover the digital marketing trends in Japan that you need to know in order to hit the ground running in 2021.
Table of Contents
Marketing with Privacy Considerations in Mind
In recent years, Japanese consumers have become much more aware of the issues related to online privacy and digital marketing.
As consumers have gained a better understanding of how companies collect and use their data–some of which includes highly personal and private information–for various marketing purposes, a number of changes are coming into effect that will greatly impact digital marketing practices.
Apple’s move towards improved user control of privacy settings in their most recent mobile update, iOS 14, and Google’s planned phasing out of third-party (3rd party) cookies starting next year are both prime examples of this inflection point.
Consumers are becoming more informed about how businesses obtain and use data for digital marketing purposes, with many demanding increased privacy protections
So what are the implications for marketers and advertisers in Japan with regard to privacy and user data?
There’s no two ways around it: We will have to work with less data about our customers than we do now, but that’s not necessarily a bad thing. Let’s be fair, some of the data that some companies gather is widely considered by consumers and privacy advocates to be excessive and overly intrusive.
Digital marketing will still be data-driven, but first-party data (1st party data) will be the gold standard when it comes to analytics. In other words, while the skills relating to data analysis that many modern, digital marketers possess are still at the heart of digital marketing, there will be a strong need to draw on fundamental marketing skills and strategy, which have somewhat fallen out of fashion, in favor of tactics, over the past 15 to 20 years.
While it won’t be a return to an earlier era of marketing and advertising in the style of Mad Men, it is a going to be a notable change in trajectory from where we were heading.
Additionally, the absence of third-party cookies will drastically weaken many of the current offerings from the ad tech industry, until some sort of alternative is found. However, with increased scrutiny on privacy and beliefs on privacy, it may not be anywhere near what is being utilized now.
The end result will see a more complex landscape for advertisers and marketers in Japan on the one hand, while creating new opportunities for businesses that will step in to fill the vacuum left behind from having less data. Both Google and Facebook (assuming the latter still retains its place as the world’s largest social media platform) can only benefit from digital marketer’s lack of third-party data, and more businesses will come to rely on the vast amounts of data that those services provide users through their advertising platforms.
Digital Transformation (DX)
While privacy in digital marketing is perhaps the biggest topic globally, when it comes to digital marketing trends in Japan, the most important topic for 2021 is digital transformation (DX).
The rush to establish and implement a digital transformation strategy within many Japanese organizations got a kickstart last year, and will continue with much urgency in 2021.
As businesses in every industry, sector, and vertical, have had to deal with the ongoing global pandemic, the heaviest hit businesses in Japan have been brick and mortar retailers and those without a strong digital component to their operations.
Furthermore, for Japanese businesses who are primarily B2B and relied on in-person meetings or negotiations, they have struggled far more than those where digital made up a larger part of their business.
One of the notable, positive changes to Japanese business practice that is coming about due to recent digital transformation efforts is the move towards digital signatures. This is a big change for Japan, which has until now heavily relied on a combination paper and personal seals called hanko (判子) in lieu of signatures for all sorts of official documents and personal transactions.
Other ways in which digital transformation in Japan is seen to be gaining momentum is in the adoption of cloud tools and services which not only helps facilitate communication among colleagues working in-office, but also allows for teams that are currently engaged in work from home to collaborate more easily.
One of the more popular communication tools used by Japanese businesses is Slack, which has seen major growth both globally and in Japan as a result of the pandemic.
Meanwhile, video conference solutions, such as Zoom, have also become much more common in Japan as efforts are made to reduce face-to-face and in-person meetings as much as possible.
Digital transformation in Japan is no longer a priority, but a necessity. Moving forward in 2021 we expect to see rapid digitalization in all sectors happening here in Japan.
Ecommerce Continues to Grow in Japan
With more Japanese people spending the majority of their time at home, ecommerce in Japan has taken on a much bigger role in the Japanese consumer experience.
While Japan has never had a hard lockdown like some countries, a state of emergency–which calls for stores to shorten hours of operation and people to stay indoors as much as possible–has now been declared twice since the pandemic began.
As a result of the pandemic and these state of emergency declarations, Japanese ecommerce has seen much broader usage than previous years, even among individuals who usually do most of their shopping in-store.
Additionally, a growing number of traditional, brick and mortar businesses have looked to both ecommerce and digital marketing to help make up for lost in-store sales.
This trend in Japan mirrors the pattern we have seen in the US where, according to McKinsey, in just a few months the ecommerce market has made the kind of gains that would have taken 10 years prior to the pandemic.
Source: McKinsey
Increased Competition on Digital Platforms in Japan
With many advertisers essentially declaring last year a wash, we observed a number of Japanese businesses simply decide to sit things out and wait for 2021 to restart their marketing efforts.
As more advertisers start up their digital campaigns once again, however, we are already seeing a much more competitive market for digital advertising in Japan than in previous years.
While it’s probably the most unwelcome of the digital marketing trends in Japan for 2021 on this list, digital advertising expenditures and digital media spend are expected to continue to rise when it comes to things such as Japanese PPC, social media, and video advertising.
Source: Statista
In many cases media budgets will need to be increased to reflect the rise in costs for ad placements on the various digital platforms within the Japanese market.
This more complex media landscape in Japan will also require better media planning and media buying strategies to succeed, especially for foreign brands.
Finally, as the Japanese digital landscape becomes more competitive, strategies which utilize multiple channels and platforms are often yielding better results than those that rely on a single channel.
Influencer Marketing
Influencer marketing continues to play a large role in social media strategy in Japan and shows no signs of stopping in 2021.
For global brands looking to use social proof as part of their marketing strategy in Japan, working with Japanese influencers and key opinion leaders can help these brands reach both their target audience as well as potential new customers.
Popular platforms for Japanese influencers, such as YouTube and Instagram, are still among the most common for sponsored posts and offer opportunities for collaboration for all kinds of brands, niches, and verticals.
While the most popular YouTubers in Japan and those with the biggest Japanese Instagram accounts may have tremendous reach, there is often a trade off when it comes to engagement. As a result, Japanese micro influencers and nano influencers are also proving popular alternatives for brands, rather than simply relying on those influencers with the highest number of subscribers or followers.
TikTok’s Popularity Among Japanese Teens
In terms of social media in Japan, the biggest story is without a doubt, TikTok.
Last year, TikTok experienced tremendous growth here in Japan, especially among teens and those in the younger demographics. At the same time, TikTok also made headlines for being at the center of various political spats, with a number of countries outright banning the app.
Regardless of the actions taken against the app in other countries, TikTok in Japan has been aggressively promoting its ad platform towards Japanese advertisers.
However, when it comes to TikTok as an advertising channel in Japan, it still remains early days so to speak.
Currently TikTok is nowhere near as widely used as other digital advertising platforms or those services that have a more proven track record when it comes to delivering results for businesses in the Japanese market.
Be that as it may, we still expect TikTok to continue to be one of the biggest digital marketing trends in Japan for 2021, most notably for consumer brands with a teen audience.
Video Ads
Video Ads are not an entirely new digital marketing trend in Japan, but there has been a noticeable shift among big domestic brands to use video ads for a larger portion of their digital advertising.
One of the main reasons that video ads in Japan are proving to be so popular among bigger advertisers is because of their higher engagement when compared with many other types of creatives.
With the growth and popularity of TikTok as a platform also helping to further this trend towards video, it should come as no surprise that video ads in Japan are gaining such traction.
However, the biggest downside to utilizing video ads in your digital marketing in Japan still comes down to costs.
The best content is always localized for the market and creating video ads specifically for the Japanese market and Japanese consumers is not as well-suited for smaller advertisers. In fact, using video ads in Japan is even a hurdle for many medium-sized and large organizations that operate on a global scale.
Ultimately, the decision about whether or not to incorporate video ads as part of your digital marketing strategy for Japan requires careful consideration of your goals and objectives in the market and should be weighed against your other options.
That being said, we are expecting to see more businesses using video ads to promote their brands in Japan in 2021 than previous years and do not see this trend reversing any time soon.
Virtual Events
As we face continuing uncertainty about our ability to hold large-scale, in-person events in Japan in 2021, virtual events will become far more commonplace.
In fact, when it comes to events, conventions, and trade shows in Japan for 2021, it is very likely that the virtual component will actually take on the main role as many events in Japan, out of sheer necessity, were entirely live streamed this past year.
The popular video game expo, Tokyo Game Show (image below), had its most recent convention cancelled and was instead held in a completely digital format.
Source: Tokyo Game Show
Musicians and bands are also among those utilizing live-streamed virtual events in Japan due to restrictions on gatherings. One of the more notable example this past year was the popular, Japanese boyband, Arashi, who conducted their last concert before entering hiatus, through a paid, live-streamed event on New Year’s Eve.
While there are many opportunities for applying this kind of technology, hosting and promoting events online will need to become a lot more sophisticated, in order to give people a truly unique experience.
Marketing to a Changed Japanese Consumer
Covid-19 continues to have a tremendous impact on Japanese consumers.
While there are many types of consumer personas in Japan, each with their own unique motivations and characteristics, uncertainty will be a major theme impacting all of them.
For consumer-facing businesses and brands especially, this uncertainty that Japanese consumers face will be a major hurdle for marketers to overcome in 2021.
Economically speaking as well, the virus has adversely affected the average Japanese consumer’s purchasing power and willingness to spend.
This means that for new brands that haven’t built up enough trust among Japanese consumers, communication and establishing relationships with new customers will be extremely important.
While Japanese people are incredibly resilient, there are many new factors which will influence how successful your product or offering will be in the Japanese market in 2021 compared to previous years.
Any successful digital marketing strategy will have to account for the various changes to Japanese consumer behavior as a result of the coronavirus in combination with a deep understanding of the Japanese market and Japanese digital platforms.
As we still grapple with this ongoing situation, the importance of on-the-ground support for digital marketing in Japan has never been more clear.
Bottom Line: Digital Marketing Trends Japan 2021
Last year was unlike any other year in many ways, and as marketers we still find ourselves facing many of the challenges it brought.
Our list of the most important digital marketing trends in Japan for 2021 reflects both these challenges as well as the potential opportunities presented.
Digital marketing continues to grow in importance within the Japanese market, and as we increasingly become a more digital society, its function will become even more crucial to business success.
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