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Internet Advertisement Business

The internet advertisement business now accounts for roughly half of CyberAgent's total sales. CyberAgent has been providing the service since 1998 and is now one of the largest market share holders in Japan. The company leads the market by leveraging its operational and technological advantages, including AI, to maximize advertising effectiveness for its clients.

Market

Internet Advertising as a Growth Industry

While total advertising spending in Japan has only increased moderately, internet advertising spending has risen rapidly in tandem with society's digital shift, surpassing TV advertising spending in 2019.
The internet advertising accounted for 45.6%* of total advertising spending in Japan in 2023, and we believe there is room for further growth when compared against overseas markets where it has already passed 50%.

  • * Internet share of total media ad spend in Japan: Dentsu Inc. 2023 Advertising Expenditures in Japan

Our Growth Continues to Outpace the Market

The widespread use of programmatic advertising* is one of the factors driving the rapid growth of internet advertising.
Our sales growth rate continues to outpace market growth as a result of efforts to improve our technological advantages and organizational structure to bolster operational capabilities.

  • * Programmatic Advertising: Programmatic advertising is a form of digital advertising that allows advertisers to bid per ad display or per click, and to change creatives, targeting, budget, and other parameters in real time.
  • *Growth transition: Growth rate based on setting 2012 as “100”
  • *Internet Ad Market: “Advertising Expenditures in Japan 2023” by Dentsu, Inc.

5-Year Results

Sales growth in FY2024 was up 7.6% from the previous year, continuing to increase revenues above the market growth rate* and proving our market share gains. In recent years, we have invested heavily in AI technology to maximize advertising effectiveness and digital transformation (DX) to develop new advertising businesses. The FY 2024 OP margin has increased as a result of productivity improvement through the use of AI.

  • *Market growth: Grew 5.9% year over year in 2024. “Advertising Expenditure Forecast 2024” published in July 2024 by NIKKEI Advertising Research Institute.

Competitive Advantage

Point1Operation capability to realize high advertising effectiveness

Advertising effectiveness is becoming increasingly important as programmatic advertising becomes more prevalent. CyberAgent Group, including CyberAgent itself and its subsidiaries and organizations that specialize in advertising, has amassed a wealth of unique operational expertise and advertising data over the decades. By combining this with its technological advantages, including AI technology-driven advertising products and creative production studios equipped with state-of-the-art equipment, CyberAgent strives to maximize advertising effectiveness.

Point2Cutting-edge technology using AI and other technologies

AI Lab, our proprietary AI research and development organization established in 2016, has risen to the rank of 4th in Japan and 49th globally*1 as a leader in AI research, all while striving to enhance collaboration between industry and academia.
Its research findings have been used to develop a wide variety of products. Among these, we are especially proud of the high advertising effectiveness of our independently developed "Kiwami Prediction Series" (ad products using generative AI), which allows us to deliver ad creatives that outperform existing ones.
We also worked early on to develop a large-scale language model (LLM) that is well suited to Japanese language and culture, and in May 2023, we made our original Japanese LLM available to the public. Since then, we have continued to upgrade the LLM and version 3, CyberAgentLM3, released to the public in July 2024, was ranked 14th in the world, the highest in Japanese companies*2.

  • *1 AI Research Ranking 2022 Thundermark Capital (Revised in February 2023)
  • *2 NIKKEI Digital Governance and Weights & Biases jointly evaluated 42 major Japanese large language models developed by leading companies and research institutions based on 14 indicators. (August 2024)
Point3Adaptability to change in response to the external situation

In the rapidly changing internet advertising industry, we aim to achieve sustainable growth through flexible strategic planning.
Given the growing expectations for the future of DX business utilizing “proprietary data held by companies,” we were among the first to form partnerships with major Japanese companies in the finance, retail, mobility, and telecommunications industries, and are promoting the creation of new advertising business.
We are also expanding our business domain and strengthening our support for companies to develop reskilling programs on using generative AI, as well as promoting digital transformation of medical institutions, mainly drugstores and pharmacies.

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  • Internet Advertising Agency Website

    Covering the latest case studies, methods and interviews with partners.