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.
5-Year Results
Against a market growth forecast of 6.8%* for FY2023, our sales growth rate in FY2023 was 10.2%. Over the last several years, we have aggressively invested in AI technology, which is essential for maximizing advertising effectiveness, as well as digital transformation (DX) business to create new advertising businesses, which we intend to continue promoting in order to increase our operating margin.
- * 6.8% increase year over year in 2023 : “Advertising Expenditure Forecast 2023” published in July 2023 by NIKKEI Advertising Research Institute.
Competitive Advantage
Point1Operation capability to realize high advertising effectivenessAdvertising 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.
AI Lab, our proprietary AI research and development organization established in 2016, has risen to the rank of 4th in Japan and 49th globally* 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.
- * AI Research Ranking 2022 Thundermark Capital (Revised in February 2023)
- *1 Ad effectiveness win rate when comparing creatives made using the "conventional production process" versus those created using the "Kiwami Prediction AI production process."
- *2 Increase in search keyword quality score when comparing creatives made using the "conventional production process" versus those created using the "Kiwami Prediction AI production process."
In the rapidly changing internet advertising industry, we aim to achieve sustainable growth through flexible strategic planning.
Given today's expectations that the DX business will utilize "proprietary corporate data," CyberAgent is pursuing the challenge of creating new advertising businesses by quickly forming partnerships with major Japanese companies, especially in the financial, retail, mobility, and telecommunications sectors.
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