Online Advertising Changes Industry’s Circumstance

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Difference between Official Account and LINE@

LINE

According to “Advertising Expenditures in Japan” released by Dentsu Inc., total advertising expenditures in 2012 increased for the first time in five years.

Online advertising in Japan has grown, while advertising expenditures have decreased since the Lehman shock of 2008. The online advertising market is still expected to expand in the future due to the spread of smartphones and the emergence of various SNSs. Being more affordable than mass advertising and because of its “attentive feature,” Internet media holds promise as an advertising outlet for small and medium-sized enterprises (SMEs).

“LINE@” for SMEs

It attracted people’s attention that the candidates were allowed to use the Internet for their campaigns during the elections to the Upper House in July. In their campaigns, various political parties utilized one of the social media called “LINE.” The parties obtained their own accounts and utilized them for their campaign activities, such as announcing their stump speeches during the election period.

A business account called “LINE@” was used by many at that time. This account provides services for stores (such as restaurants) that run business locally, media such as TV or magazines, and public entities such as schools and local governments. They can send messages with “Talk” or distribute coupons and information regarding sale events.

The monthly charge for the service is 5,250 yen (free for public entities), which does not burden even an SME. Although the number of “friends” can be registered and information distribution is limited to 10,000, there is a huge gap in price between this service and the official account, for which the monthly charge amounts to 3.3 million yen (see the table above).

 

Potent Effect on Guiding Customers to Stores

Formerly, only large, well-heeled corporations were able to put out advertisements in pricey mass media such as TV. However, as the Internet advertising market matured, promotion became more affordable for SMEs.

LINE Corporation (Shibuya-ku, Tokyo) explains the purpose of the launch of LINE@: “We received many inquiries and requests about the availability of the official account from stores and SMEs running businesses in their local areas. So, we started providing the service as a plan that was widely available to companies in various fields.” By September 2013, just nine months after the company’s launch of the service in December 2012, the number of subscribers surpassed 11,000.

This fact shows that SMEs’ needs for advertising through means of the Internet are also high.

The companies that use LINE@ seem to give high marks to the service in terms of guiding customers to their stores. However, they use the service in varying ways. For example, a retailer that sells fashion brands for young women experienced a 50% increase in sales from the previous week as a result of sending a message regarding the weekend sale. Elsewhere, a restaurant uses the service to encourage customers to come when there is a sudden cancellation of a table.

Moreover, SMEs and retailers that do business locally appreciate the convenience of the service, which enables them to send out messages from the smartphone when they don’t have PCs available in their stores.

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