If you’re planning to enter (or scale) in Japan, here’s the headline that should change how you think about budgets:
Japan is no longer a “TV-first market that also does digital.” It’s officially a digital-first advertising market, and it’s still expanding.
In its official report “2025年 日本の広告費”, Dentsu estimates Japan’s total advertising spend in 2025 reached ¥8.0623 trillion, and internet advertising accounted for 50.2% of total ad spend—the first time it crossed a majority threshold. You can see the summary and context directly in Dentsu’s release here: 2025年 日本の広告費 (Dentsu).
That alone would be a major structural shift. But the more important point for founders and growth teams is this:
Japan’s digital market is not “finished.” It’s still growing fast—especially in video and social—and platform changes in 2026 are expanding inventory and improving local ecosystem buying.
This article breaks down:
- what’s actually growing,
- what’s driving the growth,
- and the practical 2026 playbook for foreign brands.
1) Growth isn’t slowing—Dentsu’s 2026 forecast stays strong
Dentsu and its digital partners also publish a detailed breakdown of internet advertising media spend (媒体費) and a forecast for 2026. In the official detailed analysis 2025年 日本の広告費 インターネット広告媒体費 詳細分析 (Dentsu), they state:
- 2025 internet advertising media spend: ¥3.3093 trillion
- 2026 forecast: ¥3.584 trillion (108.3% YoY)
- 2025 video advertising: ¥1.0275 trillion (first time exceeding ¥1T; 121.8% YoY)
- 2026 forecast video advertising: ¥1.1783 trillion (114.7% YoY)
These aren’t vague “industry expectations.” They are specific estimates and forecasts coming from the group that publishes Japan’s most referenced ad spend benchmark.
If you prefer an English summary of the same forecast numbers, Dentsu-Ho’s write-up also highlights them here: 2025 Japan Advertising Expenditures Analysis (dentsu-ho).
Translation for foreign founders: Japan is still expanding its digital base, and the biggest growth engine inside digital is video (and the platforms delivering video).
2) The headline $64B+ number (and why definitions matter)
You mentioned the “$64B+ by 2026” benchmark. You can use that in a strategic narrative—just do it carefully.
Some market research forecasts put Japan’s digital ad spend market at US$64.88B in 2026, with strong annual growth. A public listing showing that figure is available here: Japan Digital Ad Spend Market Size & Forecast (Research and Markets).
Important nuance: “digital ad spend” definitions vary across research providers (what’s included—media, production, retail platform fees, influencer spending, etc.). That’s why the safest approach is to use both:
- Dentsu’s Japan-standard breakdown in yen, and
- the broader market-research forecast as a directional “global investor” view.
Practical takeaway: No matter which definition you use, the story is consistent: Japan’s digital market remains large, and its growth is being pulled by video, social, and commerce environments.
3) What’s driving growth: mobile + video + “content-like” ad formats
Dentsu’s detailed analysis makes the key driver obvious: video is compounding and now represents a huge share of internet media spend. In the same internet media detailed analysis, they also highlight strong growth in social advertising (with video-sharing environments increasing in share).
But it’s not only a “consumer preference” story. It’s also a platform inventory expansion story.
A concrete example: in February 2026, LY Corporation announced it expanded Yahoo! Ads Display (Auction) in-stream ads to all advertisers, citing demand for video ads delivered naturally within content and expanded viewing across devices including connected TV. That official announcement is here: Yahoo!広告、ディスプレイ広告（運用型）インストリーム広告を全広告主向けに提供開始 (LY Corp).
That single change tells you a lot about where Japan is going:
- more in-stream inventory becomes accessible,
- more advertisers can test video at scale,
- and video becomes easier to buy like performance media—not only “big brand reserved buys.”
For foreign brands: you don’t just “make one hero video.” You build a repeatable short-form system:
- proof-first hooks,
- subtitle-first edits,
- calm trust tone (Japan punishes “fake hype” fast),
- and multiple variants for different audience segments.
4) Local platforms are becoming more strategic in 2026, not less
Japan is unusual compared to many Western markets because local ecosystems still matter at scale. In 2026, that local story is getting even bigger due to consolidation.
LY Corporation officially announced the start date for 「LINEヤフー広告 ディスプレイ広告」 as April 1, 2026, and also noted that LINE Ads will stop ad delivery around late October 2026 with a phased shutdown afterward. That announcement is here: LINEヤフー広告 ディスプレイ広告 提供開始日決定 (LY for Business).
And the English-language notice that frames this as a platform integration (and renaming Yahoo! JAPAN Ads to “LY Ads”) is here: [Important] Integration of ad platforms (Yahoo! JAPAN Ads / LY).
This matters because consolidation usually leads to:
- improved operational efficiency,
- more unified data learning,
- and easier cross-inventory planning.
For foreign founders: if your Japan plan is only Google + Meta, you’re often missing a local reach and retargeting lever that behaves differently than Western display ecosystems.
5) Retail media and marketplaces are increasingly part of “performance” in Japan
Digital ad growth in Japan is also linked to commerce and retail behavior.
Japan’s e-commerce base is still expanding. METI reports Japan’s domestic B2C e-commerce market reached ¥26.1 trillion in 2024 (+5.1% YoY). That official release is here: Results of FY2024 E-Commerce Market Survey (METI).
Now combine that with “ads inside commerce environments.”
For example, Mercari officially launched its marketplace ad business “Mercari Ads” in early 2025, making Mercari more than a resale app—it’s also a retail media environment. Here’s the official announcement: 「メルカリ」内での広告事業「メルカリAds」を本格開始 (Mercari).
And Rakuten is pushing creator-to-commerce loops as well. In February 2026, Rakuten announced a partnership with Google to enable shopping experiences via YouTube, linked to YouTube Shopping affiliate functionality. See: Rakuten Ichiba partners with Google via YouTube (Rakuten press release) and YouTube Japan’s own announcement here: YouTube ショッピング アフィリエイト プログラムを日本導入（楽天市場が国内初のパートナー）.
For marketers: retail media is becoming a fourth pillar alongside:
- Search (intent capture),
- Social (discovery + retarget),
- Video (trust),
- and Marketplace media (purchase-ready environments).
6) Why founders should invest early (and what “early” means in Japan)
When a market is growing fast, the advantage goes to teams who start early—not because they “spend more,” but because they learn faster.
In Japan, learning compounds across four things:
A) Localization learning
Japan is not a “translate the ad” market. The best ad often wins because it:
- reduces perceived risk,
- feels calm and confident,
- shows proof before claims,
- and matches local user behavior (subtitles, product demo, clarity).
B) Creative iteration velocity
Video/social growth means you need an engine that can produce:
- multiple hooks,
- multiple edits,
- and multiple audience-specific angles.
C) Data foundation inside local ecosystems
As LY consolidates, having clean tracking, naming conventions, and audience governance before April 2026 is a real advantage (and avoids migration chaos). See the April 1 timing again in LY for Business.
D) Commerce readiness
If you sell products, you should treat your listing pages like landing pages:
- images,
- reviews,
- FAQs,
- shipping clarity,
- and return comfort.
Retail media doesn’t fix weak conversion pages. It just sends more people to them.
7) A practical 2026 “modern funnel” for foreign brands in Japan
If you want a simple model that fits how Japan is evolving:
Search (capture) → Video (trust) → Marketplace / product page (convert) → Retargeting (recover)
- Search: capture decision-ready demand
- Video: build confidence (YouTube/TikTok/IG + in-stream expansion environments)
- Commerce: convert inside Rakuten/Mercari/Amazon or a strong D2C experience
- Retargeting: win the second and third touch (Japan often requires more trust touchpoints)
This is why “digital is growing” is not just a budget note. It’s a funnel redesign note.
FAQ (place this before your Conclusion)
Is Japan’s digital ad growth mostly search or mostly video?
Both matter, but Dentsu’s detailed analysis shows video is a major growth engine, with video advertising exceeding ¥1 trillion in 2025 and forecast to continue double-digit growth in 2026. See: Dentsu internet media detailed analysis.
What’s the most Japan-specific platform change in 2026?
The LY integration: LINEヤフー広告 ディスプレイ広告 starts April 1, 2026, and LINE Ads will phase out later in 2026. See: LY for Business announcement.
Does this matter for B2B too, or only consumer brands?
It matters for both. Japan’s digital growth is platform-wide: search intent capture, video proof, and retargeting flows work for B2B—especially if you lead with credibility and case-style proof.
What’s the quickest “first step” for foreign founders?
Start with a 60-day learning plan: one high-intent Search campaign, one proof-based video angle, clean conversion tracking, and one retargeting loop. Then scale only the winners.
Conclusion
Japan’s digital ad market is still growing fast—driven by video, social, expanding in-stream inventory, strengthening local ecosystems, and the rise of retail media.
For foreign brands, the opportunity is huge—but the winners will be the ones who invest early in:
- Japan-native localization,
- fast creative iteration,
- clean measurement,
- and funnels built for Japanese trust behavior.
At Krows Digital, we help foreign brands build Japan-first acquisition systems across Google, Meta, TikTok/YouTube, LINE/Yahoo ecosystems, and marketplace-aware performance strategies—so your budget buys learning and growth, not just impressions.
