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Twitter’s Rise in Japan Looks Unstoppable

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Twitter boasts 63% social media penetration in Japan

Twitter (TWTR) is the most popular foreign social network service in Japan. It hosted an estimated 63.3% of all Japanese social network users in 2018, according to eMarketer estimates. That puts it ahead of Facebook (FB) with 39.3% social network penetration in Japan and Instagram with 38.1% penetration. Facebook owns Instagram alongside other social apps such as WhatsApp and Messenger.

Twitter is converting its popularity in Japan into profits. In the fourth quarter, which ended in December, the company generated $138 million in revenue in Japan, representing an increase of 30% YoY. Japan contributed more than 15% of Twitter’s revenue in the quarter. During an investor briefing early this month where Twitter reported its results for the December quarter, chief executive Jack Dorsey stated that video ads are resonating well with advertisers in Japan. Video is Twitter’s most popular advertising format, accounting for over half of the company’s total ad revenue.

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Over $12 billion spent on digital ads in Japan

Japan is one of the more promising international markets for digital advertising companies. Digital ad spending hit $12.4 billion in Japan in 2018, according to eMarketer estimates. And that looks like just the tip of the iceberg as digital spending currently makes up just a third of Japan’s media advertising market.

But Twitter is not alone in the pursuit of digital advertising opportunities in Japan. In addition to Facebook and Google, which also have a substantial presence in Japan, Twitter is also up against local services such as Line. Amazon (AMZN) is also expanding in Japan, and introduced its Amazon Pay service in the country last year. Amazon has been showing strong interest in digital advertising dollars. Last year it overtook Microsoft (MSFT) and Verizon (VZ) to become the third-largest digital advertising platform in the United States, according to eMarketer.

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