Japanese Companies Adapt to AI Advertising Revolution

Sep 15, 2025 | News On Japan

TOKYO - CyberAgent, Japan’s largest internet advertising agency, reported year-on-year declines in both revenue and profit in its third-quarter results for the fiscal year ending September 2025, announced in August. A revenue drop is unusual for the advertising business and underscores a turning point for the company.

Management is banking on an ‘AI-first’ approach, shifting from designer intuition to production guided by advanced AI analysis tools.

Behind the weakness is a growing move by major clients to bring ad operations in-house. The trend is accelerating globally as leading platforms such as Google and Meta strengthen AI-powered ad tools that make internal execution easier.

Competition in internet advertising has intensified. Dentsu Group’s internet ad revenue rose 14.3% year on year to 459.0 billion yen last year, putting it ahead of CyberAgent in the domestic market. Dentsu’s strength lies in proposals that integrate online and offline placements, as more advertisers run TV commercials alongside internet video ads on services such as YouTube and subscription streamers.

To regain momentum, CyberAgent is pushing ‘AI first’ in creative production. Monoclam, the unit that produces most of the company’s web ads, uses an in-house AI tool that predicts performance before delivery. Product image ads are split into layers—such as composition and background—and the AI scores multiple candidates, selecting high-scoring elements at each layer. The final ad combines the top-scoring parts.

This method focuses on measurable effectiveness rather than locking down a final look with the client at the outset. By optimizing for quick iteration, output per designer has jumped from about 30 pieces a month to roughly 220.

The approach now extends to video. At the Kiwami AI Odaiba Studio, opened in 2023, large screens and AI-generated backgrounds enable rapid shooting. After each cut, the system predicts performance versus currently running ads; if a score is low, the team adjusts backgrounds or camera work on the spot and stitches together only the high-scoring cuts for the finished spot.

Whether AI can consistently lift results remains the key question, but CyberAgent is wagering that speed, scale, and data-driven creative will be central to winning back advertisers.

Source: テレ東BIZ

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