“Forbidden” Survey of 1,000 Advertisers
We conducted the “Survey on the Realities of Commissioning Advertising Agencies” among 1,098 company employees, business owners, and public servants who have been involved, as part of their jobs, in commissioning advertising agencies or outsourcing work to them. The survey quantifies the realities of commissioning from the advertiser’s side across 5 areas: quoted prices, awareness of margin rates, the number of companies between commissioning and the final implementer, trust in reports, and the sense that AI could replace agency work.
The findings of this survey are also aimed at us, since we ourselves run an advertising agency business.
As a member of the industry, we went ahead with this survey partly as a warning to ourselves.
92.3%
Share of advertisers who feel advertising agencies’ quoted prices are “high”
71.8%
Share of advertisers who have felt “AI would be enough” for a report or proposal
92.3%
Share of advertisers who feel advertising agencies’ quoted prices are “high” (total of “Very high” 36.5% and “Somewhat high” 55.7%)
30.3%
Share of advertisers who “know precisely” the actual margin rate of their contracted agency. 26.3% “know precisely” the fair market rate and benchmarks
71.9%
Share of advertisers who believe their high-value projects pass through “2 or more companies.” Even “3 or more companies” stands at 35.0%
78.0%
Share of advertisers who have felt a “gap” between advertising agencies’ reports and their own sense of results
64.5 points
Overall rating of the main advertising agency respondents most recently contracted with (average on a 100-point scale). 72.1% of advertisers “feel” there are issues or concerns about commissioning agencies
71.8%
Share of advertisers who have felt “AI would be enough” for a report or proposal. Among business unit and division heads: 86.5%
8,062.3 billion yen
Internet advertising expenditures reached 4,045.9 billion yen, exceeding half (50.2%) of total advertising expenditures for the first time. Of this, internet advertising media expenditures were 3,309.3 billion yen, and programmatic advertising was 2,935.2 billion yen (112.5% of the previous year). Much of advertising spending passes through “campaign management,” a process that is hard to see from the outside.
Dentsu Inc. “2025 Advertising Expenditures in Japan.” Dentsu website. 2026-03-05, https://www.dentsu.co.jp/news/release/2026/0305-011003.html, (accessed 2026-10-14).
CARTA HOLDINGS, INC.; Dentsu Inc.; Dentsu Digital Inc.; Septeni Co., Ltd. “2025 Advertising Expenditures in Japan: Detailed Analysis of Internet Advertising Media Expenditures.” Dentsu website. 2026-03-05, https://www.dentsu.co.jp/news/release/2026/0305-011004.html, (accessed 2026-10-14).
71 cases
On June 29, 2026, the Japan Fair Trade Commission and the Small and Medium Enterprise Agency announced that they had conducted an intensive investigation into transactions between advertising businesses and advertising production businesses, and had issued guidance to advertising businesses in 71 cases. Further upstream, between advertisers and advertising agencies, there is almost no quantitative data showing how much of the cost breakdown and execution structure is visible.
Japan Fair Trade Commission, Small and Medium Enterprise Agency. “Results of the Intensive Investigation into Suspected Violations of the Act on Proper Transactions with Small and Medium-Sized Entrusted Business Operators in the Advertising Industry.” Japan Fair Trade Commission. 2026-06-29, https://www.jftc.go.jp/houdou/pressrelease/2026/jun/260629_koukoku.html, (accessed 2026-10-14).
34.5%
The share of companies using generative AI in their work has reached 34.5% (total of “use it extensively” 4.4% and “use it to some extent” 30.2%). Now that advertisers can use AI themselves, the question is how the value of the analysis and proposals that advertising agencies provide should change.
Teikoku Databank, Ltd. “Survey of Corporate Trends Regarding Generative AI (March 2026).” Teikoku Databank. 2026-05-14, https://www.tdb.co.jp/report/economic/20260514-genai/, (accessed 2026-10-14).
The findings of this survey are also aimed at us, since we ourselves run an advertising agency business.
As a member of the industry, we went ahead with this survey partly as a warning to ourselves.
Regarding the prices quoted by advertising agencies, 36.5% answered “Very high” and 55.7% “Somewhat high,” for a total of 92.3% answering “high.” Only 7.0% answered “Reasonable.”
We asked respondents how well they know the actual margin rate of their contracted agency (the fee rate added on top of media and production costs) and the fair market rate and benchmarks for it.
| Actual margin rate | Fair market rate and benchmarks | |
|---|---|---|
| Know precisely | 30.3% | 26.3% |
| Know roughly | 48.0% | 46.8% |
| Have heard of it, but don’t know precisely | 16.1% | 19.7% |
| Don’t know at all | 5.6% | 7.2% |
26.3%
Share of advertisers who “know precisely” the fair market rate and benchmarks. This is lower than the 30.3% who know precisely the fee rate their own company pays
For high-value projects, we asked how many companies respondents believe the work passes through, from the commissioning company to the final implementer.
We also asked how well respondents know the final implementers who do the hands-on work (production companies, campaign management firms, freelancers, etc.).
33.6%
Share of advertisers who do not fully know their final implementers (total of “Know for only some projects,” “Hardly know,” and “Don’t know at all”). That is 1 in 3
The most common concern about work passing through multiple companies was “Intermediary margins likely add extra costs.”
In total, 78.0% have felt that the figures in reports and results updates submitted by advertising agencies did not match their own sense of results.
We asked respondents (n=1,059), excluding those who answered “Never” to feeling a gap, what the gap involved.
In total, 71.8% have felt that “AI would be enough” for an advertising agency’s report or proposal.
We compared the areas of work that respondents currently outsource with the areas where they think using AI could reduce outsourcing. The top areas are almost the same: the very areas being outsourced now are seen as replaceable by AI.
| Currently outsource | Think AI could reduce | |
|---|---|---|
| Data aggregation and visualization (organizing figures, creating charts, etc.) | 24.0% | 30.0% |
| Performance analysis and insights (interpretation and improvement proposals) | 24.9% | 27.4% |
| Presentation design and materials creation | 23.5% | 27.1% |
| Marketing and business strategy planning | 24.0% | 23.3% |
| Reporting and preparation of regular reports, etc. | 21.9% | 22.4% |
| Creative production | 24.7% | 21.8% |
| Media planning and ad placement management | 23.2% | 20.7% |
| Market and competitor research | 23.1% | 20.0% |
| Don’t know | 8.7% | 11.7% |
64.5 points
Overall rating of the main advertising agency respondents most recently contracted with (average on a 100-point scale, n=1,098)
In total, 72.1% of advertisers feel there are issues or concerns regarding cost opacity, whether margin rates are appropriate, multi-tier subcontracting structures, the reliability of reports, and so on.
Looking at respondents by position, business unit and division heads had the highest rates both of feeling “AI would be enough” and of feeling a gap in reports. Business owners and executives, by contrast, had the lowest rates on both.
| Position | Respondents | Have felt “AI would be enough” | Have felt a gap in reports |
|---|---|---|---|
| Business unit and division heads | 133 | 86.5% | 89.5% |
| Department and section managers | 303 | 76.2% | 82.2% |
| Team leaders and supervisors | 165 | 70.3% | 84.8% |
| Staff (no title) | 273 | 69.2% | 72.5% |
| Business owners and executives | 224 | 61.2% | 67.0% |
| All respondents | 1,098 | 71.8% | 78.0% |
What this survey revealed was not so much dissatisfaction with the amounts themselves as anxiety about “not being able to see how much is spent on what, or who is doing the work.” We believe that being able to explain cost breakdowns and execution structures, including their causal link to results, is what will be required of agencies going forward.
The fact that more than 70% have felt “AI would be enough” should be read not as a rejection of the very existence of agencies, but as a decline in the value of task-oriented work such as data aggregation and materials creation. Now that advertisers can use AI in-house, the value agencies should create lies in the judgment behind the numbers and in planning that leads to sales.
We take this survey as a warning to ourselves. We will continue to rigorously ensure that we disclose cost breakdowns and execution structures to advertisers and that we can explain the causal link between our work and its results. We also believe that putting in place ways for advertisers to check things for themselves, rather than “leaving everything” to the agencies they commission, will help restore trust across the industry.
*Percentages are rounded to 1 decimal place (the 2nd decimal place is rounded off), so totals may not add up to 100%. For multiple-answer questions, totals exceed 100%.
When quoting or reproducing the content of this survey, please credit the source as “Knowns Consumer Research” or “Survey by Knowns Inc.” If you use it in web media, please place a link to the URL of this page as the source. Please refrain from altering the data.
