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Dentsu: Advertising Expenditures in Japan Totaled 5,976.2 Billion Yen in 2013, Up 1.4% from 2012

Dentsu Inc. (TOKYO:4324) (ISIN:JP3551520004) (President & CEO: Tadashi Ishii; Head Office: Tokyo; Capital: 74,609.81 million yen) released today its annual report of advertising expenditures in Japan for the 2013 calendar year, including an estimated breakdown by medium and industry.

According to this report, Japan’s advertising expenditures in 2013 totaled 5,976.2 billion yen, an increase of 1.4% over the previous year. Overall spending on advertising posted year-on-year gains for a second straight year thanks to the sustained economic recovery brought about by “Abenomics,” and a late surge in demand ahead of the consumption tax increase scheduled to take effect in April 2014.

Overview of Advertising Expenditures during 2013

  1. Advertising expenditures held firm in 2013 as a result of the sustained economic recovery achieved by “Abenomics,” and a strong surge in demand during the second half of the year which was related to the consumption tax increase scheduled to take effect in April 2014. The first half of 2013 saw higher sales of expensive goods, reflecting an improvement in Japan’s economy, but this recovery was not strong enough to boost overall spending on advertising. Expenditures for the year totaled 5,976.2 billion yen, a gain of 1.4% over the previous year, and spending was up for the second year in a row.
  2. Broken down by medium, expenditures were modestly higher in Television (up 0.9%), fell slightly in Newspapers (down 1.2%) and Magazines (down 2.0%), and held steady in Radio (down 0.2%). As a result, overall spending in the traditional media rose 0.1%. Advertising in Promotional Media grew by the same amount (up 0.1%), exceeding previous-year levels for a second straight year. Satellite Media-Related spending has taken firm root, and spending in this component remained quite strong (up 9.6%), along with Internet advertising (up 8.1%), which saw robust growth in demand for performance-based advertising.
  3. By industry category (for the traditional media), expenditures were higher in 8 of the 21 industry categories, including Finance/Insurance (up 15.6% due to strong growth in advertising for direct-marketed insurance products and the Nippon Individual Savings Account (NISA) program); Food Services/Other Services (up 10.3%, helped by growth in placements for legal services); Real Estate/Housing Facilities (up 5.8% on placements for residential housing); Household Products (up 5.5%, boosted by increased spending on ads for beds); and Education/Medical Services/Religion (up 3.1% on ads for preparatory and tutoring schools, hospitals and medical services).
         By contrast, expenditures fell in 13 of the 21 industry categories, including Hobbies/Sporting Goods (down 5.8%, hurt by a fall in placements for audio software, dolls and toys); Government/Organizations (down 5.4% on lower demand from political parties and political organizations); Energy/Materials/Machinery (down 5.1% on cutbacks by electric power and gas companies); and Distribution/Retailing (down 5.0% on reductions in spending by large, high volume retail stores).

• Outline of Advertising Expenditures by Medium
Advertising expenditures in the traditional media totaled 2,782.5 billion yen, up 0.1% compared with the previous year. Spending in Television posted a modest gain (up 0.9%). Promotional Media advertising was also up 0.1%. Spending remained strong in both Satellite Media-Related (up 9.6%), and Internet advertising (up 8.1% year on year).

• Quarterly Breakdown of Growth in Advertising Expenditures in the Traditional Media in 2013
A quarterly breakdown of advertising expenditures for the traditional media in the 2013 calendar year showed that spending trended lower during the first six months, but recovered during the second half of the year.

 

(Year-on-year, %)

   

2013
(Full
Year)

  Jan.–
Jun.
  Jul.–
Dec.
  Jan.–
Mar.
  Apr.–
Jun.
  Jul.–
Sep.
  Oct.–
Dec.

Advertising
Expenditures in the
Traditional Media

  100.1   98.8   101.4   98.5   99.2   101.9   100.9
 

• Outline of Advertising Expenditures by Industry (21 Categories, Traditional Media Only)
Advertising expenditures increased in 8 of the 21 industry categories surveyed during 2013, and declined in 13 categories.

Two industry categories posted double-digit gains: Finance/Insurance (up 15.6%) on expenditures related to direct-marketed insurance products and the Nippon Individual Savings Account (NISA) program, and Food Services/Other Services (up 10.3%), which saw firm growth in placements for legal services as well as for ladies’ wigs. Expenditures also rose for Real Estate/Housing Facilities (up 5.8%) due to strong demand related to residential housing and house exhibition sites; Household Products (up 5.5%) on increased placements for beds and deodorizers; Education/Medical Services/Religion (up 3.1%) on spending on ads for preparatory and tutoring schools, hospitals and medical services, and language schools; and Automobiles/Related Products (up 1.4%) on increased placements for K-cars (engine displacement up to 660 cc), sedans and SUVs.

By contrast, expenditures fell in 13 of the 21 industry categories, including Hobbies/Sporting Goods (down 5.8%), hurt by cutbacks in advertising for audio software, dolls and toys; Government/Organizations (down 5.4%) as a result of reduced spending by political parties and political organizations; Energy/Materials/Machinery (down 5.1%) on fewer placements by electric power and gas companies; Distribution/Retailing (down 5.0%) on lower demand from large-scale general merchandise stores; and Foodstuffs (down 4.0%), where expenditures fell in the areas of health foods and beauty-related food products.

The full text of 2013 Advertising Expenditures in Japan is currently being compiled and will be available on Dentsu’s website at the end of March 2014. For reference, please refer to the tables on the following pages.

 

TABLE 1

Japan’s GDP and Advertising Expenditures (2009−2013)

Year   Gross Domestic Product (B)   Advertising Expenditures (A)  

A / B
(%)

GDP
(¥ billion)

 

Compared
to Previous
Year (%)

Advertising
Expenditures
(¥ billion)

 

Compared
to Previous
Year (%)

2009 471,138.7 94.0 5,922.2 88.5 1.26
2010 482,384.4 102.4 5,842.7 98.7 1.21
2011 471,310.8 97.7 5,709.6 97.7 1.21
2012 473,777.1 100.5 5,891.3 103.2 1.24
2013   478,447.7   101.0   5,976.2   101.4   1.25

Notes:
• The above figures for GDP are those released in the Cabinet Office’s ‘Annual Report on National Accounts’ and ‘GDP Estimates’.
• All the above figures are for the calendar year.

 

TABLE 2

Advertising Expenditures by Medium (2011−2013)

Media  

Advertising Expenditures
(¥ billion)

 

YoY Comparison
Ratio (%)

 

Component Ratio
(%)

2011   2012   2013 2012   2013 2011   2012   2013
Traditional Media
Newspapers 599.0 624.2 617.0 104.2 98.8 10.5 10.6 10.3
Magazines 254.2 255.1 249.9 100.4 98.0 4.4 4.3 4.2
Radio 124.7 124.6 124.3 99.9 99.8 2.2 2.1 2.1
Television 1,723.7 1,775.7 1,791.3 103.0 100.9 30.2 30.2 30.0
Subtotal 2,701.6 2,779.6 2,782.5 102.9 100.1 47.3 47.2 46.6
Satellite Media-Related 89.1 101.3 111.0 113.7 109.6 1.6 1.7 1.8
Internet
(Advertising placement) 618.9 662.9 720.3 107.1 108.7 10.8 11.2 12.1
(Advertising production) 187.3 205.1 217.8 109.5 106.2 3.3 3.5 3.6
Subtotal 806.2 868.0 938.1 107.7 108.1 14.1 14.7 15.7
Promotional Media
Outdoor 288.5 299.5 307.1 103.8 102.5 5.1 5.1 5.1
Transit 190.0 197.5 200.4 103.9 101.5 3.3 3.4 3.4
Flyers 506.1 516.5 510.3 102.1 98.8 8.9 8.8 8.5
Direct Mail 391.0 396.0 389.3 101.3 98.3 6.8 6.7 6.5
Free Newspapers /

Free Magazines

255.0

236.7

228.9

92.8

96.7

4.5

4.0

3.8

POP 183.2 184.2 195.3 100.5 106.0 3.2 3.1 3.3
Telephone Directories 58.3 51.4 45.3 88.2 88.1 1.0 0.9 0.8
Exhibitions /

Screen Displays

240.6

260.6

268.0

108.3

102.8

4.2

4.4

4.5

Subtotal 2,112.7   2,142.4   2,144.6 101.4   100.1 37.0   36.4   35.9
Total   5,709.6   5,891.3   5,976.2   103.2   101.4   100.0   100.0   100.0
 

TABLE 3

Advertising Expenditures by Industry in the Traditional Media (2012−2013)

(Unit: ¥10 million)

  Media    Newspapers   Magazines   Radio   Television   Total
Industry 2012   2013  

Comparison
Ratio
(%)

2012   2013  

Comparison
Ratio
(%)

2012   2013  

Comparison
Ratio
(%)

2012   2013  

Comparison
Ratio
(%)

2012   2013  

Comparison
Ratio
(%)

Energy / Materials /

Machinery

640 628 98.1 126 126 100.0 283 274 96.8 1,575 1,462 92.8 2,624 2,490 94.9
 

Foodstuffs

5,561 5,528 99.4 1,553 1,410 90.8 1,163 999 85.9 20,052 19,272 96.1 28,329 27,209 96.0
 

Beverages / Cigarettes

2,344 2,099 89.5 1,386 1,380 99.6 532 514 96.6 16,725 16,695 99.8 20,987 20,688 98.6
 

Pharmaceuticals /

Medical Supplies

1,700 1,694 99.6 836 743 88.9 1,039 1,078 103.8 11,272 11,230 99.6 14,847 14,745 99.3
 

Cosmetics / Toiletries

3,130 3,450 110.2 3,353 3,071 91.6 411 452 110.0 21,889 21,012 96.0 28,783 27,985 97.2
 
Apparel / Fashion,
Accessories / Personal Items
1,675 1,627 97.1 6,483 6,568 101.3 66 65 98.5 3,421 3,472 101.5 11,645 11,732 100.7
 
Precision Instruments /

Office Supplies

530 600 113.2 914 915 100.1 52 55 105.8 1,390 1,264 90.9 2,886 2,834 98.2
 
Home Electric
Appliances /

AV Equipment

687 608 88.5 646 685 106.0 163 152 93.3 3,916 4,088 104.4 5,412 5,533 102.2
 
Automobiles / Related Products 1,444 1,662 115.1 866 849 98.0 852 933 109.5 13,311 13,266 99.7 16,473 16,710 101.4
 

Household Products

1,149 1,163 101.2 471 555 117.8 183 202 110.4 4,693 4,936 105.2 6,496 6,856 105.5
 

Hobbies / Sporting Goods

1,279 1,174 91.8 1,486 1,420 95.6 314 274 87.3 7,774 7,359 94.7 10,853 10,227 94.2
 

Real Estate / Housing Facilities

2,917 2,846 97.6 749 802 107.1 502 587 116.9 6,701 7,268 108.5 10,869 11,503 105.8
 

Publications

5,702 5,647 99.0 297 300 101.0 606 664 109.6 2,611 2,377 91.0 9,216 8,988 97.5
 

Information /
Communications

3,903 3,570 91.5 1,346 1,096 81.4 847 725 85.6 18,429 18,941 102.8 24,525 24,332 99.2
 

Distribution / Retailing

7,563 7,439 98.4 996 946 95.0 876 877 100.1 10,862 10,011 92.2 20,297 19,273 95.0
 

Finance / Insurance

2,105 2,304 109.5 600 630 105.0 937 934 99.7 10,857 12,894 118.8 14,499 16,762 115.6
 

Transportation /

Leisure

10,219 9,991 97.8 1,491 1,647 110.5 1,023 980 95.8 8,390 8,358 99.6 21,123 20,976 99.3
 
Food Services / Other Services 1,942 2,125 109.4 625 599 95.8 1,261 1,335 105.9 9,068 10,170 112.2 12,896 14,229 110.3
 

Government /
Organizations

1,450 1,327 91.5 212 229 108.0 882 849 96.3 783 744 95.0 3,327 3,149 94.6
 
Education / Medical
Services / Religion
2,891 2,820 97.5 1,022 965 94.4 445 439 98.7 3,465 3,845 111.0 7,823 8,069 103.1
 

Classified Ads / Others

 

3,589

 

 

3,398

 

 

94.7

 

52

 

 

54

 

 

103.8

 

23

 

 

42

 

 

182.6

 

386

 

 

466

 

 

120.7

 

4,050

 

 

3,960

 

 

97.8

Total   62,420   61,700   98.8   25,510   24,990   98.0   12,460   12,430   99.8   177,570   179,130   100.9   277,960   278,250   100.1
 
TABLE 4

Sources of Media Expenditures

 

Traditional Media: Advertising expenditures spent in the traditional media of newspapers, magazines, radio and television.

Newspapers: Advertising rates of national daily and trade newspapers, and advertising production costs.

Magazines: Advertising rates of national monthly, weekly and specialized magazines, and advertising production costs.

Radio: Time rates and production costs of private broadcasting stations nationwide and commercial production costs (but not including event-related costs).

Television: Time rates and production costs of private broadcasting stations nationwide and commercial production costs (but not including event-related costs).

 

Satellite Media-Related: Advertising expenditures for satellite broadcasts, CATV and teletext (placement and production costs).

 

Internet: Placement (includes mobile advertising) and production costs (includes production costs for banner ads as well as website set-up costs related to products, services and ad campaigns) for Internet sites.

 

Promotional Media: Advertising expenditures for sales promotion-related media.

Outdoor: Production and placement costs for billboards, neon signs, outdoor video screens, etc.

Transit: Placement costs for transit advertisements.

Flyers: Insertion costs for flyers in newspapers nationwide.

Direct Mail: Postage and private delivery costs spent on direct mail.

Free Newspapers/Free Magazines: Advertising costs in free newspapers and magazines.

POP: Production costs for point-of-purchase (POP) displays.

Telephone Directories: Placement costs for advertisements in telephone directories.

Exhibitions/Screen Displays: Production costs for exhibitions, expositions and PR centers; production and screening costs for promotional films and videos, etc.

 

About the Dentsu Group
Dentsu is the world’s largest advertising agency brand. Led by Dentsu Inc. (TOKYO:4324) (ISIN:JP3551520004), a company with a history of 112 years of innovation, the Dentsu Group provides a comprehensive range of client-centric brand, integrated communications, media and digital services through its seven global network brands—Carat, Dentsu, Dentsu media, iProspect, Isobar, Posterscope and Vizeum—as well as through its specialist brands including 360i, Amnet, Amplifi, Data2Decisions, mcgarrybowen, Mitchell Communications (PR) and psLive.

The Dentsu Group has a strong presence in 110 countries across five continents, and employs more than 37,000 dedicated professionals. Dentsu Aegis Network Ltd., its global business headquarters in London, oversees Dentsu’s agency operations outside of Japan. The Group is also active in the production and marketing of sports and entertainment content on a global scale.
www.dentsu.com

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