CORRECTING and REPLACING Dentsu: Advertising Expenditures in Japan Totaled 6,152.2 Billion Yen in 2014, Up 2.9% from 2013

—Total Expenditures Surpassed 6,000 Billion Yen for the First Time in Six Years,
Internet Advertising Topped 1,000 Billion Yen for the First Time Ever,
Spending Rose in 14 of 21 Industry Categories—

CORRECTION...by Dentsu Inc.

TOKYO--()--First sentence of subhead and last sentence of third paragraph of release should read: …first time in six years… (instead of first time in seven years)

The corrected release reads:

DENTSU: ADVERTISING EXPENDITURES IN JAPAN TOTALED 6,152.2 BILLION YEN IN 2014, UP 2.9% FROM 2013

—Total Expenditures Surpassed 6,000 Billion Yen for the First Time in Six Years,
Internet Advertising Topped 1,000 Billion Yen for the First Time Ever,
Spending Rose in 14 of 21 Industry Categories—

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 2014 calendar year, including an estimated breakdown by medium and industry.

According to this report, Japan’s advertising expenditures in 2014 totaled 6,152.2 billion yen, an increase of 2.9% over the previous year. Despite the effects of an increase in the consumption tax, overall spending on advertising posted year-on-year gains for a third straight year.

Overview of Advertising Expenditures during 2014

  1. Advertising expenditures in 2014 were boosted by last-minute demand before the consumption tax increase in April and by spending related to the Sochi 2014 Olympic Games. Expenditures fell in response to the tax increase, but still maintained modest growth, thanks in part to the 2014 FIFA World Cup Brazil™. Expenditures for the year totaled 6,152.2 billion yen, marking the first time in six years that Japan’s advertising market had surpassed the 6,000 billion yen level.
  2. Broken down by medium, expenditures fell slightly in Newspapers (down 1.8%) and were unchanged in Magazines, but rose in Radio (up 2.3%) and Television* (up 2.8%; including both Terrestrial Television and Satellite Media-Related spending). As a result, overall spending in the traditional media posted a gain of 1.6%. The Internet advertising market (up 12.1%) reached the 1,000 billion yen level for the first time ever, driven by growth in smartphone and video ads, and ads using new advertising technologies. Moreover, Promotional Media (up 0.8%) also contributed to overall growth, expanding for the third year in a row.
    * Starting in 2014, the Television category has been revised to include spending on both Terrestrial Television and Satellite Media-Related advertising.
  3. By industry category (for the traditional media, but excluding Satellite Media-Related spending), year-on-year spending rose in 14 of the 21 industry categories, and fell in 7 categories.
    Major categories posting gains included Information/Communications (up 7.2% on increased placements related to satellite broadcasts, mobile phone rates and services, and smartphone-related services); Home Electric Appliances/AV Equipment (up 7.1% on growth in ads for electric vacuum cleaners, refrigerators and LCD televisions); Cosmetics/Toiletries (up 5.6% on placements related to shampoos and conditioners, and direct-marketed cosmetic lines for women); Automobiles/Related Products (up 3.4% on a rise in ads for wagons and imported SUVs); and Beverages/Cigarettes (up 2.0% on growth in advertising for domestic beer and happo-shu (low-malt beers)).
    Expenditures fell in 7 of the 21 industry categories, including Hobbies/Sporting Goods (down 7.9% on weak demand for game and audio software ads); Education/Medical Services/Religion (down 4.4% on cutbacks in ads for vocational and other educational institutions, and correspondence education); Foodstuffs (down 3.2% on lowered spending in the areas of health foods, instant noodles and snack foods); Apparel/Fashion, Accessories/Personal Items (down 3.0% on reduced placements for women’s clothing, and men’s and women’s shoes).

Outline of Advertising Expenditures by Medium
Advertising expenditures in the traditional media (including Satellite Media-Related spending) in the 2014 calendar year totaled 2,939.3 billion yen, up 1.6% from the previous year. Spending in Television (including both Terrestrial Television and Satellite Media-Related advertising) grew 2.8%.
Spending on Internet advertising reached 1,051.9 billion yen (up 12.1%) and held firm throughout the year. Promotional Media also posted gains for a third straight year, up 0.8% to 2,161 billion yen.

Quarterly Breakdown of Growth in Advertising Expenditures in the Traditional Media in 2014
A quarterly breakdown of advertising expenditures in the traditional media (including Satellite Media-Related spending) showed that growth rates were rather weak from April onward, but spending nevertheless remained positive throughout 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
(including Satellite
Media-Related
Spending)

100.4   99.2   101.7   98.7   99.6   102.2   101.3

2014
(Full
Year)

Jan.–
Jun.
Jul.–
Dec.
Jan.–
Mar.
Apr.–
Jun.
Jul.–
Sep.
Oct.–
Dec.
  101.6   102.3   100.8   104.0   100.6   100.6   101.1
 

Outline of Advertising Expenditures by Industry (21 Categories, Traditional Media Only, Excluding Satellite Media-Related Spending)
Advertising expenditures increased in 14 of the 21 industry categories surveyed during 2014, and declined in 7 categories. (Expenditures were higher in 8 of the 21 industry categories, but lower in 13 categories in 2013.)

Categories posting gains were Precision Instruments/Office Supplies (up 7.6%) on increased placements for wristwatches; Government/Organizations (up 7.3%) which saw higher spending by advertising-related organizations; Information/Communications (up 7.2%), helped by strong demand related to satellite broadcasts, mobile phone rates and services, and smartphone services; Home Electric Appliances/AV Equipment (up 7.1%) due to an increase in ads for electric vacuum cleaners, refrigerators and LCD televisions; Cosmetics/Toiletries (up 5.6%) on growth in ads for shampoos and conditioners, and direct-marketed cosmetic lines for women); Household Products (up 5.6%) on a rise in placements for measuring instruments for home use and specialized mattresses; Automobiles/Related Products (up 3.4%) on campaigns related to wagons and imported SUVs; Energy/Materials/Machinery (up 2.8%) on stronger demand for petroleum product and electricity ads; Real Estate/Housing Facilities (up 2.6%) on higher spending on ads for rental housing and home renovation; Beverages/Cigarettes (up 2.0%) helped by a rise in ads for domestic beer and happo-shu (low-malt beers); Food Services/Other Services (up 1.9%) on higher spending by law firms, and door-to-door delivery and moving services; Pharmaceuticals/Medical Supplies (up 1.7%) on ads for general health supplements and health drinks; Transportation/Leisure (up 0.9%) on spending related to theme parks and various events; and Distribution/Retailing (up 0.5%) on spending by direct marketing businesses.

Expenditures fell in the following 7 industry categories: Hobbies/Sporting Goods (down 7.9%) on weak demand for game and audio software ads; Classified Ads/Others (down 7.3%) on decreased demand for classified and ad-hoc ads; Education/Medical Services/Religion (down 4.4%) on cutbacks related to vocational and other educational institutions, and correspondence education); Foodstuffs (down 3.2%) on lowered spending in the areas of health foods, instant noodles and snack foods); Apparel/Fashion, Accessories/Personal Items (down 3.0%) on reduced placements for women’s clothing, and men’s and women’s shoes; Publications (down 2.4%) which saw fewer placements related to women’s and home magazines, and language study materials; and Finance/Insurance (down 1.9%) which slipped due to reduced placements related to direct-marketed insurance products and housing loans.

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 113 years of innovation, the Dentsu Group provides a comprehensive range of client-centric brand, integrated communications, media and digital services through its eight global network brands—Carat, Dentsu, Dentsu media, iProspect, Isobar, mcgarrybowen, Posterscope and Vizeum—as well as through its specialist/multi-market brands including Amnet, Amplifi, Data2Decisions, Mitchell Communications (PR), psLIVE and 360i.

The Dentsu Group has a strong presence in 124 countries across five continents, and employs around 40,000 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

The full text of 2014 Advertising Expenditures in Japan is currently being compiled and will be available on Dentsu’s website at the end of March 2015. For reference, please refer to the tables on the following pages.

 

TABLE 1

Japan’s GDP and Advertising Expenditures (2010−2014)

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

(%)

GDP

(¥ billion)

  Compared

to Previous

Year (%)

Advertising

Expenditures

(¥ billion)

  Compared

to Previous

Year (%)

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 475,110.4 100.8 5,891.3 103.2 1.24
2013 480,128.0 101.1 5,976.2 101.4 1.24
2014   488,215.5   101.7   6,152.2   102.9   1.26
 

Notes:
• The above figures for GDP are taken from the Cabinet Office’s ‘Annual Report on National Accounts’ and ‘Quarterly Estimates of GDP’.
• All the above figures are for the calendar year.

 

TABLE 2
Advertising Expenditures by Medium (2012−2014)

Media  

Advertising Expenditures

(¥ billion)

  YoY Comparison

Ratio (%)

  Component Ratio

(%)

2012   2013   2014 2013   2014 2012   2013   2014
Traditional Media
Newspapers 624.2 617.0 605.7 98.8 98.2 10.6 10.3 9.8
Magazines 255.1 249.9 250.0 98.0 100.0 4.3 4.2 4.1
Radio 124.6 124.3 127.2 99.8 102.3 2.1 2.1 2.1
Television 1,877.0 1,902.3 1,956.4 101.3 102.8 31.9 31.8 31.8
(Terrestrial Television) 1,775.7 1,791.3 1,834.7 100.9 102.4 30.2 30.0 29.8
(Satellite Media-Related) 101.3 111.0 121.7 109.6 109.6 1.7 1.8 2.0
Subtotal 2,880.9 2,893.5 2,939.3 100.4 101.6 48.9 48.4 47.8
Internet
(Advertising placement) 662.9 720.3 824.5 108.7 114.5 11.2 12.1 13.4
(Advertising production) 205.1 217.8 227.4 106.2 104.4 3.5 3.6 3.7
Subtotal 868.0 938.1 1,051.9 108.1 112.1 14.7 15.7 17.1
Promotional Media
Outdoor 299.5 307.1 317.1 102.5 103.3 5.1 5.1 5.1
Transit 197.5 200.4 205.4 101.5 102.5 3.4 3.4 3.3
Flyers 516.5 510.3 492.0 98.8 96.4 8.8 8.5 8.0
Direct Mail 396.0 389.3 392.3 98.3 100.8 6.7 6.5 6.4
Free Newspapers /

Free Magazines

236.7

228.9

231.6

96.7

101.2

4.0

3.8

3.8

POP 184.2 195.3 196.5 106.0 100.6 3.1 3.3 3.2
Telephone Directories 51.4 45.3 41.7 88.1 92.1 0.9 0.8 0.7
Exhibitions /

Screen Displays

260.6

268.0

284.4

102.8

106.1

4.4

4.5

4.6

Subtotal 2,142.4 2,144.6 2,161.0 100.1 100.8 36.4 35.9 35.1
Total   5,891.3   5,976.2   6,152.2   101.4   102.9   100.0   100.0   100.0
 

Note:
• Advertising expenditures in Television were redefined in 2014, retroactive to 2012, to include spending on both Terrestrial Television and Satellite Media-Related advertising.

 

TABLE 3
Advertising Expenditures by Industry in the Traditional Media (2013−2014)

(Unit: ¥10 million)

  Media   Newspapers   Magazines   Radio   Terrestrial Television   Total
Industry 2013   2014   Comparison 
Ratio

(%)

2013   2014   Comparison 
Ratio

(%)

2013   2014   Comparison 
Ratio

(%)

2013   2014   Comparison 
Ratio

(%)

2013   2014   Comparison 
Ratio

(%)

Energy / Materials /

Machinery

628 701 111.6 126 148 117.5 274 265 96.7 1,462 1,446 98.9 2,490 2,560 102.8
Foodstuffs 5,528 5,865 106.1 1,410 1,354 96.0 999 1,008 100.9 19,272 18,123 94.0 27,209 26,350 96.8
Beverages / Cigarettes 2,099 2,167 103.2 1,380 1,321 95.7 514 565 109.9 16,695 17,043 102.1 20,688 21,096 102.0
Pharmaceuticals /

Medical Supplies

1,694 1,816 107.2 743 769 103.5 1,078 1,011 93.8 11,230 11,396 101.5 14,745 14,992 101.7
Cosmetics / Toiletries 3,450 3,405 98.7 3,071 3,077 100.2 452 418 92.5 21,012 22,651 107.8 27,985 29,551 105.6
Apparel / Fashion,
Accessories /

Personal Items

1,627 1,379 84.8 6,568 6,602 100.5 65 75 115.4 3,472 3,326 95.8 11,732 11,382 97.0
Precision Instruments /

Office Supplies

600 718 119.7 915 999 109.2 55 65 118.2 1,264 1,268 100.3 2,834 3,050 107.6
Home Electric Appliances /

AV Equipment

608 568 93.4 685 662 96.6 152 148 97.4 4,088 4,548 111.3 5,533 5,926 107.1
Automobiles /

Related Products

1,662 1,552 93.4 849 916 107.9 933 1,050 112.5 13,266 13,759 103.7 16,710 17,277 103.4
Household Products 1,163 1,225 105.3 555 537 96.8 202 218 107.9 4,936 5,262 106.6 6,856 7,242 105.6
Hobbies / Sporting Goods 1,174 1,080 92.0 1,420 1,377 97.0 274 241 88.0 7,359 6,716 91.3 10,227 9,414 92.1
Real Estate /

Housing Facilities

2,846 2,803 98.5 802 760 94.8 587 661 112.6 7,268 7,580 104.3 11,503 11,804 102.6
Publications 5,647 5,469 96.8 300 255 85.0 664 660 99.4 2,377 2,385 100.3 8,988 8,769 97.6
Information /

Communications

3,570 3,415 95.7 1,096 1,054 96.2 725 758 104.6 18,941 20,864 110.2 24,332 26,091 107.2
Distribution / Retailing 7,439 7,392 99.4 946 1,027 108.6 877 777 88.6 10,011 10,178 101.7 19,273 19,374 100.5
Finance / Insurance 2,304 2,121 92.1 630 584 92.7 934 898 96.1 12,894 12,834 99.5 16,762 16,437 98.1
Transportation / Leisure 9,991 9,733 97.4 1,647 1,785 108.4 980 973 99.3 8,358 8,681 103.9 20,976 21,172 100.9
Food Services /

Other Services

2,125 2,081 97.9 599 538 89.8 1,335 1,675 125.5 10,170 10,210 100.4 14,229 14,504 101.9
Government /

Organizations

1,327 1,385 104.4 229 292 127.5 849 822 96.8 744 881 118.4 3,149 3,380 107.3
Education / Medical

Services / Religion

2,820 2,527 89.6 965 885 91.7 439 400 91.1 3,845 3,905 101.6 8,069 7,717 95.6
Classified Ads / Others 3,398 3,168 93.2 54 58 107.4 42 32 76.2 466 414 88.8 3,960 3,672 92.7
Total   61,700   60,570   98.2   24,990   25,000   100.0   12,430   12,720   102.3   179,130   183,470   102.4   278,250   281,760   101.3
 

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
Terrestrial Television Time rates and production costs of private terrestrial 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.

Contacts

Dentsu Inc.
Shusaku Kannan, (813) 6216-8042
Senior Manager
Corporate Communications Division
s.kannan@dentsu.co.jp

Contacts

Dentsu Inc.
Shusaku Kannan, (813) 6216-8042
Senior Manager
Corporate Communications Division
s.kannan@dentsu.co.jp