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

  Dentsu: Advertising Expenditures in Japan Totaled 5,976.2 Billion Yen in   2013, Up 1.4% from 2012     —Expenditures Back on Growth Track, Rising for a Second Straight Year on    Strong Demand for Television Spot, Outdoor, Transit and POP Advertising—  Business Wire  TOKYO -- February 20, 2014  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    Jan.–   Jul.–   Jan.–   Apr.–   Jul.–   Oct.–                     (Full  Jun.   Dec.   Mar.   Jun.   Sep.   Dec.                       Year) Advertising Expenditures in the  100.1  98.8   101.4  98.5   99.2   101.9  100.9 Traditional Media   • 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)       Gross Domestic Product (B)  Advertising Expenditures (A)  Year   GDP            Compared      Advertising      Compared      A / B        (¥ billion)   to Previous   Expenditures    to Previous   (%)                       Year (%)      (¥ billion)      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)                 Advertising Expenditures      YoY             Component Ratio Media          (¥ billion)                  Comparison     (%)                                               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       89.1      101.3     111.0     113.7   109.6   1.6     1.7     1.8 Media-Related Internet (Advertising    618.9     662.9     720.3     107.1   108.7   10.8    11.2    12.1 placement) (Advertising    187.3     205.1     217.8     109.5   106.2   3.3     3.5     3.6 production) 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 /                 255.0     236.7     228.9     92.8    96.7    4.5     4.0     3.8 Free Magazines POP             183.2     184.2     195.3     100.5   106.0   3.2     3.1     3.3 Telephone       58.3      51.4      45.3      88.2    88.1    1.0     0.9     0.8 Directories Exhibitions /                 240.6     260.6     268.0     108.3   102.8   4.2     4.4     4.5 Screen Displays 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                                     Comparison                     Comparison                     Comparison                       Comparison                       Comparison Industry          2012    2013    Ratio        2012    2013    Ratio        2012    2013    Ratio        2012     2013     Ratio        2012     2013     Ratio                                     (%)                            (%)                            (%)                              (%)                              (%) Energy / Materials /       640      628      98.1         126      126      100.0        283      274      96.8         1,575     1,462     92.8         2,624     2,490     94.9  Machinery                                                                                                                                                                      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 /       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 Cigarettes                                                                                                                                                                      Pharmaceuticals /                   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 Medical Supplies                                                                                                                                                                      Cosmetics /       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 Toiletries                                                                                                                                                                      Apparel / Fashion,          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 Accessories / Personal Items                                                                                                                                                                      Precision Instruments /     530      600      113.2        914      915      100.1        52       55       105.8        1,390     1,264     90.9         2,886     2,834     98.2  Office Supplies                                                                                                                                                                      Home Electric Appliances /      687      608      88.5         646      685      106.0        163      152      93.3         3,916     4,088     104.4        5,412     5,533     102.2  AV Equipment                                                                                                                                                                      Automobiles / Related           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 Products                                                                                                                                                                      Household         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 Products                                                                                                                                                                      Hobbies /         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 Sporting Goods                                                                                                                                                                      Real Estate / Housing           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 Facilities                                                                                                                                                                      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 /     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 Communications                                                                                                                                                                      Distribution /    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 Retailing                                                                                                                                                                      Finance /         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 Insurance                                                                                                                                                                      Transportation /                 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  Leisure                                                                                                                                                                      Food 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 Other Services                                                                                                                                                                      Government /      1,450    1,327    91.5         212      229      108.0        882      849      96.3         783       744       95.0         3,327     3,149     94.6 Organizations                                                                                                                                                                      Education / Medical           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 Services / Religion                                                                                                                                                                      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  Contact:  Dentsu Inc. Shusaku Kannan, (813) 6216-8042 Senior Manager Corporate Communications Division s.kannan@dentsu.co.jp