Dentsu: Advertising Expenditures in Japan Totaled 5,891.3 Billion Yen in 2012, Up 3.2% from 2011<4324.T>

Wed Feb 20, 2013 11:00pm EST

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-Expenditures Rose for the First Time in Five Years; Traditional Media Posted
Gains;
Satellite Media-Related Advertising Up Sharply; Internet Remained Strong-


TOKYO--(Business Wire)--
Dentsu Inc. (TOKYO:4324)(ISIN:JP3551520004)(President & CEO: Tadashi Ishii; Head
Office: Tokyo; Capital: 58,967.1 million yen) released today its annual report
of advertising expenditures in Japan for the 2012 calendar year, including an
estimated breakdown by medium and industry. 

According to this report, Japan's advertising expenditures in 2012 totaled
5,891.3 billion yen, an increase of 3.2% over the previous year. Overall
spending on advertising began to fall in 2008 (down 4.7%) as a result of the
simultaneous global recession precipitated by the financial crisis in the United
States. Yearly spending continued to decline in 2009 (down 11.5%), 2010 (down
1.3%), and 2011 (down 2.3%), but bounced back in 2012 (up 3.2%), benefiting from
a resumption in spending that had been delayed or postponed after the Great East
Japan Earthquake and Tsunami. Japan's advertising expenditures increased in 2012
for the first time in five years. 

Overview of Advertising Expenditures during 2012

1
        Ad placements recovered strongly during the second half of 2011 on 
        reconstruction-related demand after the Great East Japan Earthquake 
        and Tsunami, and this trend carried over through the first half of 
        2012. After the London 2012 Olympic Games, however, a slowdown in the 
        overall economy depressed advertising expenditures. This was caused by 
        a number of factors, including a fall in consumer spending after the 
        discontinuance of the tax reduction and subsidy program for eco-car 
        purchases, the high value of the yen, economic stagnation in Europe, 
        and a decline in exports. Nevertheless, for the year as a whole 
        advertising expenditures totaled 5,891.3 billion yen, a gain of 3.2% 
        from the previous year; this was the first annual increase in five 
        years. A strong recovery in ad placements pushed spending in the 
        traditional media to 2,779.6 billion yen, exceeding the level achieved 
        in 2010 before the Great East Japan Earthquake and Tsunami.
      2
        Broken down by medium, expenditures were higher in Television (up 
        3.0%), Newspapers (up 4.2%), and Magazines (up 0.4%), and held steady 
        in Radio (down 0.1%). Overall spending in the traditional media was up 
        2.9%. Advertising in Promotional Media also grew (up 1.4%). Satellite 
        Media-Related spending posted double-digit growth (up 13.7%) for a 
        third straight year, boosted by placements related to the London 2012 
        Olympic Games. Internet advertising again posted solid gains (up 7.7%).
      3
        By industry category (for the traditional media), expenditures grew in 
        16 of the 21 industry categories, including Automobiles/Related 
        Products (up 26.9% on increased placements for K-cars [engine 
        displacement up to 660cc] and 2-box vehicles), 
        Information/Communications (up 10.5% on expenditures related to 
        smartphone services, satellite broadcasting, and web content 
        advertising), and Beverages/Cigarettes (up 7.0 % on expenditures 
        related to beauty and energy drinks, lactic acid drinks, and 
        carbonated beverages). In contrast, expenditures fell in 5 of the 21 
        industry categories, including Government/Organizations, where 
        spending fell dramatically (down 69.4%) compared with 2011, which had 
        seen a massive increase in public service placements by advertising 
        organizations after the Great East Japan Earthquake and Tsunami; and 
        Classified Ads/Others (down 19.8% on declines in placements by 
        corporate groups as well as the movie and theater industry).

• Outline of Advertising Expenditures by Medium
Advertising expenditures in the traditional media grew 2.9% compared with the
previous year, reaching a total of 2,779.6 billion yen. Spending rose not only
in Television (up 3.0%), but also in Newspapers and Magazines. Promotional Media
advertising also posted gains (up 1.4%). Satellite Media-Related advertising
expenditures were up 13.7%, boosted by demand related to the London 2012 Olympic
Games. Internet advertising showed solid gains, up 7.7% year on year. 

• Quarterly Breakdown of Growth in Advertising Expenditures in the Traditional
Media in 2012
A quarterly breakdown of advertising expenditures for the traditional media in
the 2012 calendar year showed that spending rose steadily during the first half
of the year, but fell below previous-year levels during the last six months as
the overall economy weakened.

                                                                                       
 (Year-on-year, %)                                                                     
                         2012      Jan.-    Jul.-    Jan.-    Apr.-    Jul.-    Oct.-  
                         (Full     Jun.     Dec.     Mar.     Jun.     Sep.     Dec.   
                         Year)                                                         
 Advertising             102.9     107.8    98.3     105.2    110.6    98.8     97.8   
 Expenditures in the                                                                   
 Traditional Media                                                                     
                                                                                       


• Outline of Advertising Expenditures by Industry (21 Categories, Traditional
Media Only)
Advertising expenditures increased in 16 of the 21 industry categories surveyed
during 2012, and declined in 5 categories. 

Two industry categories posted double-digit gains: Automobiles/Related Products
(up 26.9%) on increased placements for K-cars and 2-box vehicles, and
Information/Communications (up 10.5%) on expenditures related to smartphone
services, satellite broadcasting, and web content advertising. Expenditures also
rose in Precision Instruments/Office Supplies (up 9.7%), aided by growth in
placements for digital SLR cameras and wristwatches; Distribution/Retailing (up
8.6%), which saw stronger demand for general merchandise store and direct
marketing advertising; Transportation/Leisure (up 8.2%) on a recovery in outlays
by travel agencies, hotels and inns; Apparel/Fashion, Accessories/Personal Items
(up 7.6%), due to increased spending on ads for women's clothing and shoes;
Beverages/Cigarettes (up 7.0%) on expenditures related to beauty and energy
drinks, lactic acid drinks, and carbonated beverages; Foodstuffs (up 6.4%), led
by health foods and beauty-related food products; Food Services/Other Services
(up 4.4%), which saw increased placements for ladies' wigs and aesthetic salons;
Real Estate/Housing Facilities (up 4.1%) on an upsurge in demand for household
fixtures and condominium advertising; Cosmetics/Toiletries (up 4.0%), boosted by
growth in ads for skin toners and emulsions; Pharmaceuticals/Medical Supplies
(up 3.4%), helped by a rise in corporate advertising by pharmaceutical
companies, and in placements related to eyeglasses; Education/Medical
Services/Religion (up 3.2%), which recorded increased spending on ads for
English conversation and language schools, preparatory and tutoring schools, and
correspondence education; Publications (up 3.0%) on higher placements for
hardcover books, corporate advertising by publishers, and ads for hobby-related
magazines; Finance/Insurance (up 2.7%) on the strength of corporate advertising
by insurance companies, and ads for credit card loans; and Household Products
(up 1.2%), led by placements for furniture and kitchen accessories. 

Advertising expenditures fell in five industry categories, most notably in
Government/Organizations (down 69.4%). This category saw a massive increase in
public service ad placements by advertising organizations in 2011 after the
Great East Japan Earthquake and Tsunami, but spending dropped back significantly
in 2012; Classified Ads/Others (down 19.8%) on declines in placements by
corporate groups as well as the movie and theater industry;
Energy/Materials/Machinery (down 3.7%) on cutbacks by electric power and gas
companies; Hobbies/Sporting Goods (down 1.9%), hurt by weakness in the areas of
video software, pachinko machines and "pachi-slo" slot machines, and game
software; and Home Electric Appliances/AV Equipment (down 0.7%), which saw a
fall in demand for placements related to LCD televisions and Blu-ray disc
recorders. 

The full text of 2012 Advertising Expenditures in Japan is currently being
compiled and will be available on Dentsu's website at the end of March 2013. For
reference, please refer to the tables on the following pages.

                                                                                                    
 TABLE 1                                                                                            
 Japan's GDP and Advertising Expenditures (2008−2012)                                               
 Year    Gross Domestic Product (B)               Advertising Expenditures (A)               A / B  
                                                                                             (%)    
         GDP                      Compared        Advertising                Compared        
         (¥ billion)              to Previous     Expenditures               to Previous     
                                  Year (%)        (¥ billion)                Year (%)        
 2008    501,209.3                97.7            6,692.6                    95.3            1.34   
 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    470,623.2                97.6            5,709.6                    97.7            1.21   
 2012    475,729.0                101.1           5,891.3                    103.2           1.24   


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 (2010−2012)                                                                                 
 Media                       Advertising Expenditures                   YoY Comparison         Component Ratio                  
                             (¥ billion)                                Ratio (%)              (%)                              
                             2010            2011            2012       2011          2012     2010         2011         2012   
 Traditional Media                                                                                                              
 Newspapers                  639.6           599.0           624.2      93.7          104.2    11.0         10.5         10.6   
 Magazines                   273.3           254.2           255.1      93.0          100.4    4.7          4.4          4.3    
 Radio                       129.9           124.7           124.6      96.0          99.9     2.2          2.2          2.1    
 Television                  1,732.1         1,723.7         1,775.7    99.5          103.0    29.6         30.2         30.2   
 Subtotal                    2,774.9         2,701.6         2,779.6    97.4          102.9    47.5         47.3         47.2   
 Satellite Media-Related     78.4            89.1            101.3      113.6         113.7    1.3          1.6          1.7    
 Internet                                                                                                                       
 (Advertising placement)     607.7           618.9           662.9      101.8         107.1    10.4         10.8         11.2   
 (Advertising production)    167.0           187.3           205.1      112.2         109.5    2.9          3.3          3.5    
 Subtotal                    774.7           806.2           868.0      104.1         107.7    13.3         14.1         14.7   
 Promotional Media                                                                                                              
 Outdoor                     309.5           288.5           299.5      93.2          103.8    5.3          5.1          5.1    
 Transit                     192.2           190.0           197.5      98.9          103.9    3.3          3.3          3.4    
 Flyers                      527.9           506.1           516.5      95.9          102.1    9.0          8.9          8.8    
 Direct Mail                 407.5           391.0           396.0      96.0          101.3    7.0          6.8          6.7    
 Free Newspapers /           264.0           255.0           236.7      96.6          92.8     4.5          4.5          4.0    
 Free Magazines                                                                                                                 
 POP                         184.0           183.2           184.2      99.6          100.5    3.2          3.2          3.1    
 Telephone Directories       66.2            58.3            51.4       88.1          88.2     1.1          1.0          0.9    
 Exhibitions /               263.4           240.6           260.6      91.3          108.3    4.5          4.2          4.4    
 Screen Displays                                                                                                                
 Subtotal                    2,214.7         2,112.7         2,142.4    95.4          101.4    37.9         37.0         36.4   
 Total                       5,842.7         5,709.6         5,891.3    97.7          103.2    100.0        100.0        100.0  
                                                                                                                                


                                                                                                                                                                                                                                 
 TABLE 3                                                                                                                                                                                                                         
 Advertising Expenditures by Industry in the Traditional Media                                                                                                                                                                   
 (2011−2012)                                                                                                                                                                                                                     
 (Unit: ¥10 million)                                                                                                                                                                                                             
              Media          Newspapers                              Magazines                             Radio                                 Television                                Total                                 
 Industry                    2011         2012         Comparison    2011        2012        Comparison    2011        2012        Comparison    2011          2012          Comparison    2011         2012         Comparison  
                                                       Ratio                                 Ratio                                 Ratio                                     Ratio                                   Ratio       
                                                       (%)                                   (%)                                   (%)                                       (%)                                     (%)         
 Energy / Materials /        551          640          116.2         166         126         75.9          241         283         117.4         1,766         1,575         89.2          2,724        2,624        96.3        
 Machinery                                                                                                                                                                                                                       
                                                                                                                                                                                                                                 
 Foodstuffs                  5,222        5,561        106.5         1,421       1,553       109.3         1,154       1,163       100.8         18,822        20,052        106.5         26,619       28,329       106.4       
                                                                                                                                                                                                                                 
 Beverages /                 2,019        2,344        116.1         1,212       1,386       114.4         577         532         92.2          15,813        16,725        105.8         19,621       20,987       107.0       
 Cigarettes                                                                                                                                                                                                                      
                                                                                                                                                                                                                                 
 Pharmaceuticals /           1,762        1,700        96.5          708         836         118.1         993         1,039       104.6         10,891        11,272        103.5         14,354       14,847       103.4       
 Medical Supplies                                                                                                                                                                                                                
                                                                                                                                                                                                                                 
 Cosmetics /                 2,726        3,130        114.8         3,350       3,353       100.1         467         411         88.0          21,144        21,889        103.5         27,687       28,783       104.0       
 Toiletries                                                                                                                                                                                                                      
                                                                                                                                                                                                                                 
 Apparel / Fashion,          1,641        1,675        102.1         6,200       6,483       104.6         68          66          97.1          2,909         3,421         117.6         10,818       11,645       107.6       
 Accessories /                                                                                                                                                                                                                   
 Personal Items                                                                                                                                                                                                                  
                                                                                                                                                                                                                                 
 Precision                   479          530          110.6         828         914         110.4         35          52          148.6         1,288         1,390         107.9         2,630        2,886        109.7       
 Instruments /                                                                                                                                                                                                                   
 Office Supplies                                                                                                                                                                                                                 
                                                                                                                                                                                                                                 
 Home Electric               747          687          92.0          758         646         85.2          176         163         92.6          3,768         3,916         103.9         5,449        5,412        99.3        
 Appliances /                                                                                                                                                                                                                    
 AV Equipment                                                                                                                                                                                                                    
                                                                                                                                                                                                                                 
 Automobiles /               1,403        1,444        102.9         831         866         104.2         777         852         109.7         9,970         13,311        133.5         12,981       16,473       126.9       
 Related Products                                                                                                                                                                                                                
                                                                                                                                                                                                                                 
 Household Products          1,017        1,149        113.0         467         471         100.9         174         183         105.2         4,763         4,693         98.5          6,421        6,496        101.2       
                                                                                                                                                                                                                                 
 Hobbies /                   1,295        1,279        98.8          1,455       1,486       102.1         306         314         102.6         8,005         7,774         97.1          11,061       10,853       98.1        
 Sporting Goods                                                                                                                                                                                                                  
                                                                                                                                                                                                                                 
 Real Estate /               2,853        2,917        102.2         826         749         90.7          446         502         112.6         6,320         6,701         106.0         10,445       10,869       104.1       
 Housing Facilities                                                                                                                                                                                                              
                                                                                                                                                                                                                                 
 Publications                5,696        5,702        100.1         306         297         97.1          670         606         90.4          2,277         2,611         114.7         8,949        9,216        103.0       
                                                                                                                                                                                                                                 
 Information /               3,831        3,903        101.9         1,584       1,346       85.0          782         847         108.3         16,003        18,429        115.2         22,200       24,525       110.5       
 Communications                                                                                                                                                                                                                  
                                                                                                                                                                                                                                 
 Distribution /              6,943        7,563        108.9         1,044       996         95.4          816         876         107.4         9,891         10,862        109.8         18,694       20,297       108.6       
 Retailing                                                                                                                                                                                                                       
                                                                                                                                                                                                                                 
 Finance / Insurance         2,310        2,105        91.1          754         600         79.6          946         937         99.0          10,111        10,857        107.4         14,121       14,499       102.7       
                                                                                                                                                                                                                                 
 Transportation /            9,678        10,219       105.6         1,524       1,491       97.8          953         1,023       107.3         7,372         8,390         113.8         19,527       21,123       108.2       
 Leisure                                                                                                                                                                                                                         
                                                                                                                                                                                                                                 
 Food Services /             1,988        1,942        97.7          679         625         92.0          1,178       1,261       107.0         8,511         9,068         106.5         12,356       12,896       104.4       
 Other Services                                                                                                                                                                                                                  
                                                                                                                                                                                                                                 
 Government /                1,265        1,450        114.6         209         212         101.4         1,204       882         73.3          8,195         783           9.6           10,873       3,327        30.6        
 Organizations                                                                                                                                                                                                                   
                                                                                                                                                                                                                                 
 Education / Medical         2,785        2,891        103.8         1,048       1,022       97.5          479         445         92.9          3,267         3,465         106.1         7,579        7,823        103.2       
 Services / Religion                                                                                                                                                                                                             
                                                                                                                                                                                                                                 
 Classified Ads /            3,689        3,589        97.3          50          52          104.0         28          23          82.1          1,284         386           30.1          5,051        4,050        80.2        
 Others                                                                                                                                                                                                                          
 Total                       59,900       62,420       104.2         25,420      25,510      100.4         12,470      12,460      99.9          172,370       177,570       103.0         270,160      277,960      102.9       
                                                                                                                                                                                                                                 


 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 and production costs for Internet site and mobile in-app advertising (includes production costs for banner ads as well as website set-up costs related to products, services and ad campaigns).  
                                                                                                                                                                                                                      
 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 Dentsu Inc.
Founded in 1901, Dentsu Inc. has held the position of the world's largest
single-brand agency for 40 years. Through its unique "Integrated Communication
Design" approach, Dentsu offers multinational clients the most comprehensive
range of advertising and marketing services in the industry. While continuing to
pursue innovation in the digital arena, Dentsu is active in the production and
marketing of sports, movies, anime and other entertainment content on a global
scale. The Dentsu Group has more than 6,000 clients and around 22,000 employees
worldwide.
Dentsu News: http://www.dentsu.com/news/index.html
Dentsu Inc.: http://www.dentsu.com/index.html

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

Copyright Business Wire 2013

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