David Blecken
Feb 25, 2015

Japanese adspend returns to 2008 levels; online up 12 per cent

TOKYO - Advertising spending rose by nearly 3 per cent in Japan last year, with total expenditure surpassing the 6,000 billion yen (US$50 billion) mark for the first time in six years, according to a report from Dentsu.

Japanese advertising spend peaked before the increase in consumption tax in April
Japanese advertising spend peaked before the increase in consumption tax in April

In addition, online advertising spend rose above 1,000 billion yen (US$8.42 billion) for the first time. The findings represent a rise in advertising spend for a third consecutive year and come despite continued caution among consumers, heightened by last year’s increase in consumption tax from 5 to 8 per cent.

Dentsu attributes the overall rise to last-minute demand before the consumption-tax rose in April, plus spending around the Sochi Winter Olympics. The agency notes that spending dropped off again after the tax increase, but maintained “modest growth” due to the FIFA World Cup.

A recent consumer confidence survey conducted by Nielsen in last year’s fourth quarter found confidence among Japanese respondents to be the second-lowest in Asia-Pacific (after South Korea) with an index of 73, well below the global average of 96 and down four points on the previous year.

Against that challenging backdrop, advertisers increased their efforts to encourage people to part with their cash, with spend rising in 14 out of 21 industry categories listed by Dentsu. Toiletries and cosmetics accounted for the highest spend across traditional media (up 5.6 per cent), followed by foodstuffs, information and communications (up 7.2 per cent), transportation and leisure and beverages and cigarettes (up 2 per cent).

Other sectors that increased spend included precision instruments and office supplies (based on increased placements for watches), government, home electric appliances and AV equipment (driven by vacuum cleaners, refrigeratoes and LCD televisions), household products and automotive (led by ‘wagons’ and imported SUVs).

While spending on foodstuffs remained high, it nonetheless fell 3.2 per cent on the previous year. Other categories to spend less included hobbies and sporting goods, education, medical services and religion, apparel and fashion, and accessories and personal items.

In terms of media, internet advertising saw an increase in spend of more than 12 per cent, which Dentsu says was driven by growth in smartphone and video initiatives and “ads using new advertising technologies”. TV, radio and ‘promotional media’ spend rose while newspaper spend fell. Magazines remained static.

Dentsu did not provide a forecast for 2015. However, Shusaku Kannan, the agency's spokesperson in Japan, said Dentsu expected the Japanese advertising market to "grow at a cruising speed" this year.

 
 
 

 

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