Dentsu: Advertising Expenditures in Japan Totaled 5,709.6 Billion Yen in 2011, Down 2.3% from 2010

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 2011 calendar year, including an estimated breakdown by medium and industry.

According to this report, the nation's advertising expenditures in 2011 totaled 5,709.6 billion yen, a decrease of 2.3% compared with the previous year. Japanese advertising expenditures rebounded in 2004 after a three-year decline, due to a recovery in the Japanese economy and the rapid proliferation of digital home electric appliances. Spending continued to grow in 2005 (up 2.9%), 2006 (up 1.7%) and 2007 (up 1.1%), but fell by 4.7% in 2008 as a result of the financial crisis in the United States and ensuing simultaneous global recession. Annual spending shrank further in 2009 (down 11.5%) and 2010 (down 1.3%), and dropped slightly again in 2011, largely due to the impact of the Great East Japan Earthquake and Tsunami.

? Outline of Advertising Expenditures by Medium

Advertising expenditures in the traditional media declined 2.6% compared with 2010. Spending held relatively steady in Television (down 0.5%), but continued to fall in Newspapers, Magazines and Radio. Among other media, Promotional Media advertising was also down 4.6%. Satellite Media-Related advertising expenditures grew 13.6% as the switch to digital terrestrial broadcasting boosted demand for television sets equipped with 3-band tuners. Internet advertising was up 4.1%.

A quarterly breakdown of advertising expenditures for the traditional media in the 2011 calendar year shows that spending recovered steadily in the second half of the year, and was higher in the October–December quarter than during the same period in 2010.

Advertising expenditures increased in 5 of the 21 industry categories surveyed during 2011, but declined in 16 categories.

The industry categories posting gains were Apparel/Fashion, Accessories/Personal Items (up 6.8%), on increased placements for women's clothing and handbags; Distribution/Retailing (up 2.6%), due to stronger demand for direct marketing and convenience store advertising; Real Estate/Housing Facilities (up 1.5%), as a result of an increase in corporate advertising by housing manufacturers, and placements related to solar power systems; Information/Communications (up 0.5%), thanks to growth in smartphones and related services, and web content advertising; and Government/Organizations (up 166.4%), as a result of an increase in ad placements by Advertising Council Japan.

On the other hand, five industry categories posted double-digit declines. These were Home Electric Appliances/AV Equipment (down 25.7%), on reduced placements for LCD televisions, plasma televisions and batteries; Energy/Materials/Machinery (down 20.6%), due to a sharp decline in advertising by electric power companies; Food Services/Other Services (down 10.9%), which was hurt by cuts in spending on ads for ladies' wigs and ads for legal services; Precision Instruments/Office Supplies (down 10.6%), as the result of a drop in digital camera advertising; and Hobbies/Sporting Goods (down 10.2%), where demand was weak for pachinko machines and "pachi-slo" slot machines, and for audio software ads. Advertising expenditures were also lower in Beverages/Cigarettes (down 9.9%), due to reduced spending on domestic beer, happo-shu (low-malt beer), no-malt "third category" beer and shochu; Finance/Insurance (down 8.2%), which was impacted by cutbacks in advertising for direct-marketed medical insurance, corporate advertising by insurance companies and ads for investment funds; Foodstuffs (down 7.6%), where fewer ads were placed for instant noodles, tsukudani (food boiled down in sweetened soy sauce to preserve it) and beauty-related food products; Transportation/Leisure (down 7.5%), as overall travel-related advertising was depressed, especially on the part of hotels and travel agencies; Education/Medical Services/Religion (down 7.3%), which saw reductions in advertising for schools and correspondence education; Cosmetics/Toiletries (down 3.8%), where spending fell on cosmetics series for women, facial cleansers and hairdressing products; Pharmaceuticals/Medical Supplies (down 1.7%), on lower demand for medicines for intestinal disorders, mouthwashes and sore throat remedies; and Automobiles/Related Products (down 1.4%), due to reduced placements for sedans, mono-box minivans and sports coupes.

About Dentsu Inc.
Founded in 1901, Dentsu Inc. has held the position of the world's largest single-brand agency for almost 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 over 20,000 employees worldwide.

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The full text of 2011 Advertising Expenditures in Japan is currently being compiled and will be available on Dentsu's website at the end of March 2012. For reference, please refer to the tables on the following pages.

Notes:

• The above figures for GDP are those released in the Cabinet Office's 'Annual Report on National Accounts' and 'GDP Estimates'.
• GDP figures are based on data revised in December 2011 (retroactively to 1994).
• All the above figures are for the calendar year.