Dentsu 2020 Annual Report On Advertising In Japan

Tristan Cotterill

Dentsu Inc. (Headquarters: Minato-ku, Tokyo; President & CEO: Hiroshi Igarashi) has released its calendar year 2020 annual report on advertising expenditures in Japan, including an estimated breakdown by medium and industry.

In 2020, Japan’s advertising expenditures substantially decreased, particularly for the April-June quarter. This reflected the impact of the global #COVID19 pandemic, which saw the postponement or cancellation of a wide range of events, advertising campaigns, and sales promotion campaigns.

Signs of a gradual recovery appeared starting in July. In the October-December quarter, expenditures were recovering to a level on a par with the corresponding quarter of 2019. However, on a full-year basis advertising expenditures totaled 6,159.4 billion yen, an 11.2% decrease compared with the previous year. This marked the first annual decline in total advertising expenditures in nine years, the previous occasion having been in the aftermath of the Great East Japan Earthquake and Tsunami of 2011.

The margin of decrease is second only to that recorded in 2009 (down 11.5%) following the global financial crisis.

Overview of Japanese Advertising Expenditures during 2020

◆In 2020 overall advertising expenditures amounted to 6,159.4 billion yen (down 11.2%). Starting in March, owing to the impact of the COVID-19 pandemic, the movement of people was restricted both in Japan and overseas. Following the declaration of a state of emergency in Japan in April, the Japanese economy experienced a significant slowdown. Consumption generated by the inbound visitor market–a key driver in recent years–came to a virtual standstill. People were urged to stay at home, which had a major negative impact on many sectors. Food services, transportation and leisure in particular were severely affected. The advertising industry was also buffeted by the after-effects of these conditions. As the central government and local governments moved to implement economic policies to deal with the pandemic, and measures were put in place to control the spread of COVID-19, signs of gradual recovery began to appear starting in July. In the October-December quarter, expenditures were returning to levels on a par with the corresponding quarter of 2019. However, over the year as a whole, advertising expenditures were significantly lower compared with the previous year.

◆For the first time in nine years–since the aftermath of the 2011 Great East Japan Earthquake and Tsunami–annual advertising expenditures shrank. It was also the first year a double-digit rate of contraction was recorded since the recession in 2009, triggered by the global financial crisis. The rate of decline was the second highest of any year since Dentsu began compiling estimates in 1947.

◆As large numbers of people refrained from going out or traveling, there was a surge in demand related to staying at home, and the digital transformation (DX) of social life greatly accelerated. This was particularly evident in such fields as delivery services, online shopping, online conferencing, online events and seminars, remote working, and cashless payment services. Driven by this trend, Internet advertising expenditures took the lead in staging a recovery, and achieved growth on a full-year basis. Expenditures on digital advertising carried by traditional media companies maintained the double-digit growth seen in the previous year. For advertising and sales promotion campaigns originating in digital media, 2020 was a year of further evolution and growth. In contrast, promotional media spending was substantially lower owing to the impact of the COVID-19 pandemic, which led to the postponement or cancellation of a broad range of events, exhibitions, and conventional advertising and sales promotion campaigns. This included the postponement of the 2020 Tokyo Olympic and Paralympic Games. In traditional media, which run advertising campaigns concomitant with events, advertising expenditure declined significantly.

The full text of 2020 Advertising Expenditures in Japan is currently being compiled and will be available on Dentsu’s website at the end of April 2021.

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