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Forecast for Advertising Expenditure in FY2011 Advertising expenditure is expected to rise 0.6% year-on-year in FY2011, an increase for the second consecutive year. Total expenditure will rise marginally, but outlays by the four mass media will be down slightly.
NARI have issued their advertising expenditure forecast for FY2010 and for FY2011
(April 2011–March 2012).
This forecast uses the NARI/JCER (Japan Center for Economic Research) model developed by the two organizations and is based on total advertising business sales (“total advertising expenditure,” hereafter) reported in the Ministry of Economy, Trade and Industry’s Specific Service Industry Dynamic Statistics.
Total advertising expenditure in FY2010 was up 3.2% compared to the previous year, lower than the 6.2% year-on-year increase forecast in July 2010, but did register positive growth compared to the large 13.0% decline reported in FY2009.
The economy has been treading water since last autumn but is expected to strengthen gradually from the beginning of the new fiscal year. Therefore, for FY2011 advertising expenditure is forecast to increase 0.6% over the previous year, up for the second consecutive year. But while among the four mass media spending on television advertising is robust, outlays for newspaper, magazine and radio advertising continue to be sluggish, and a 0.4% year-on-year decline is forecast.
TV Advertising Spending Will Be Up Slightly, but Will Continue to Be Stalled for Newspapers, Magazines and Radio
By media, advertising expenditure for television, which accounts for the largest share, is expected to rise by 0.7% in FY2011 (vs. +4.1% in FY2010). The rebound in spot advertising has been contributing to this increase since the second half of 2009, but sales of sponsor advertising have been less lively. Advertising expenditure for newspapers is expected to remain in minus territory, declining by 3.2% (vs. −1.9% in FY2010). For magazines, advertising expenditure will drop by 2.6% (vs. −8.4% in FY2010), less of a downturn than the substantial drop in FY2009, but still not a full recovery from the slump. Radio advertising expenditure will also be down, declining 3.7% (vs. −4.7% in FY2010), continuing a downward trajectory. Meanwhile, where advertising expenditure for the non-mass media is concerned, Internet advertising expenditure increased 13.6% in FY2010 and is forecast to grow 15.4% in FY2011, continuing double-digit growth. For transit, spending will grow 0.4%, staying close to previous levels (vs. −1.4% in FY2010). Outlays on flyers and direct mail are forecast to increase a steady 1.9% (vs. +5.2% in FY2010).
No Major Changes in Rate of Increase or Decrease Expected in the First and Second Halves
Looking at forecast figures for the first and second halves, whereas in the first half of FY2010 total advertising expenditure was up 1.0 % compared to the same period the previous year and firmed up to 5.2% in the second half, in FY2011 an increase of 0.6% is forecast for both the first half and the second half. Total advertising expenditure for the four mass media, down 0.1% in the first half of FY2010 and up 3.7% in the second half, is expected to decline slightly, by 0.4% in both the first half and the second half of FY2011. Outlays for television advertising will remain static and sluggishness will continue for newspapers, magazines and radio.
By media, advertising expenditure in the second half of FY2010 was up 1.9% for newspapers, down 4.3% for magazines, up 5.2% for television and down 2.7% for radio. In the first half of FY2011, spending is expected to be lower than the same term the previous year for all mass media except television, where an increase of 0.7% is forecast: down 3.3% for newspapers, 2.7% for magazines and 3.7% for radio. In the second half, spending on television advertising is forecast to edge up by 0.7%, while it is expected to drop 3.2% for newspapers, 2.6% for magazines and 3.7% for radio.
Meanwhile, Internet advertising expenditure, which grew 20.3% in the second half of FY2010, is expected to continue double-digit expansion in FY2011, growing 14.8% in the first half and 15.8% in the second half. Spending on transit advertising, which grew 2.5% in the second half of FY2010, is forecast to go up 1.5% in the first half of FY2011 but to decline by 0.7% in the second half. For flyers and direct mail, the 5.6% increase registered in the second half of FY2010 is forecast to be more sluggish in FY2011, with 1.9% growth in both the first and second halves.
