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Forecast for Advertising Expenditure in FY2011 after the March 11 Earthquake (Summary)
After increasing in FY2010, year-on-year expenditure in FY2011 is expected to drop 5.1%. Both total expenditure and outlays by the four mass media will decline.
NARI and the Japan Center for Economic Research (JCER) have issued their advertising expenditure forecast for FY2011 (April 2011–March 2012), taking into account the aftereffects of the March 11 earthquake and tsunami disaster. This forecast uses the NARI/JCER 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 for FY2011 is forecast to drop 5.1% year-on-year, compared to the forecast increase of 0.6% year-on-year issued in February 2011. Trends for FY2011 showed signs of economic recovery after the economy’s stagnant performance since last autumn, but the March 11 earthquake and tsunami, and the accident at Tokyo Electric Power Co., Inc.’s Fukushima Daiichi Nuclear Power Station, dampened corporate performance and consumer behavior. As a result, total advertising expenditure for FY2011 is expected to drop compared to the previous fiscal year. Among the four mass media, spending on television advertising, which had been expected to increase, will likely drop. Outlays for newspaper, magazine and radio advertising will also continue to be sluggish, leading to a forecast 4.7% decline in advertising spending.
TV Advertising Spending Will Drop; Outlays for Newspapers, Magazines and Radio Will Continue to Stagnate
By quarter, advertising expenditure for the April–June quarter that we are currently in will show a nearly double-digit drop, declining by 9.8%. Similar declines are expected for July–September (down 6.4%), October–December (down 3.0%) and January–March (down 1.6%). The forecast for each successive quarter shows a smaller year-on-year drop, but nevertheless, overall spending is expected to be lower compared to last year. As a result advertising expenditure for the first half of FY2011 is expected to decline 8.1% and drop 2.3% for the second half, and will be down 5.1% for FY2011 as a whole.
By media, advertising expenditure will continue to be sluggish—down 9.8% for newspapers, down 2.9% for television and down 7.3% for radio. For television, especially, advertising outlays are forecast to decline after a 3.6% increase in FY2010. This lackluster performance is due to the lag in spot advertising expenditure. Meanwhile, Internet advertising expenditure will not grow as strongly as in FY2010 but even so, outlays are expected to post double-digit growth of 12.1%.
