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Revised Forecast for Advertising Expenditure for FY 2011 (Outline) The forecast for advertising expenditure issued for FY2011 in June has been revised upward. Although total advertising expenditure will increase, spending on advertising in the four mass media is expected to drop.
The Nikkei Advertising Research Institute (NARI) and the Japan Center for Economic Research (JCER) have amended their forecast for advertising expenditures for fiscal 2011 (April 2011–March 2012). 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 fiscal 2011 has been revised upward slightly, to minus 4.9% compared to the previous year, compared to the emergency forecast issued in June this year (down 5.1%) which took into account the effects of the March 11 earthquake, although the figure is still negative on a year-on-year basis. The extent of the decline is also likely to be mitigated somewhat by the earlier than expected recovery of the supply chain after the disaster and signs that consumers’ self-imposed mood of restraint is dissipating. But concerns over summer power shortages in the aftermath of the nuclear plant accident in Fukushima, which are not confined to the Tokyo metropolitan area but have also spread to Kansai and other regions of the country, are putting a damper on this, slowing down business performance and consumption trends, and expenditure versus the same period the previous year is only expected to go into positive territory next year.
Drop in Newspaper and Radio Advertising Expected to Slow but Further Declines for TV and Magazine Advertising Foreseen
Compared to the June forecast of a 4.7% drop in advertising expenditure for the four mass media—newspapers, magazines, television and radio—spending will further decline by 0.2 points to 4.9%. By media, advertising expenditure for newspapers is forecast to drop 8.1% (vs. a 9.8% decline in the June forecast), for magazines down 10.0% (vs. minus 6.7%), for television down 3.6% (vs. minus 1.5%) and for radio down 4.1% (vs. minus 6.0%). Although the decline in advertising spending for newspapers and radio is expected to be somewhat smaller than the previous forecast, the drop in spending for magazines and television is likely to be larger than anticipated.
Meanwhile, the forecast for total advertising expenditure by quarter is as follows: for April–June, down 8.7% compared the same quarter the previous year (vs. the June forecast of a 9.8% drop), showing a slight improvement. For July–September, the drop will be 5.3% (vs. 6.4% down), for October–December minus 2.2% (vs. a 3.0% decline), and for January–March 2012 down 0.9% (vs. down 1.6%), showing that the rate of decline will show as the quarters progress. Consequently, advertising spending is expected to drop 7.0% (vs. a drop of 8.1% in the June forecast) for the first half of fiscal 2011 and decline 1.6% (vs. minus 2.3%) for the second half.
But in fiscal 2012, whereas spending on advertising is expected to rise for television, newspapers and radio, total advertising expenditure for fiscal 2012 is forecast to increase by 2.9% vs. the previous year, and by 1.9% for the four mass media.
