Dentsu: Despite Recovery, Japanese Ad Economy Contracts For Fourth Consecutive Year
Despite the lingering effects of the Japanese earthquake and tsunami, the Tokyo-based agency holding company managed to post a 3.3% gain in net sales for its fiscal year ended March 31. Dentsu, the parent company of agencies such as 360i and mcgarry bowen, said that while production continued to recover in Japan, the nation’s economy remained uncertain due to compounding effects of the overseas economic slowdown.
“However, demand for advertising, mainly television spots, showed signs of recovery from the summer onward as clients' supply chains were restored,” Dentsu said in an earnings report released early this morning. “As a result, performance in the second half was robust overall.”
Dentsu estimates that the Japanese ad economy contracted 2.3% during calendar year 2011, marking the fourth consecutive calendar year of erosion for one of the world’s largest advertising markets.
“Looking at the breakdown of advertising expenditures by medium, spending in the traditional media category fell 2.6%, while advertising in promotional media was down 4.6%, falling below the previous year's level,” Dentsu stated, adding that “satellite [TV] media-related advertising expenditures posted double-digit growth (up 13.6%) as the switch to digital terrestrial broadcasting boosted demand for television sets equipped with three-band tuners.”
Not surprisingly, the Internet remained one of the most robust sectors of the Japanese ad economy, expanding 4.1%, “due in part to the development of new advertising modalities targeting social media.”