‐Advertising Expenditures in Japan Grew by Double Digits to 6,799.8 Billion Yen (Up 10.4% Year on Year) in 2021, Indicating a Recovery in the Advertising Market Due to the Weakening Impact of the COVID-19 Pandemic; Internet Advertising Expenditures Surpassed Traditional Media Advertising Expenditures for the First Time, Driving the Recovery of Japan's Overall Advertising Market; Expenditures for Digital Advertising Carried by Traditional Media Companies Surpassed the 100 Billion Yen Mark for the First Time‐

Dentsu Inc. (Headquarters: Minato-ku, Tokyo; President & CEO: Norihiro Kuretani), today announced its calendar year 2021 annual report on advertising expenditures in Japan, which includes a breakdown of estimated expenditures by advertising medium and industry.

In 2021, total advertising expenditures in Japan increased 10.4% year on year to 6,799.8 billion yen. This increase was supported by the solid growth of Internet advertising expenditures amid efforts to promote a digital transformation of Japanese society, as well as the weakening impact in the second half of the year of the COVID-19 pandemic, which has continued since 2020.

Overview of Japanese Advertising Expenditures during 2021
◆In 2021, total advertising expenditures amounted to 6,799.8 billion yen (up 10.4%). As in 2020, expenditures were significantly impacted by the COVID-19 pandemic in the first half of 2021, during which the Japanese government responded to the spread of infections by declaring a state of emergency and implementing quasi-emergency measures. In the second half, business and consumer sentiment improved amid progress in the COVID-19 situation. Against that backdrop, Television advertising expenses recovered and Internet advertising expenses increased at an accelerated pace, driving up growth in advertising expenses overall. The recovery in demand for advertising was also given a boost by the 2020 Tokyo Olympic and Paralympic Games. From October, results in many advertising media clearly improved as limits on attendance at concerts, sporting events, theme parks, and so on, were gradually eased, and the economy and flows of people began returning to normal. Meanwhile, the number of hybrid events combining live and online activities steadily increased, and live events started to be held as measures were put in place to prevent the spread of COVID-19 infections. Among such events, the holding of large-scale sporting events, in particular, provided grounds for optimism.

◆Internet advertising expenditures increased 21.4% year on year to 2,705.2 billion yen, maintaining the high rate of growth recorded since Dentsu began estimating results in 1996 for these expenditures. For the first time, Internet advertising expenditures exceeded Traditional Media expenditures, which amounted to 2,453.8 billion yen (up 8.9%). The market grew thanks to substantially higher demand for video advertising, particularly on video-streaming services, along with the greater use of digital promotions. Meanwhile, in response to growing calls from the public to provide a balanced amount of information about COVID-19 and related matters to a wider audience, the Internet as well as other types of media have been steadily deployed for this purpose during the pandemic.

◆Expenditures for Digital Advertising Carried by Traditional Media Companies surpassed the 100 billion yen mark for the first time, after having posted double-digit growth for three consecutive years since 2018, the first year for which Dentsu estimated expenditures in this category. These expenditures are for advertising through Internet media services, mainly provided by newspaper, magazine, radio, and television companies. These companies have been leveraging their editorial and production expertise to offer rich content and expand various services, including video and audio streaming, as well as online events.

Overview of Advertising Expenditures by Medium
In Dentsu's annual Advertising Expenditures in Japan reports, expenditures are classified into three broad areas of advertising media: (1) Traditional Media advertising expenditures (comprising advertising expenditures and their respective production costs for the categories of Newspaper, Magazines, Radio, and Television); (2) Internet advertising expenditures (comprising Internet advertising medium expenditures, including digital advertising carried by traditional media companies, Merchandise-related EC Platforms within Advertising Expenditures in Japan, and Internet advertising production costs); and (3) Promotional Media advertising expenditures (comprising advertising expenditures for the categories of Outdoor, Transit, Flyers, Direct Mail, Free Newspapers, POP, and Events/Exhibitions/Screen Displays). Backed by a rebound in Traditional Media advertising expenditures and a substantial increase in Internet advertising expenditures in 2021, total advertising expenditures increased significantly year on year.

(1)Traditional media advertising expenditures amounted to 2,453.8 billion yen (up 8.9%)Newspaper, Magazine, Radio and Television advertising expenditures all increased as the market recovered from the impact of the pandemic. Among these categories, Television advertising expenditures posted double-digit growth compared with the previous year, due to strong demand from people staying home during the pandemic.

(2)Internet advertising expenditures amounted to 2,705.2 billion yen (up 21.4%)With the accelerating digital transformation across Japanese society, Internet advertising expenditures grew 21.4% year on year. Internet advertising expenditures accounted for 39.8% of total advertising expenditures, exceeding Traditional Media expenditures for the first time since Dentsu began estimating results in 1996 for Internet advertising expenditures. Expenditures for Digital Advertising Carried by Traditional Media Companies grew substantially, surpassing the 100 billion yen mark after only three years since Dentsu had begun compiling estimates for this medium in 2018. Of the total, Television Media-related Video Advertising expenditures accounted for 24.9 billion yen, jumping 46.5% year on year. These expenditures are expected to rise substantially as a growing number of consumers use connected televisions. Advertising expenditures for Merchandise-related EC Platforms within Advertising Expenditures in Japan* rose 23.5% to 163.1 billion yen, on the back of strong demand for products and services that can be used while staying home.

* Advertising expenditures for Merchandise-related EC Platforms within Advertising Expenditures in Japan are limited to expenditures for advertising on e-commerce platforms that sell such merchandise as household appliances, miscellaneous goods, books, clothing, and office supplies, incurred by operators of stores that use these platforms to sell goods. Accordingly, these expenditures do not cover the total amount of internet advertising expenditures for advertising products sold through e-commerce as a whole.

(3)Promotional Media advertising expenditures amounted to 1,640.8 billion yen (down 2.1%)Although various events, including the 2020 Tokyo Olympic and Paralympic Games, and conventional advertising campaigns increasingly took place over the course of 2021, Promotional Media advertising expenditures decreased year on year due to the overall impact of the COVID-19 pandemic. Nevertheless, Outdoor advertising expenditures increased as impact-driven out-of-home (OOH) advertising campaigns, which included large and eye-catching digital signage, were deployed despite the COVID-19 situation, and Flyers and Direct Mail advertising expenditures rose on the back of demand from consumers staying at home during the pandemic.

Overview of Advertising Expenditures by Industry in Traditional Media
(Excluding Satellite Media-related spending)
Advertising Expenditures increased in 16 of the 21 industry categories surveyed during 2021, including Information/Communications, Precision Instruments/Office Supplies, Beverages/Cigarettes, Home Electric Appliances/AV Equipment, and Classified Ads/Others.

For reference, please refer to the TABLE 2.

The full text of 2021 Advertising Expenditures in Japan is currently being compiled and will be available on Dentsu's website at the end of April 2022. For reference, please see the tables on the following pages.



TABLE 1
Japan's Nominal GDP1 and Advertising Expenditures (2017−2021)


TABLE 2
Advertising Expenditures by Industry in Traditional Media (2020−2021)


TABLE 3
Sources of Media Expenditures

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