Advertising expenditures in Japan grew 3.0% year on year to a record high of 7,316.7 billion yen; Internet advertising expenditures increased 7.8% year on year to 3,333.0 billion yen, driving the growth in the advertising market as a whole; Events/Exhibitions/Screen Displays in the Promotional Media advertising expenditures category jumped 28.7% year on year, largely due to the end of COVID-19 restrictions

Dentsu Inc. (President & CEO: Takeshi Sano; Head Office: Tokyo) announced today the completion of its calendar year 2023 annual report on advertising expenditures in Japan, which includes a breakdown of estimated expenditures by advertising medium and industry. The main findings of the report are as follows.

Overview of Japanese Advertising Expenditures throughout 2023

• Throughout 2023, advertising expenditures grew 3.0% year on year to 7,316.7 billion yen, topping the previous year's record to become the biggest amount recorded since these expenditures were first estimated in 1947. Advertising expenditures rebounded in the first half of the year, reflecting an increase in onsite events following the government's downgrading of COVID-19 to the same status as seasonal influenza, and an upturn in domestic and international travel and tourism. In the second half of the year, social and economic activities picked up despite the impact of a heat wave lasting from the summer through autumn, as well as conflict in the Middle East, driving up demand mainly for advertising related to transportation/leisure; food services/other services; and beverages/ cigarettes. As a whole, the growth of Japan's advertising market was spurred by Internet advertising expenditures, which have continued to rise amid the ongoing digital transformation of Japanese society, and Promotional Media advertising expenditures, particularly the category of Events/Exhibitions/Screen Displays, for which expenditures rose as the movement of people increased.
  
  
• Internet advertising expenditures reached a record high 3,333.0 billion yen, surpassing the previous year's total by 241.8 billion yen, a 7.8% increase. Rising demand for video ads resulting from the widespread use of connected TVs* along with the expansion of the digital promotions market contributed to this growth.
  * Televisions that can connect to the Internet

• Under Promotional Media advertising expenditures, the category of Events/Exhibitions/Screen Displays jumped 28.7% year on year to 384.5 billion yen. Contributing to this increase were the resumption and expansion of events that had been cancelled or scaled down during the COVID-19 pandemic and a recovery in inbound tourism, which resulted in more advertising campaigns for special events at entertainment facilities such as multipurpose commercial complexes, theme parks, and corporate PR facilities.

Advertising Expenditures in Japan

Note: The categories of "Events" and "Merchandise-related EC Platforms" within Advertising Expenditures in Japan were added in 2019. Results up to 2018 have not been adjusted to reflect this change.

Overview of Advertising Expenditures by Medium

In Dentsu Inc.'s annual reports on advertising expenditures in Japan, 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 Newspapers, Magazines, Radio, and Television); (2) Internet advertising expenditures (comprising the categories of Internet Media costs, 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).

(1) Traditional Media advertising expenditures amounted to 2,316.1 billion yen (down 3.4%)
Despite increases in the categories of Magazine and Radio advertising expenditures, total Traditional Media advertising expenditures decreased compared with the previous year as a result of declines in Newspaper and Television advertising expenditures.

(2) Internet advertising expenditures amounted to 3,333.0 billion yen (up 7.8%)
Reflecting progress in the digital transformation of Japanese society, Internet advertising expenditures posted solid growth and accounted for 45.5% of total advertising expenditures. Of the amount of Internet advertising expenditures, Internet Media costs came to 2,687.0 billion yen, up 8.3% year on year. Television media-related video advertising expenditures continued to grow from the previous year amid the widespread use of connected TVs, rising 26.6% to 44.3 billion yen. Advertising expenditures for Merchandise-related EC Platforms within Advertising Expenditures in Japan* also continued to grow from the previous year on the back of household demand, increasing 10.1% to 210.1 billion yen. Internet advertising production costs increased 3.7% to 435.9 billion yen, rising from the previous year mainly due to the expanding video advertising market.

* 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 1,667.6 billion yen (up 3.4%)
The amount for Events/Exhibitions/Screen Displays rose substantially as all kinds of events resumed and were expanded following the government's downgrading of COVID-19 to the same status as seasonal influenza, and more advertising campaigns were implemented for special events at multipurpose commercial complexes, theme parks, and other facilities. Also contributing to the higher Promotional Media advertising expenditures were growth in the categories of Transit and Outdoor advertising, which reflected an increase in large-scale and impact campaigns.

TABLE 1
Advertising Expenditures by Medium (2021−2023)

TABLE 2
Sources of Media Expenditures

TABLE 3
Advertising Expenditures and Japan's Nominal GDP (2003−2023)

Notes:
1.The GDP figures are taken from the Cabinet Office's "Annual Report on National Accounts" and "Quarterly Estimates of GDP."
2.The method for estimating advertising expenditures in Japan was modified in 2007, and the data for 2005 and 2006 have been retroactively revised.
3.Since 2018, digital advertising carried by traditional media companies has been added to estimates for Internet Advertising Expenditures.
4.Since 2019, advertising expenditures for Merchandise-related EC Platforms within Advertising Expenditures in Japan have been added to estimates for Internet Advertising Expenditures, and Events advertising expenditures have been added to estimates for Exhibitions/Screen Displays.

TABLE 4
Advertising Expenditures by Industry in Traditional Media for 2023
(Traditional Media Only, Excluding Satellite Media-related Spending)

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