Digital spending in Japan breaks 1 trillion yen: Dentsu

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The company's annual advertising expenditures report shows the total pie grew for a fifth consecutive year.

Japanese advertising spend rose by 1.9 percent year-on-year in 2016, with online spending breaking the trillion yen (US$8.9 billion) barrier, according to Dentsu.

Total spend stood at 6,288 billion yen ($55.8 billion), Dentsu said. Advertising spend in the market has risen gradually since 2011, when the industry suffered a major setback as a result of the Tohoku earthquake.

Dentsu had expected growth in excess of 1.9 percent, based on factors such as optimism around the Olympics and the expansion of digital advertising. While digital spend did continue to rise, weak consumption, natural disasters, the threat of terrorism and protectionism and a general sense of insecurity about the future tempered overall growth.

As expected, online spend increased the most—13 percent, to 1.3 trillion yen ($16.8 billion)—led by areas including smartphone and video advertising. That compares to $113 billion in the US, according to eMarketer.

Traditional media declined by 0.4 percent. Television registered a small increase (1.7 percent), while radio surprised with an increase of 2.5 percent. Magazines plummeted by 9 percent while spend on newspapers fell 4.4 percent.

In terms of industry sectors, nine out of 21 surveyed posted increases in spend. The ‘Energy/Materials/Machinery’ category grew the most (41 percent), led by campaigns for electric power companies and gas companies. Home appliances and AV equipment companies increased spend by nearly 10 percent, with a focus on hair styling and beauty appliances, refrigerators and 4K TVs.

Product categories that spent less included watches, digital cameras, apparel and fashion, cars, beverages and cigarettes. Dentsu’s detailed study also noted marginally fewer placements for categories such as sports clubs, railways, foreign airlines, aesthetic salons, finance and insurance—and male hairpieces.