Japanese ad expenditure dips for first time in five years

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TOKYO--Japanese ad expenditures decreased in 1998, for the first time in five years, to hit $48.7 billion due to the nation's worst recession since the end of World War II, according to a survey released February 16 by advertising giant Dentsu Inc.

Ad expenditures dipped by 3.8% in 1998 from the previous year as companies started to cut back on their advertising budgets and consumers reined in on their purchases, the survey said.

Though ad expenditures had increased steadily since 1994, "the growth, however, dried up in the latter half of 1997, and expenditures remained below the previous year's levels for most of 1998," Dentsu said.

Industries that are part of troubled sectors of the economy, such as real estate, housing, home electronics, fashion and automobiles, were the main forces drawing down the advertising expen-diture numbers, Dentsu said. Meanwhile, sectors subject to deregulation in 1998, such as whiskey, financial services and insurance, where those that posted gains.

All the forms of major media -- newspapers, magazines, radio and television --posted declines in ad revenue with the major media sector taking in $32.785 billion, down by 4.2% from the previous year. TV ads experienced the smallest fall, dropping by 2.9% to $16.96 billion, while newspapers took the biggest hit with a 6.7% drop to $10.25 billion.

Sales promotion was down by 3.3% in 1998 to $17.1 billion, while new media such as cable TV and direct to home satellite broadcasters bucked the trend by increasing 10.2% for the year to $188 million.

Dentsu said it expects the four major media to post a 0.2% increase in advertising revenue in 1999 and it's pinning any gains for the advertising sector on an economic recovery.

Copyright February 1999, Crain Communications Inc.

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