Navigating Shifting Tides: COVID-19 Impact on Advertising in Japan

Since the pandemic hit early 2020, brands and businesses have been forced to scale-down or postpone strategies including out-of-home campaigns, PR and media events, and for some, slash media spending overall. Observing advertising sales trends in Japan between 2019-2020 shows the effect is consequential.

As an agency providing our clients with brand activation delivery and advertising services, we’re particularly aware of the impact of recent social-economic and behavioral conditions on the advertising industry in Japan.

Traditional Media's Decline: Newspapers, Television, Magazines, Radio

According to data issued by Japan’s Ministry of Economy, Trade and Industry (METI), sales of advertising across all media types dropped by over 14% in 2020 compared to 2019.

Notably, traditional media (newspapers, television, magazines, and radio) all saw ad sales decline significantly last year. Magazines were most affected, dropping by almost 33%, newspapers by 18.7%, television by 12.8%, and radio by 11.7% last year.

Overseas Advertising Plummets

Unsurprisingly, disruption to inbound tourism and international activities hit hard on “overseas” advertising (sales of foreign advertising media). This specific category includes the buying of various and multiple foreign media such as newspapers and digital (web, smartphone, etc.), mainly for promotion and sales of Japanese products, tourism, and inbound promotion by local municipalities.

Overseas ad sales reached over 51 billion yen in 2019 but drastically shrank by 46% to less than 30 billion yen by the close of 2020.

Social media, YouTube, smartphones, devices, and other technology had naturally altered many people's lifestyles and ways of communicating long before COVID-19. However, prolonged stay-home requests and increased working from home forced rapid change in Japanese society, infrastructure and values.

This impact is reflected to a great extent in internet advertising, which increased by a staggering 131% to 1.1 trillion yen in sales in 2020 compared with 2019-a trend very likely to continue post-COVID.

Tokyo Metro and Outdoor Ad Sales: A 24% Drop

On the Tokyo Metro, on trains and in train stations throughout last year and still now, we’ve observed conspicuously empty advertising spaces that were previously continuously filled. It’s not yet apparent if this is a temporary trend that will revert post-COVID. However, both traffic and outdoor ad sales indeed tanked by around 24% in 2020.

Previously uncommon on the Seibu train lines, we’ve noticed increasing empty ad space, with some of it periodically assigned to Seibu Group’s own promotions or content related to Seibu Group’s affiliated businesses and activities. (Perhaps to avoid their prime media real estate going to waste.).

Prolonged Effects of COVID-19 on Consumer Behavior and Media Spending

The fallout from COVID-19 has been longer and greater than most expected, with consumers now fully adapted to new lifestyles, needs, and behaviors. The effect on media spending and ad sales is telling and demonstrates a significant transition period for the advertising industry in Japan.

The data refers to a report issued by the Ministry of Economy, Trade and Industry of Japan.

Based in Tokyo, An-yal is the leading independent advertising agency for global lifestyle brands in Japan and worldwide. Contact us to get ahead with your integrated advertising and creative needs.