TOKYO: Adspend levels continued to decline in Japan last year, but at a slower rate than in 2009, Dentsu has reported.

The marketing services conglomerate estimated that ad revenues in the world's second largest ad market fell 1.3% on an annual basis, reaching ¥5.8tr ($70.1bn; €51.1bn; £43.1bn).

This followed an 11.5% contraction in 2009, and a 4.7% decrease in 2008, with the recession exerting a pernicious impact on the Japanese market.

"A quarterly breakdown of advertising expenditure for traditional media in the 2010 calendar year shows that spending strengthened steadily in the second half of the year," Dentsu's report added.

"Year-on-year spending in the October-December quarter was higher than during the same period in 2009."

Television ad sales rose 1.1% to ¥1.7tr, last year, which, when combined with greater stability overall, suggests "the downturn in advertising spending is bottoming out."

However, magazines saw a 9.9% slump in demand, logging ¥303bn, figures standing at 5.2% concerning radio, yielding ¥130m, and 5.1% for newspapers, posting ¥640m.

Outdoor returns dropped 3.8%, registering ¥309bn, with the related transit category off 6% to ¥192bn. Flyers haemorrhaged 3%, securing ¥528bn, and direct mail lost 2.9%, providing ¥408bn.

Elsewhere, free print titles slipped 8.4%, attracting ¥288bn, and point-of-purchase was flat, generating ¥184bn.

More positively, internet advertising expenditure hit ¥775bn, broken out as ¥608bn for placement and ¥167bn for production, a collective improvement of 9.6% year on year.

This incorporated the mobile web and costs covering the creation of banners ads, as well as set-up fees regarding new goods and campaign sites.

By industry, foodstuffs remained the largest sector, albeit essentially unchanged on ¥28.8bn, while cosmetics and toiletries grew 4.4%, less than ¥100m behind.

Information and communications lodged ¥22.1bn, up 8.6%, and beverages and cigarettes recorded ¥21.8bn, down 4% compared with 2009.

Household products enjoyed a 10.3% surge, on ¥13.2bn, personal items - including apparel and accessories - leapt 8.8%, delivering ¥10.1bn, and electrical appliances expanded 4%, to ¥7.3bn.

Finance and insurance brands boosted their budgets by 1.6% to ¥15.4bn, as the segment's recovery from the depths of the crisis gained strength.

By contrast, pharmaceutical and medical supplies cut back 10.6%, resulting in a cumulative outlay of ¥14.6bn, according to Dentsu.

Sporting goods and hobbies also witnessed an 8.6% spending reduction, on ¥12.3bn, a decline coming in at 14.4% for government and social campaigns, on ¥4.1bn.

Elsewhere, retailing and distribution was off 4.8% to ¥18.2bn, while real estate decreased over 8.5%, attaining ¥10.3bn.

Among the favourable factors at work across 2010 were events like the FIFA World Cup in South Africa and Expo 2010 in China, alongside subsidies for offerings such as eco-friendly cars, Dentsu added.

Data sourced from Dentsu; additional content by Warc staff