The advertising industry is sensitive to the rise and fall of the economy. In 2003, advertising spend in Japan showed a declining trend because most companies in the country dramatically reduced their advertising expenditures due to the nation's steady economic stagnation. Japan's total ad spend that year was about 5.6 trillion yen, only 99.7% of total advertising expenditures in the country in the previous year. Of this amount, expenditures for sales promotion activities, including outdoor advertising, amounted to 1.9 trillion yen, accounting for 34.1% of the country's total ad spend.

Outdoor Advertising Expenditures Reached 2.6 Trillion Yen in 2003
In the first quarter of 2003, Japanese advertising expenditures were at the same level that they were in at the end of 2002, due to the industry's recovery in 2002. In the second quarter of 2003, negative factors such as the spread of SARS and the Iraq War adversely influenced the industry, decreasing advertising expenditures from the same period in 2002. Business improved after the third quarter (July to September) as the demand for digital products increased, which allowed these companies to spend more for advertising. In the fourth quarter, the Assembly elections, the Tokyo Motor Show, and the launch of digital broadcasting had a positive effect on the industry. Despite business recovery in the latter half of the year, however, total advertising expenditures amounted to only 5.6 trillion yen. All in all, therefore, the advertising business registered a decline for the last three years. Of total advertising expenditures, sales promotions accounted for 1.9 trillion yen, decreasing by 20% compared to their 2002 level and also registering a steady decline for the last three years. More specifically, outdoor advertising expenditures amounted to 2.6 trillion yen, and transit advertising expenditures, to 2.3 trillion yen. While outdoor advertising expenditures decreased by 3.5%, transit advertising expenditures increased by 1.0%.

Signs of Recovery for the Transit Advertising Business
Transit advertising is widely used all over the world. Transit ads could be more creative and innovative, however. In Japan, where this kind of advertising is likewise popular, its market decreased by 5.3% in 2002 from 2001 due to the decline in the publications business, but showed a slight 1% recovery in 2003. Ads on buses, which Toei Transportation, a bus company in Tokyo, introduced in 2000, have had a great ripple effect on other bus companies and countries. From their crude beginnings, however, they have since grown in visual impact, and they now blend well with the environment in the districts where the buses they are on operate Bus advertising is now considered an important promotional medium in Japan that, used with other media, increases total ad impact.

Advertising Business Expected to Increase Slightly
Advertising officials in Japan expect the industry's revenues to increase by 102.3% this year from last year because of general business recovery, the popularity of digital products, and the 2004 Athens Olympics. In particular, companies manufacturing and selling home appliances, including TVs and audio-visual products, as well as digital cameras, DVD players and other digital products are expected to spend significantly for advertising for the 2004 Athens Olympics. The ban on cigarette advertising by Japan's Department of Treasury is expected to have an adverse effect on the outdoor advertising industry, however, since cigarette advertising commands an overwhelming share of total expenditures thereat for outdoor advertising.