philippine advertising S4/1-8/ FRIDAY-SATURDAY / SEPTEMBER 26-27, 2014 VOL XXVIII ISSUE 45 ISSN 0116-3930 WWW.BWORLDONLINE.COM industry report

Challenging times Digital Marketing Mad Men

S4/2 S4/2 S4/8 samantha gonzales 2/S4 Industry Report Friday-Saturday, September 26-27, 2014 Advertising in challenging times

By Jeffrey O. Valisno Sub-Editor The monthly cost for a 40x60 ft space in one of EDSA’s prime locations is P280,000- We are in a consumer age, and advertising remains P300,000 per month. The best location is near an important tool for businesses to call attention to the Guadalupe bridge where billboards can their products. We are also in a period of aggressive cost up to P500,000. economic growth and technological innovation, which means that more money is being poured into advertising — but the other side of that coin is that competition is intensifying, while new media are also making many advertising business models obsolete. “The Philippines is developing. We are pro- gressing — we’re getting more affluent,” advertis- ing executive Randy Aquino of The Ad Foundation of the Philippines told reporters during the launch of the business sector initiative #IntegrityNation- Now held earlier this month. ABS-CBN Corp. corporate communications head Ramon “Bong” R. Osorio said in an interview that while advertising “has become a lucrative enterprise that no shrewd businessman can do without,” the advertising industry is also being disrupted by clients moving away from traditional forms of advertising to embrace new methods. Mr. Osorio said that as in many markets around the world, these new models may mean less of a need for “traditional advertising” — those that go through channels like TV, radio, and newspapers. “Since most of our advertising agencies here in the Philippines are affiliated with international agencies abroad, any change in the global market has a direct impact on how we do business here in the country,” he added. As clients adopt new business models, adver- tising companies must contend with the prolif- eration of in-house creative departments of some businesses, media networks competing directly with creative ad agencies, and freelancers selling their work at rock-bottom fees. “With the pie growing smaller and smaller every year, it is common for a new business pitch to have more than five ad agencies scrambling and bidding to win the account,” Mr. Aquino said. c Advertising consultant Rene Santamaria said some companies are now opening up their ad- vertising businesses to independent agencies on a per-project basis, and slowly doing away with long-term contracts. aileen Camille B. Dimatata aileen Camille B. Challenging times, S4/ 3 Changing the landscape of the advertising industry: The dawn of digital marketing Early adopters of digital mar- ads on Facebook can you recall?” By Jasmine Agnes T. Cruz keting were Nike, Smart, Globe, he said, explaining that in TV, one Reporter and call centers which began using doesn’t have a choice but to watch digital in 2003 to 2004, said Inter- the commercial. But consumers Television, radio, and print — net and Mobile Marketing Associ- are merciless when it comes to those used to be the three main ation of the Philippines President closing or skipping ads online. “If options for marketing campaigns, (IMMAP) President Mike Pala- on Facebook, you see an ad of a but now brands — oftentimes with cios, in an interview with Busi- brand you don’t know, you close the help of advertising agencies — nessWorld. He remembers how it because you have no relation- are launching their campaigns on in 1999, there were 250,000 users ship,” said Mr. Lim, but if you are Web sites, social media, sponsored who were mostly on dial-up, but already aware of the brand, then search, mobile applications, and now there are more than 38 mil- you might welcome its presence more online platforms. To under- lion Internet users in Philippines, on social media. stand this shift, BusinessWorld from the A, B, C, and D classes. So which is better? Digital or interviewed some experts on how “Over the last 15 years, there is traditional media? Mr. Lim says digital is changing the landscape a significant shift of consumer at- neither as they complement each of the advertising industry. tention from traditional media to other. digital,” said Mr. Palacios, explain- You also have to judge if the Beginnings of digital ing that people are spending more digital platform fits your company. The dawn of digital marketing time in front of their desktops, Mr. Lim said that if you have a happened during the ascent of Ya- laptops, smart phones, and tablets. problem with awareness, then you hoo and Friendster in 2005, said Consumer attention to digital shouldn’t go digital, and if you’re a Donald Lim, chief digital officer is similarly making brands and B2B (business to business) com- of ABS-CBN Broadcasting Corp., advertisers pay attention to these pany then your customers are not and chief e-Marketing Strategist platforms. “Brands now know, like individuals, so there’s no sense for of Mansmith and Fielders, Inc., in it or not, they have to be there, you to make a Facebook page. an interview with BusinessWorld. because the consumers are there,” “This is just my subjective view,” said Mr. Lim. More than likes he said, recalling a time when “Digital will become the center can publish relevant content, ence abroad, and when they didn’t ness goals, what problems they There are no standard measure- most advertising campaigns were of all marketing,” added Mr. Pala- and users can like it or click on it innovate, they were left behind, want to solve, and where their ments to judge whether an on- banner ads on these top Web sites. cios. “It’s not a question of if but if it catches their attention, and said Mr. Lim. Thus they are telling consumer is will dictate the plat- line campaign is successful, said Even though there was a budding when.” these can be gateways towards the their Asian counterparts to begin form, said Mr. Lim. Mr. Lim. Even when it comes to interest in digital, only the dredg- brand’s site. understanding digital even before He advised brands to do a Facebook page likes, the metrics es of an agency’s budget were al- Factors driving Multinational companies are it booms in the country. digital plus one strategy, which don’t cut across the board. You located to such campaigns, said growth also driving growth in digital mar- “Digital marketing is a totally means digital plus one tradi- can’t compare one page which has Mr. Lim. If a brand had a Web site, When Facebook hit a peak of keting, said Mr. Lim. different discipline,” said Mr.L im. tional medium. When it comes 1 million likes and the other with these were managed by someone popularity in 2010, it revolution- Multinationals are mandated For traditional media, the strategy to marketing, there are four con- 2 million and conclude that the 2 from the technology department, ized the advertising industry, said by their foreign-based parent is to “lean back.” Once you made sumer touch points, which can be million is more successful. not marketing. Mr. Lim, explaining that through companies to spend a portion of your spot ad, you run it on TV, and summarized as AIDA (Awareness Mr. Lim said that it all depends The years from 2008 to 2009 Facebook advertisers suddenly their budget on digital marketing. you rest. For digital, one has to and Interest, Desire and Action). on the brand’s target market. For were what Mr. Lim considers as understood that digital is a dif- Mr. Lim estimates that local units “lean forward.” If you don’t keep Traditional media is strong in AI, example if, say, a brand’s target the “dark ages of digital.” “Almost ferent animal from television, ra- of multinational companies are posting new content, your online said Mr. Lim. To spread aware- market is 15 to 19 year olds, then all the players [in digital market- dio, and print. Digital is personal; allocating 5% to 10% of their ad- presence will dim and your cus- ness and thus trigger interest one must look at how many of ing] over committed and under- digital is a space for engagement vertising budget on digital, slightly tomers will not see your messages. about your brand, you need mass them are on Facebook. If there delivered because no one knew — characteristics that traditional lower than the 15% to 20% allotted “The marketing culture has media which has a wide reach. are 6 million of them, then you better,” Mr. Lim said. This experi- media doesn’t have. “A testimoni- by global brands. to adjust,” said Mr. Lim, remark- Digital is strong with DA, said don’t shoot for 10 million. From ence was why brands were harsher al from a customer is more pow- In comparison, local compa- ing that one can’t just “copy and Mr. Lim. When people are aware that base, one should know that on digital than TV, radio, and erful,” said Mr. Lim, comparing nies are spending only 1% to 2% paste” strategies from traditional of your brand, they will like your getting 20% to 25% of that is good print, he said. For the traditional this to whatever glowing write- of their marketing budgets for media to digital media. Facebook page, and then they will already. media, brands never asked, “What ups a company can make about digital and yet these numbers have see a coupon, or an invitation to For Facebook posts, an engage- is my ROI (return on investment) itself. already risen compared to prior Goodbye traditional go to the brand Web site to reg- ment rate of 1% and up is ideal. This on this?” and yet they asked this “People don’t search for safe- years, said Mr. Lim. media? ister for points, then they will means, that for every post that the when it came to digital media. guard.com,” said Mr. Lim, making The reason the multinationals Just because digital marketing is desire the product, and then buy brand makes on its Facebook page “People lost trust in digital,” said an example of how people don’t are ahead of the game is that their getting stronger, brands still have it, said Mr. Lim. with 1 million fans, there should be Mr. Lim, but a resurgence would go straight to brand Web sites. foreign counterparts saw how to evaluate if such online plat- Digital can’t do mass aware- 10,000 likes, shares, or comments. happen in 2010. But through Facebook, brands digital marketing grew in influ- forms fit them.A company’s busi- ness, said Mr. Lim. “How many Digital marketing, S4/7 S4/3 Friday-Saturday, September 26-27, 2014 Industry Report

Challenging times, Advertisement Expenditure Shares from S4/2 8.54% MAGAZINES Based on Insertions 23.56% We are in a consumer age, and ad- AM vertising remains an important tool for businesses to call attention to their products. We are also in a pe- 40.23% FTA riod of aggressive economic growth and technological innovation, which means that more money is being poured into advertising — but the RADIO SHARES other side of that coin is that com- TV SHARES PRESS SHARES petition is intensifying, while new media are also making many adver- tising business models obsolete. “The Philippines is developing. 59.72% 37.74% 53.72% 76.44% We are progressing — we’re get- CABLE tabloid broadsheet FM ting more affluent,” advertising executive Randy Aquino of The SOURCE: KANTAR MEDIA Ad Foundation of the Philippines illustration by: Samantha gonzales told reporters during the launch Top Advertising Categories by Quarter, 2013 of the business sector initiative #IntegrityNationNow held earlier Detergents and Laundry Aids Hair Shampoo Hair Shampoo Detergents and Laundry Aids this month. ABS-CBN Corp. corporate communications head Ramon Hair Shampoo Detergents and Laundry Aids Detergents and Laundry Aids Hair Shampoo “Bong” R. Osorio said in an inter- view that while advertising “has Milk Powder Milk Powder Hair Conditioner Corporate Advertising become a lucrative enterprise that no shrewd businessman can do without,” the advertising industry Toothpaste, Mouthwash, Toothbrush Gov’t Agencies and Public Utilities Toothpaste, Mouthwash, Toothbrush Toothpaste, Mouthwash, Toothbrush is also being disrupted by clients moving away from traditional Hair Conditioner Toothpaste, Mouthwash, Toothbrush Milk Powder Wireless Telephony forms of advertising to embrace new methods. Mr. Osorio said that as in many Gov’t Agencies, Public Utilities Wireless Telephony Corporate Advertising Hair Conditioner markets around the world, these new models may mean less of a need for “traditional advertising” Entertainment Hair Conditioner Wireless Telephony Entertainment — those that go through channels like TV, radio, and newspapers. Miscellaneous Food Products Miscellaneous Food Products Facial Care Milk Powder “Since most of our advertising agencies here in the Philippines are affiliated with international Wireless Telephony Flavor enhancers and Food Mixes Miscellaneous Food Products Facial Care agencies abroad, any change in the global market has a direct impact Facial Care Facial Care Entertainment Soaps on how we do business here in the country,” he added. SOURCE: KANTAR MEDIA illustration by: Samantha gonzales As clients adopt new business models, advertising companies bottom fees. Advertising consultant Rene “With this setup, unscrupulous perative for advertising agencies bilities. The agency part of these must contend with the prolifera- “With the pie growing smaller Santamaria said some companies advertisers can pitch their business to adjust and become “business new companies will just be a piece tion of in-house creative depart- and smaller every year, it is com- are now opening up their adver- then just conveniently ‘steal’ the transformation consultants.” of the whole, and not the entire ments of some businesses, media mon for a new business pitch to tising businesses to independent ideas of a bidder behind their backs,” “Agencies must now learn how business,” Mr. Santamaria said. networks competing directly with have more than five ad agencies agencies on a per-project basis, Mr. Santamaria said in an interview. to provide clients with product Based on a report by research creative ad agencies, and freelanc- scrambling and bidding to win the and slowly doing away with long- He said because of these de- innovation, brand development, group Kantar Media, advertisers ers selling their work at rock- account,” Mr. Aquino said. term contracts. velopments, it has become im- and a myriad of production capa- in the Philippines last year spent 4/S4 S4/5 Industry Report Friday-Saturday, September 26-27, 2014 Friday-Saturday, September 26-27, 2014 Industry Report Finding your spot in the market

By Zsarlene B. Chua Reporter

For both start-ups and established businesses, getting the word out to target consumers is one way of boosting sales and further building your following. If you have been in the business for a while, you already know how advertising works. But if you are new in it — an entrepre- neur who has done OK with word-of-mouth but now wants to expand, for example — here is a quick guide on what to do and how to do it. Naturally, the first thing that comes to a business owner’s mind is to place an ad on traditional media (print, TV and radio) or on new media (Web sites and social media sites). But for Martin D. Sarmenta, senior strategic planner of Ace Saatchi & Saatchi, what is most important is knowing what you want to achieve with advertising — knowing what purpose the adver- tisement should serve. “The first question is, ‘What is the problem?’ or ‘What’s the issue’ — why are you advertising in the first place?” Mr.S ar- menta said in an interview with BusinessWorld. “If the objective is unclear, you would have wasted millions.”

AD AND MEDIA AGENCIES Now, let’s say the objective is clear and the company owner wants to place an ad, Mr. Sarmenta suggests approaching an ad- vertising agency in order to plan a project. “You go to ad agencies or brand-handling agencies first because they will look out for what the brand is going to be. They will do the research and they will craft communication for you,” he said. “Many agencies would offer different services today — some have their digital [or] activation inside the agency,” Mr. Sar- menta said. A big part of what agencies offer is research and strategy. Other services could include account management, as well as partnering with media agencies — the ones who buy placements in the media to show the ad — although, Mr. Sarmenta said, clients might have their own preference or have already bought ad placements. “In short, ad agencies map out how the advertisement would look like as they are in charge of churning out the idea that would best communicate the message of the objective to the target market, and they are the ones in charge of producing the materials for the advertisement. Media agencies are the ones who buy time slots from TV channels and radio stations as well as placements for print publications and the Internet,” Mr. Sarmenta said. “Media agencies know who watches at a certain time, why they’re watching, what screen they’re watching on, and which shows would best complement your product [as well as time slots],” he added. They have the best packages for clients as they are privy to programming schedules as well as which publica- tions would best capture the target market. “They know which soap is included in the next few months,” Mr. Sarmenta said. Another insight worth noting: “The advertising agency is more than the commercials we see... Actually, the best client will know how to treat their agency like a business partner and the Globe Digital Advertising, Mobext, best agencies function as business partners,” Mr. Sarmenta said. and IDDI bring Beacon technology in the country ‘STORE EXPERIENCE’ While an ad campaign complete with traditional media ads and Revolutionizes in-store shopping experience using mobile devices new media ads would easily cost millions of pesos, not all busi- nesses need this whole package in order to get the customers Globe Telecom, the leading telecommunica- “This partnership will build the largest lo- coming in. tions network, joins forces with Mobext, the cation-based marketing or "point-of-sales" mo- “Every product will have its own quirks,” Mr. Sarmenta said, citing the Starbucks cafe chain as an example. country’s first pure-play mobile marketing bile marketing network in the country. IDDI, “Starbucks doesn’t do TV, the most Starbucks does is print agency, and In-Store Digital Display Interna- with close to 1,000 screens across the country, ads [and banners] and that’s it, but they invest heavily in the tional (IDDI), a technology-based information will give Beacons extensive footprint when it store experience. [It] depends on who you are, who you are marketing company, to bring Beacon technol- comes to penetrating major retail locations,” after, who you want to be.” ogy in the country, which will provide a more said Arthur Policarpio, chief executive officer Those looking for cheaper ways to advertise would usually unique in-store shopping experience using (CEO) of Mobext Philippines. look at the new media (the Internet and mobile applications). mobile devices. “Globe, as the smartphone leader in the But Mr. Sarmenta said that advertising online might not be as “Studies show that more than 95% of trans- market, will give us enviable scale when it cheap as many think, as there are Facebook ads, search engine optimization, search engine marketing, Web sites, online actions worldwide are still made in physical comes to acquiring our user base and we are apps — basically a whole campaign in itself. venues. In addition, more than half of con- also tapping Globe’s strong retail partnerships “There’s definitely a shift to online — it has been felt in the sumers visiting stores have smartphones, and to widen the Beacon network in the Philip- last decade, not just in [Inter- that number is growing rapidly in the Philip- pines. Mobext, with its expertise in mobile net] ads — mobile devices pines,” shares Bela Gupta D’Souza, Globe’s technology and strategy, will provide long- are also increasing,” Mr. Mobile Advertising head. term solutions for retailers and brands who Sarmenta said. “We have listened closely to the require- want to incorporate Beacons in their market- The shift does not necessarily mean that ments of our clients and by introducing Bea- ing,” he added. consumers are getting cons in the market, we are confident we can "IDDI is pleased to partner with industry younger, as consumers help brands reach target customers in their leaders Globe and Mobext in this pioneer- of a particular brand 20 “last mile” of purchase. By delivering in-store ing beacon rollout as the our first digital-out- years ago might also be shift- notifications to smartphones all the way down of-home advertising platform offering of the ing online. to an aisle level, Beacons will enable retail- group. This complements the existing in-store More than the issue of cost ers to establish one-to-one connections with digital display network of IDDI in over 300 — because spending a lot does not necessarily mean having a shoppers, be it as rewards, coupons or prod- stores and will definitely provide added value successful advertisement — he uct information. We couldn’t be more thrilled to our partner retail chains. This will also ena- said that the strategy involved to partner with Mobext and IDDI to bring this ble advertisers to engage with consumers thru and the power of the creative side technology to the Philippines and we are al- contextually relevant content on a one-on- are even bigger factors. ready seeing a very positive response from one basis at point-of-purchase. And of course, “‘Did I get the right insight for top retailers in the country, including Globe ultimately, consumers win not only because this particular target market?’ is a stores nationwide,” she added. they receive brand content that is relevant to good question the prospective ad- Beacons are a low-cost, battery-friendly them but also because they have the oppor- vertiser should ask,” Mr. Sarmenta said. “Because the right insight, ex- hardware device that attach onto a wall or tunity to participate in the universal rewards pressed through a powerful creative, shelf in an aisle. Through the use of a low- program that is built-in to our beacon system," will get you millions. That, I think, energy Bluetooth wireless connection, Bea- said Bingo Soriano, CEO of IDDI, Inc. is what the industry is rich in — the cons can send messages or prompts to smart- Globe Digital Advertising is exploring to ideas. You can see it anywhere, no Graphics by Brian M. Afuang phone users who are within a 5-inch to 200 offer the Beacon technology to some of the matter what your specialization is.” feet radius of the device. Beacons are already partners of IDDI. For more information on He emphasized that the success of an being used in the retail industry to push loy- Beacon technology, contact any of the part- ad or a campaign does not depend on how much it cost but on how well it was planned. alty points, display ads, coupons and prod- ner representatives: Aaron Carreon of Globe “Clients want to make sure and know uct information in-store, but they are also at [email protected]; Raymon Caya- where the money goes, as there are measures poised to transform how event organizers, byab of Mobext at mon.cayabyab@mobext. to everything: from the number of clicks [on a enterprises, and institutions communicate com, or Bingo Soriano of IDDI at bsoriano@ link], [the amount] spent, to how much is earned. with people indoors. iddi-group.com. Market spot, S4/ 8 advt 6/S4 Industry Report Friday-Saturday, September 26-27, 2014 Ad industry watch group ready for ASEAN integration THE Top brands that “Being self-regulated, our advertise on TV IN 2013 By Claire-Ann M. C. Feliciano members have the responsibility Senior Reporter to secure clearance from the ASC,” she said. “In reality, there are still billboards that don’t pass through THE PROSPECT of Southeast the ASC. However, in broadcast, Asian economies becoming a sin- the television networks don’t air gle economic bloc may appeal to anything that doesn’t have ASC industries that are ready to em- clearance.” brace the opportunity, but scare With ASEAN integration, those that are ill-prepared. the Code of Ethics again has to PALMOLIVE Philippine advertisers luckily be reworked to take into account P280,000 - SHAMPOO WITH belong to the first group, having changes in the digital space, Ms. CONDITIONER geared themselves up — early on Marquez said. P300,000 P300,000 — for tighter competition with re- “We review that every two P275,000 - monthly cost of a 40x60 gional players. years. Currently, we are working P300,000 cost of a full-page ft space in one of EDSA’s The industry began prepara- on enhancing the provision on cost of a ad in a leading prime locations. Space tions for the so-called Associa- digital advertisements,” Ms. Mar- broadsheet near the Guadalupe tion of Southeast Asian Nations quez said. “We are even looking at 30-second TV spot bridge can cost up to COLGATE (ASEAN) Economic Community digital provisions of the Interna- SOURCE: OAAP P500,000 TOOTHPASTE 2015 as early as 2012, according to tional Chamber of Commerce, so Illustration by: Samantha Gonzales the top official of the Ad Standards that we are up to the level of global “The change essentially is in [over] how we protect consumers presence of ASC will always be an Council (ASC). standards as well,” she added. the different ways by which adver- when it comes to the Internet and edge, she pointed out. The ASC groups the country’s “Integrating our Code of Ethics tisers and advertising agencies are social networking sites,” said Ms. “It will be more competitive advertisers, ad creators and agen- with international rules will make actually communicating or the use Marquez. but will definitely benefit consum- cies, and the media — all aiming the industry even more prepared of different formats when it comes “On Facebook alone, there are ers because they have now more to ensure that whatever comes for the integration,” she said. to messaging,” said Ms. Marquez. lots of advertising materials be- choices and this will compel local out on TV, radio, print and bill- Digital advertising could be ing put out there which do not go manufacturers to level up in terms boards meet an agreed standard. Going digital more difficult to monitor — an ad- through the ASC. Even the sourc- of improving the products or mak- The Philippine ad industry has The integration could change the vertisement posted online could ing is very difficult as posting can ing series of changes in their prod- Surf detergent been operating on a self-regulated way advertisers sell their prod- change in a matter of minutes, be coming from anywhere in the ucts,” Ms. Marquez said. powder basis for over 30 years, although ucts. Through the years, the way ignoring pre-screening, she noted. world,” she added. Despite the birth pains that Republic Act 7394 or The Con- to promote goods and services “Digital is something new. Currently, the ASC screens an the industry must endure with sumer Protection Act empowered was through paid advertisements We’re trying to understand the be- average of 2,000 application ma- economic integration, “the in- the industry watchdog to come up via print and broadcast. One of havior but it becomes very difficult terials every month. dustry is committed to make sure with a “Code of Ethics.” the essential changes in advertis- from a monitoring standpoint,” Striking a balance between self-regulation will work. We can Advertisers have to remain ing involves the shift to digital, she said. regulation and not undermining share this with our neighbors,” faithful to that code — which has and advertisers are faced with the This leads to yet another chal- creativity is the aim of ASC, Ms. she said. continuously been evolving since dilemma of trying to understand lenge: protecting the consumer. Marquez said. Ad materials should “We also have to try and see if 1974. how the medium behaves and use “Parts of the region, even Sin- be creative and compel consum- what we already have is something ASC Executive Director Mila it to their advantage. gapore, are actually concerned ers to buy the product, but, at the we can integrate with internation- Ariel detergent M. Marquez said advertising in- same time, the ad should be truth- al rules. But, as I have said, we are powder dustries in some Southeast Asian ful and not mislead consumers. already ahead in terms of process economies are being handled by and procedures,” Ms. Marquez the government, while others just INCREASED COMPETITION added. do not have any regulatory body Other challenges that accompany The ASC is batting for the in- at all. regional integration remain. With clusion of a self-regulation work- “I think we are 10 steps ahead more products expected to en- shop at the sideline meetings of of them,” she said in an interview, ter Philippine borders as ASEAN the Asia-Pacific Economic Coop- noting that the Philippine indus- economies bring down tariffs and eration, which will be held in the try’s principles are on a par with trade freely, competition would country next year. those of the United States. heat up. “We are pushing that this “We should be very proud that “Are we really prepared to take will be included because this Creamsilk hair in as far as the region is concerned, on advertising materials or more is important. We met with of- conditioner the Philippines is being looked up content that will be pre-screened ficials from Taiwan, Indonesia, as the champion when it comes to P48 billion P24 billion by ASC? From a structure stand- Singapore and Thailand,” she this aspect,” Ms. Marquez pointed the amount Unilever the amount spent on point, yes,” Ms. Marquez said. said. “We discussed that since out. There will be concerns, she we will be creating the ASEAN advertising various detergents The domestic ad industry has Philippines, Inc. spent for said, over how flexible the ASC community, we want a subgroup to work together to promote com- TV ads, making it the top and laundry aids on television will be in terms of concepts. But that will discuss our existing pliance and bring the standards to advertiser in 2013 in 2013. with other economies’ advertising setup and how it can be adopted SOURCE: KANTAR MEDIA in other countries.” the highest level, she added. Illustration by: SAMANTHA GONZALES industries yet to be structured, the Sunsilk hair shampoo Fish, icebergs and plastic bags:

the first Pinoy CLIO winners this year Selecta ice cream

Ingenious ads featuring ads promoting the use of SM fish, icebergs, SIM card text- Eco Bags, features artworks books, sleeping babies, mosa- of people wading through a ics of plastic bags, and a heart- flood, the images being made warming campaign of families out of plastic bags. The sen- brought together earned Phil- tence “Plastic bags clog drains ippine agencies several hon- and make floods worse” makes ors at the 2014 CLIO Awards. the point of the ad extra clear. Winners in several catego- A campaign that liter- Downy fabric ries were announced piece- ally put its audience to sleep, meal this month, leading up to Pamper’s “ZZZ Radio” by Ace conditioner the 55th CLIO Awards which Saatchi, got a silver in Branded will be held in New York City Entertainment. The campaign on Oct. 1. branded a radio frequency — The “TXTBKS” campaign 99.1 FM — as Pamper’s “ZZZ for Smart Communications Radio”. The channel aired by DM9 JaymeSyfu’s took the nothing but white noise which Grand CLIO in Direct adver- puts babies to sleep. tising. The campaign revolves Edible invitations bagged around telecommunication a silver in Design for TBWA\ company Smart’s lighten- Santiago Mangada Puno. Its Tide detergent ing public school children’s “Koi Fish Feed Invite” for powder load by turning surplus SIM Ayala Land were invitations cards into phone-readable to feed the fish in the lake at textbooks. The campaign also the Ayala Land development won a Gold CLIO in Innova- of Nuvali. The invitations tive Media and a Silver CLIO in The campaign involved secret- Leo Burnett Manila bagged one a giant iceberg which turns out to themselves were made of natural Content & Contact. ly bringing Cebuana Lhuillier of four Golds in Print for “Iceberg” be a burnt down candle. ingredients and featured differ- Meanwhile, Ace Saatchi & customers to personally hand for the World Wild Fund for Na- Lowe Philippines bagged one ent patterns of koi fish printed Saatchi got a bronze in the same over remittance money to their ture’s Earth Hour project. Silver and one Bronze in Print in edible ink. The visitors could category for “Cebuana - Family relatives and filming the reac- The print ad features what at Technique for “Plastic Dudes” then feed the invitations to the Remeet” for Cebuana Lhuillier. tions. first looks like a ship approaching for SM Eco Bag. The series of fish at the lake. Joy dishwashing liquid

SOURCE: KANTAR MEDIA Illustration by: SAMANTHA GONZALES S4/7 Friday-Saturday, September 26-27, 2014 Industry Report

Mad Men, pen faster and in a more signifi- and it’s a lot more sophisticated from S4/ 8 cant way? It’s because, you have than ever before. [But] the young- to understand, out of 100% of er generations have less loyalty First of all, you have to have a liber- our client’s budget, I would say to this or that media. They don’t al arts mind. You have to be inter- 90% immediately goes to media. stick to it for so long. They are a ested in anything and everything. Only 10% [goes] to creative and moving target. You cannot just sort of be inter- production... Therefore, clients ested in the numbers; you just have probably started thinking, “This Q: What award-winning cam- to be interested in everything. You has to be a very specialized service paigns have you been personal- could never tell when something because we want to maximize the ly involved in? I talked to some- is going to come out of the wood- cost efficiency of our media place- body, asking the same question, works and become a factor. 14,122 876 274 ments.” So media independents and he said that he looks at how No. of billboards nationwide No. of billboards No. of billboards were born globally and [later] much [the campaign] has affect- in Metro Manila on EDSA started cascading into the Phil- ed the client. What campaigns Manny Hermosa ippines and all other countries. did that for you? According to the Metropolitan Manila Development Authority, majority of advertising Q: How did Club Media start? billboards in Metro Manila are on EDSA, with the rest located mostly on Osmeña Highway, Q: How big is advertising in MH: I would think it’s when we re- Magallanes Avenue, Sen. Gil Puyat Avenue, C-5, Ayala Avenue and the North Luzon the Philippines as compared to launched Cosmos: Sarsi, Pop Cola, Manny Hermosa (MH): Club Me- Expressway. The number of billboards in the Philippines rose 76.5% in the last decade, from ASEAN? in ’89. That really was unforget- dia started [being] mainly driven around 8,000 in 2004 to 14,122 as of July this year. These are located mostly in provinces table for me. At that time, ’89 was by the major changes happening in near Metro Manila like Cavite, Laguna, Bulacan and Pampanga. Other big cities that have a MH: Ours is small, very small. Our really a relatively good year for the our industry — and that is the for- significant number of billboards are Baguio, Cebu and Davao. budgets for advertising, I would country, because we just came out mation of media independents, [or] think, would be just 1/5 of what they of the Martial Law control of the Number of billboards as of July 2014 / Source: MMDA agencies that are largely focused on illustration by brian M. afuang spend in advertising, and their ad- Marcos era. We were tasked with media planning and buying. So un- vertising cost per spot, for example, relaunching these brands that were like before, where there was a full of a full-page [ad] is a lot higher than really not doing very well against service — an agency would have ours... It’s relatively cheap to adver- Coke and Pepsi... We launched the creative, media, digital, below the tise in the Philippines than in other campaign that somehow, I would line, PR, etc., also broadcast pro- ASEAN countries, for example. like to think, influenced the indus- duction. As early as [the] late ’90s, try on what advertising should be, it started spinning off into separate Q: Why is that so? because we launched a campaign media departments... Production that was very nationalistic, that was now outsourced to producers MH: Our ASEAN neighbors, our was worth a lot of high production and freelancers. A lot of below the Asian neighbors, were largely dom- values — which was not much... line agencies were formed, also inated by very autocratic govern- seriously considered by most ad- stand-alone below the line agen- ments wherein press freedom may vertisers, because [they] would cies. As far as creative [goes], some not be as 100% as what we have try to keep the production cost of agencies are formed largely as cre- here. Which drove the business of TV very low. But in [this] case, the ative boutiques. No media depart- media. Press freedom results in client believed in what we recom- ment, no PR, no below the line, just media. And with that, there’s a lot mended... That’s exactly, I think, a pure creative shop. We call that more stations, radio stations, etc. In what made my career and helped the unbundling of our industry, of my earlier years, when we’d say we my agency, Basic FCB, in ’89. the full service, and the media is want to do a TV plan, we’re talking one of them. So Club Media was about eight TV stations. Now, there Q: Is it seen on YouTube? formed largely driven by our ac- are still eight TV stations, plus ca- quisition of Abbott [as a client for] ble, etc., but it is largely dominated MH: Yes, “Sarsi Angat sa Iba,” media planning. by two networks, GMA and ABS- “Pop-Cola Bilib Sila sa Pinoy” — CBN — which, honestly, my opinion that’s one campaign I would be Q: You’ve been around for 31 is, I don’t think that’s healthy... It’s very proud of. years. In 2010, social media supply of media agencies,... be- menting with that. The other cli- pin down exactly where the target healthier when there is a lot more really picked up. How do you cause it’s more expensive to have ents — Unilever, Colgate — were market is, especially among the competition, not dominated by just Q: What are the things you think have trends changed? a media agency. You have to sub- just watching on the sidelines, so A,B, [and] broad C class. two players, to be brutally honest. should avoid in the industry? scribe to databases to monitor the they were still on full service. P&G MH: Since 2010, doing media be- habits of the consumers, the mass was trying it out for about four or Q: You would save more money, Q: How is Class C so much big- MH: Avoid thinking that every- came a more splintered task, un- media consumption, you have to five years, so the real unbundling, because you’d give [the ad] to ger now? body is like us in Metro Manila. like before [when] you just had to monitor TV stations, ratings pro- I would say, happened in the ’90s people who actually need it. That’s one thing we should avoid. have the traditional TV and print... grams, radio, TV, and print circula- already,... with an old technology MH: They are a lot more mobile Because Metro Manila is just a part Social media, of course,... is grow- tion... There’s a lot of research you called direct marketing or direct MH: Yes, targeted, very targeted, now than ever before. The audi- of the whole Philippines... I’ve seen ing at breakneck speed, and splin- have to buy, so it’s more expensive mail. You would actually send and they started setting up compa- ence was less mobile before. Thir- a lot of ads, as if they’re just going to tering into other media like print, to do a media agency business. mailers — letters — to targeted nies that are just direct mail, away ty years ago, you can just have one the Makati people. and I would say, evolving into digital as well... TV That’s why they’re fewer. audiences based on, well, the old from the full service agencies... but medium, and you’ll probably hit ‘If I’m actually in Davao... will I be into digital, radio into digital, aside post office type of mailing. This then, the advantage of the media most of your target already. Ra- able to connect with this ad, done from the traditional frequency sig- Q: You mentioned the unbun- was before the advent of e-mail. agencies started to gain steam. dio was radio, print was print, TV by an advertising agency or a per- nals that we have been accustomed dling of businesses. When did Back then, it was really more di- So it started happening glob- was TV. Not anymore... The media son who thinks the world is Maka- to. So media planning and buying that start — going from full rect mail. A classic example would ally. At that time, the first one consumption of the consumer is ti? How will that be relevant to became a bit more complicated... service to little houses doing be, I’d be getting letters from to form a media agency was a lot more splintered, and when me?’ I’ve seen a lot of that happen. [This] started as early as 2004, different things? Newsweek, or Readers’ Digest... At Starcomm, because it was driven it comes to print, they also have a It’s sad because that’s a lot of pesos although not in great numbers. that time, the direct mailing agen- by the needs of P&G. Because P&G lot [more] print options than ever being wasted out there. Insights The numbers are happening now. MH: I would think that unbun- cies started happening. Before, said, “Yeah, maybe we should just before. As far as the class is con- that are borne out of Makati... the There are a lot of digital agencies dling started as early as [the] late it used to be handled also by the focus our media requirements cerned, A B, Broad C — yes, there world is not Metro Manila. The out there being formed. That’s why ’80s, when P&G, for example, full-service creative agencies, ad- [on] one agency,” because that is is a growth of the Broad C class. world is the Philippines, and every there is an oversupply of ceative started looking for a very focused, vertising agencies. After that, the a very important part — largely I’d love to confirm that. It actually part of this country has a unique agencies, there is an oversupply of specialized service on media... It database came in, they had more because if you look at the clients, means that they have more access psychographic, has a unique cul- digital agencies — not yet an over- was only P&G who was experi- databases, and they were able to why did the media agencies hap- to other forms of media as well, ture, has a unique demographic.

Digital marketing, from S4/ 2

This way, one knows that the posts are getting attention. If such engagement doesn’t happen, then it doesn’t matter if you have millions of fans. “Likes are not the end all and be all of dig- ital marketing,” said Mr. Lim, explaining that likes are potentials. “What matters is what you do with those likes.”

Skills of a marketer of today “Digital media brings together marketing and data like never before,” said Mr. Pa- lacios. In the past, consumers’ behavioral demographics were based on “surveys and guesswork,” he said, but now one can fine tune an advertising campaign to the actual disclosures of users. On Facebook, users dis- close their birthdays, age, gender, and likes, and this information can help the marketer understand their customers better. Mobile is even taking this data to a new level, said Mr. Palacios, because now advertis- ers can make geo-targeted ads. “I want to target everyone in Ortigas Center who is searching for a gym,” or “I want to target everyone who is interacting with parenting content inside Megamall right now” are some examples of how specific these ads can be, said Mr. Palacios. “The essential skill for the marketer to- day is the ability to understand customers in motion,” said Mr. Palacios, explaining that marketers have to think about what their cus- tomers are doing during the day, where they are, what they are feeling at that moment, and how can the brand be a part of that everyday ex- perience. “Through technology, we can insert ourselves into their lives more intimately than before,” he said. The marketer who best understands such customers will be ahead of the pack. “Who will own the customer?” said Mr. Palacios. “What’s their go-to Web site for shop- ping for item A?” he said. “What’s their go-to site for determining where to go out tonight? What’s their go-to site for beauty advice? Those races are wide open right now. There’s an op- portunity for brands to come in and own it.” 8/S4 Industry Report Friday-Saturday, September 26-27, 2014 Meet the ‘Mad Men’: Manny Hermosa of Club Media Asia, Inc. and Gallardo and Associates JJ Calero of J. Walter Thompson

spanned 42 years, to know what Q: How different is the adver- Guerrero of BBDO — can com- By Joseph L. Garcia Reporter life can be like in the advertising tising scene from when you pete with the best in the world! business. Here are excerpts from started in the business? the interviews. Q: What should new people in THE OFTEN glamorously por- JJC: When I first started, it was a the industry watch out for? trayed, the advertising industry ragtag group. Mostly school drop- is gritty and cutthroat. The mas- JJ Calero outs! The Art Directors — save JJC: Going for the frost rather sive industry churns out adver- Edwina Arroyo — were artists who than the substance — being tisements that present an image Q: What have been the trends were inarticulate. They just did mesmerized with the glitter, of how wonderful life could be if in advertising after 2010? what you wanted them to do. Copy not realizing [that] you have to we begin to use certain products, was generally written by the Ac- give up nights and weekends yet, TV viewers and people driv- JJ Calero (JJC): Since the early count Executive [as this position working to create substantive ing by huge billboards never re- 2000s the trend was already di- was known then]. Only J. Walter campaigns. [Not] getting your ally get to know how these things rected to below the line, but it took Thompson — then McCann when shoes dirty and finding out what JJ Calero are made and the hard work that time in being adapted because it came into the picture in 1964 — the people really think or feel! goes in them. BusinessWorld held those in positions of management had professional writers, mostly

s separate interviews with two re- were the oldies who were not in- Americans. At Thompson, we had Q: How have audiences and a m a n t nowned industry veterans, Man- clined to take on the new media. one American and she trained consumers changed from when h a g o ny Hermosa of Club Media Asia, Even today those who are left rely our writers — the likes of Ines Ca- you first started? n z al Inc. and Gallardo and Associates, on their secretaries to download mayao and Enrie Manalo. It was es top media planning and advertis- their e-mail and print it out for also JWT that first introduced JJC: More or less the same, except ing agencies in the country, and them to read. in-house research [departments] perhaps the C-income class has was a P30-mil- would be a new retired advertising execu- when it hired Manny Garcia, a expanded, but still we have a pyra- lion account… agency. tive JJ Calero, whose London School of Economics mid economic breakout: The AB in storied career graduate, and the son of the own- the [top] 3-5%! The upper C’s up to Q: How stiff was the competi- Q: How stiff was the competi- with J. Walter er of Man G 11, a soap that com- 15% and the lower C’s up to 30%. tion in advertising, especially tion late in your career? Thompson peted with the multinationals. in the Philippines? (JWT) Q: What successful campaigns JJC: It was very, very competitive… Q: How well-placed was the had you personally worked on? JJC: Well, it got to be more and At the time I left, I was already very Philippines in the global more intense, and… it was very old. In ’86, the JWT old school lost advertising industry JJC: It’s very hard to remember interesting, it was most interest- their control to a guy called Sorrell, during your time? these things, there were so many… ing, precisely [because] the Phil- a Britisher, and they took over the [But] one of the things I’m very ippines went from strength to company, and then later on, they JJC: “In the valley of proud about was taking in small ac- strength to strength… You cannot did the same with Ogilvy & Mather. the blind the one eyed counts and then building them up. compare apples to oranges. It’s Two landmarks of advertising in is King!” We were the The likes of Boysen Paint [were] very difficult to try to compare Madison Avenue were owned by kings in Asia except a nothing, but I found in Mr. Ong what was happening then, be- this British gentleman. for Australia and Ja- a very, very nice guy, and I imme- cause the likes of Singapore — in pan. Most of Southeast diately latched on to him, and I the beginning anyway, in the ’50s Q: What advice would you Asian countries were would go all the way to his office in and ’60s — they were still trading give to people just starting in composed of trading Quezon City, just to meet with him, outposts, and marketing had not advertising? houses. The P&Gs and because I was impressed with what crept in to those countries, and Colgates had not [yet] he was trying to do. And, well, look they were handled by old British JJC: If you have two hours and Manny Her branched off from their at Boysen today. I also took on the companies that were in trading. In 33 minutes, I’ll be able to answer m osa prized American domin- likes of Century Tuna when it was Manila and the Philippines, it was that question. It’s not one of those ion, the Philippines. At that still a small account, and Mr. Po different. We were really compet- things that you want to flippantly time, we led the way. Today, we would personally come over to the ing on a toe-to-toe basis with the give, because that takes a whole s am an better American companies when semester [at the University of Asia th are holding our own and some office, to look at the label and cor- a go nz work — like DM9, Ferrer at JWT, rect the elements of the label with they were coming in droves. Every and the Pacific] where I teach… ale s Saatchi & Saatchi, and David the art director beside him, but it time we would blink an eye, there Mad Men, S4/ 7

Market spot, from S4/ 4

There’s a return of investment to everything. half saying they were more likely to buy Volvo You can’t just make things up,” Mr. Sarmenta trucks and in a third already inquiring about it. said. “Social media is powerful because con- “You have an old action star and you have sumers feel more powerful [using it].” a song that is out of date, and when you com- bine it, it’s like a Tarantino movie,” explained REGULATIONS Bjorn Engstrom, one of the creative executives Advertising, being a creative industry, enjoys quoted in the article. “You combine two things, freedom of ideas — up to a point. But before a and suddenly it works.” production ad is screened, it has to get clear- Another successful ad is “Dumb Ways to ance by the Ad Standards Council (ASC), which Die,” a public service announcement of Metro gives the go-ahead for production, printing, Trains Melbourne and McCann Melbourne etc., or disapproves the material, depending on — a video with animated characters dying in the standard, guidelines, and code of ethics. patently “dumb” ways with a catchy song in the Mr. Sarmenta explained that for background. claims such as ”Number one!,” “[The objective was] to stop people from brands would need substantia- getting killed around trains and tion. Meaning, there has to be that’s it,” Mr. Sarmenta said. a study done by a re- The video, which was re- search organization leased in the latter part of to back up the claim, 2012, now has more than 88 or from which the million views and has spawned claim is cited. mobile games. It also won the “So no one can just Cannes Gran Prix. And the best go around claiming part was that, according to stuff. Now, the ASC’s Metro Trains Melbourne, role is to ask: where there has been a 21% reduc- is the substantiation of tion in the number of train this claim? What makes accidents since the video was you say that? Then there are guidelines, released. of course, as to how it should be said in “[It was] successful in terms the ad.” of its results, successful in terms One recent ad which perfectly mar- of its creativity, [and] creativity ried the right insight and a powerful led to results. I don’t think you’ll creative was last year’s “Epic Split” of Volvo ever see trains the same way again,” Mr. Trucks and its agency Forsman and Bodenfors. Sarmenta said. The ad featured action star Jean-Claude Van Locally, he cites Saatchi, of course — the Damme doing a split between two 18-wheelers Cebuana Lhuillier “Re-meet” ad launched while Celtic singer Enya’s “Only Time” played last year and featuring Coco Martin, in the in the background. company of customers getting remittances David Griner, in his article last year in Ad- from relatives abroad. That these relatives week.com, “Undivided attention: how epic split were the ones handing over the money was a became the buzziest in Cannes,” described nice touch — the genuine reactions during the the ad as “a testament to boldness, blue-sky unexpected reunions were caught on film. creativity and willingness to have faith in your The ad won the Silver and Grand Lotus creative vision even when it sounds patently Roots Awards at the 2014 Ad Fest in Pattaya, ridiculous.” Thailand. The video went viral, garnering more than “The target market is left with a warm feel- 75 million views on YouTube. It also inspired ing for Cebuana Lhuillier, luring patrons to parodies and won the Grand Prix of the Cannes continued loyalty, or even better, bringing in Lions Festival of Creativity in 2014, together new clients for its myriad of remittances and with the “Sorry, I spent it on myself” Harvey other services,” Nanette Franco-Diyco wrote Nichols ad, among other awards. in her column for BusinessWorld on May 16, But the true measure of its success would 2013. be if it managed to catch the interest of truck “It’s a real ad. It just humanized something companies, and according to Volvo, in the that was so cold — money. This whole transac- Adweek article, a survey of more than 2,000 tion is important to millions of Filipinos. It truck owners and buyers resulted in almost means a lot,” Mr. Sarmenta said.