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. Lim. 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.