On the face of it, nobody would disagree that this has been a lousy
year for advertising, and it may get worse before it gets better.
The first ill winds started blowing with the dotcoms crashing. Then the
slowing of economies surfaced. Finally, one cannot gauge what the full
impact of September 11 will be.
At times like this a little perspective goes a long way. When I first
came to Asia in 1981, the US was in the midst of a long recession. Since
then we've had other significant downturns in Asia: in 1986 (Singapore)
and regionally in 1991 and 1997. Yet during these two decades,
advertising turnover has grown expontentially. Increasing regional
prosperity has driven this upwards, but it has also been stimulated by
the industry's ability to constantly explore new markets and be smarter
about the ones that we are already working in.
We've all seen the arguments for advertising in a recession. Here's
another angle. In many ways, there are parallels between investing in
advertising and investing in stocks. When you buy advertising in a
recession, it is like buying a mutual fund in a bear market - you get
more value than if you were doing the same in a bull market. Think of it
as what investment advisors call "dollar cost averaging". Dollar for
dollar, the advertising builds more value for your brand when the
competitive noise level is lower. It is an opportunity to improve share
which will be even more valuable when times get better - as they
inevitably will.
The collapse of dotcom mania, which was partly based on the realisation
that many new media companies were not founded on the principle of
offering deliverables and a return on investment, have also allowed the
so-called traditional or blended advertising media to underline their
accountability in terms of reach and impact. Anyone who invests in
advertising wants to see value for money, no matter what medium they are
using and it explains why we are seeing more integrated packages of
advertising that move seamlessly between broadcast, print and
online.
Broadening our base of business has also provided some insulation from
the present downturn. A decade ago, the nirvarna for cable and satellite
TV advertisers were the 'AB' homes, the niche market of well-off and
well-educated business professionals and their families who were reached
with pan-regional campaigns. They are still attractive today, but local
market opportunities to sell FMCGs and other products that are specific
to a country now provide equal returns.
No one should just wait complacently for the good times to roll again,
nor should we bunker down thinking there is little we can do but sit out
the tempest. As the saying goes: "The best defence is a good
offence".
All of us need to translate core strengths to clients, innovate
applications of our own media products, and prove new ways to add value.
That's how to lead your way through challenging times."
Steve Marcopoto, president and managing director, Turner Broadcasting
System Asia-Pacific.
