Business confidence has perked up under a new Philippine
administration, but it may not be enough to push marketers into
advertising.
Many businesses had adjusted advertising spend in the last quarter -
some even putting expansion or launch projects on hold - when corruption
allegations surfaced against former president Joseph Estrada.
The scandals eventually toppled Mr Estrada's government on January 20,
three months and 11 days from the time the damming revelations were made
public.
"All this has had inevitable knock-on effects to advertising," according
to MindShare.
While the country had the third highest adspend growth rate in Asia in
1999, at 15 per cent, full year figures for 2000 were expected to show
adspend growth below media inflation, MindShare reported.
Now, two issues - an election in May and the ability of new President
Gloria Macapagal-Arroyo to breathe new life into the fragile economy -
are likely to keep marketers on the sidelines for a while longer.
For the first time in 15 years, candidates slugging it out for public
office will be able to advertise following the signing of the Fair
Election Act on February 7.
The sheer number of candidates emerging for local and national seats is
expected to translate into a windfall for media properties. But
profligate spending by politicians could leave little room for other
advertisers, especially as media owners look to recoup revenue
shortfalls after last quarter's crisis.
McCann-Erickson head of media Venus Navalta discounted this, insisting
that media owners would always give preference to regular
advertisers.
"Only left-over advertising space will be given over to political
advertisers," she said.
At press-time, 24 candidates had emerged for just 12 senate seats up for
grabs. Many more are tipped to fight it out for congressional and
mayoral office.
Although there is a ceiling on how much candidates can spend on
advertising, few expect an audit by any government agency, including the
Philippine Monitoring Service, to ensure these limits are adhered
to.
Given this, unchecked spending by political aspirants will of course
raise the clutter quotient significantly as campaign dollars flow
through tri-media options.
"If clients historically find it effective to spend on advertising
during the first two quarters, then it is not to their advantage if they
suddenly stop now," said Ms Navalta.
"However, we have advised a number of our clients to start spending
early in anticipation of the election clutter, even if the amount of
airtime and print space to be used by each political candidate is
regulated."
Closer to the elections, advertisers will find that it makes better
business sense to lie low. Philippine elections are usually energetic
affairs that keep locals riveted by the campaigning antics of their
politicians.
The other cloud on the short-term horizon is the new president's ability
to repair the damaged economy.
Compared to her predecessor, President Macapagal-Arroyo is more than up
to the job; she has a Ph.D in economics.
"However, from a marketer's point of view, she needs to make
improvements fast," according to MindShare. "The local economy is in
such a fragile state that the current outlook for the advertising world
is far from rosy, at least in the short term."
Although the peso has clawed its way back from the historic lows
breached during the presidential crisis, economic growth remains
negligible and public debt has never been higher.
"In the short-term, the outlook is not great - the stalled economy will
not fire up overnight and the rest of 2001 will be quite tough,"
reported MindShare.
For bruised media properties, the only relief will come from an election
spending boom.
ABS-CBN, the country's leading broadcast network company, expects the
political advertising windfall to push revenues to staggering
levels.
"The impact is something to look forward to," said Ms Patricia Daza, the
station's director for corporate communications and public
relations.
The going rate for a 30-second exposure is expected to cost a candidate
120,000 pesos prime-time and between 70,000 and 80,000 pesos on regular
programming.
As the cheapest of the tri-media options, radio - many of which are
owned by by broadcast stations - is seen as the preferred medium in this
archipelago nation.
A 30-second radio slot costs just 10,000 to 15,000 pesos compared with
the next preferred medium, print, at 118,000 for a full page black and
white ad, or 10 per cent more for colour.
- Additional reporting by Lee Chipongian, Manila.
