FEATURES: Confidence up, but Philippine firms hesitate

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