Philippine tycoon to set up media buying company

Plans are underway for Philippine tycoon Lucio Tan to set up his own media planning and buying company. True to Mr Tan's low-key business style, the plan has yet to be formalised, although the group, in a sense, is already practising media buying via chief media coordinator Luis Guison. Mr Guison directly negotiates with suppliers, particularly television networks and radio stations, to get discounted rates for the ad placements of the myriad firms under the Tan conglomerate. The Tan group has interests in airlines (Philippine Airlines), banking (Allied Bank), brewery (Asia Brewery Inc), cigarette manufacturing (Fortune Tobacco Corp), hotels (Century Park Hotel), liquor (Tanduay Distillery) and a host of other businesses. Mr Guison, advertising director of Basic Holdings Corporation, which manages several Tan companies, pools together the advertising budget of companies under the Tan group and with this single though "huge" budget (industry players estimate it at about one billion pesos) negotiates for the best airtime rates. The negotiated rates are then farmed out to the marketing departments of each of the Tan companies for implementation. Mr Guison said their advertising agencies, for the time being, still do the actual "buying" as per the Tan group's rate book and they still get the full commission. Mr Guison did not give a timetable as to when they expect to formally set up the planned media planning and buying company. He acknowledged that this was indeed the plan and that they are already in the "first stage". The current wholesale approach of the group translates into substantial savings although no figures were available. "We benefit from the synergies of the group. In the past year our approach has been especially beneficial because of the rate increases" by media outlets, Mr Guison told MEDIA. Another benefit from this pooled media buying is that even the small firms under the conglomerate, such as Nuggets Food, which have a modest advertising budget, can benefit from the discounted rates. "If they went through the normal route they would get the higher rates" since the media cost would be based on volume, Mr Guison said. The Tan group has a number of mass market brands which benefit from TV and radio advertising including Hope, Winston and More cigarettes, Beer na Beer and Tanduay Rhum. "In the order of priorities, TV would be our primary medium, followed by radio. Print comes in at a distant third," Mr Guison said. The reason for this is sheer numbers, he said, with TV and radio in the Philippines reaching millions of viewers nationwide with newspapers and magazines having a limited reach.

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