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Advertisers cut budget for TV ads

By Daxim Lucas
Philippine Daily Inquirer
First Posted 20:24:00 07/08/2009

Filed Under: Advertising, Television, Economy and Business and Finance, Media

MANILA, Philippines—Some of the country’s largest corporations are shifting their advertising efforts to media platforms perceived to be more cost effective during times of economic difficulties, the results of a recent study showed.

At the same time, the study conducted by Nielsen Media Research showed that Metro Manila’s commuter rail system stands to benefit from the shift in attitudes among advertisers seeking to maximize their marketing budgets.

According to the study, some of the country’s largest consumer goods manufacturers have shifted the bulk of their advertising resources to radio, at the expense of their television ad placements.

Fast moving consumer goods giant Procter & Gamble, for example, raised its radio advertising minutes by 169 percent in 2008, as the global economic crisis unfolded, but reduced television ad minutes by 17 percent.

The local unit of its rival Unilever made a similar shift, reducing its television ad presence by 5 percent last year, but increasing its radio ad presence by 44 percent.

Food and beverage giant San Miguel Corp. took a similar path, cutting its television presence by 66 percent and compensating with an 11-percent hike in radio advertising during the same period.

Last year, pharmaceutical firms Unilab and Wyeth reduced their television ad minutes by 8 percent and 20 percent, but raised their radio ad minutes by 41 percent and 27 percent, respectively.

Nielsen executive director Jay Bautista said the changes were prompted by cost efficiency concerns, especially since radio advertising is generally cheaper, with less listeners inclined to switch stations during commercial breaks compared to more fickle television viewers.

“Plus, there’s also the element of the increasing clutter in television,” he said, explaining that some advertisers feel their messages were getting less traction due to the sheer number of television ads.

The study showed, however, that other big-budget advertisers retained their strategies in 2008 despite the onset of the economic crisis.

These firms that stood steadfast include Smart Communications Inc., Johnson & Johnson, Nestlé Philippines, Jollibee Foods Corp., Coca-Cola, Mead Johnson, Del Monte and herbal supplement maker HNC.

One notable big-ticket advertiser that downsized its media placements in 2008 was Globe Telecom Inc., which reduced television ad spots by 24 percent, print ad spots by 52 percent, and compensated with a 24-percent hike in radio ads, according to Nielsen.

According to Bautista, however, advertisers have so far left out so-called “out-of-home” media from their strategies, despite the proliferation of billboards along major thoroughfares.

In particular, advertising on the Metro Rail Transit (MRT) and Light Rail Transit (LRT) lines remain in its infancy despite the potential.

Bautista said that of the P170 billion spent for advertising across all media forms in 2008, only 2 percent was allocated for out-of-home methods. Of this amount, only 20 percent—or about P680 million—was allocated to advertising on the three MRT and LRT lines in Metro Manila.

“The potential for this industry is very big,” said Bing Kimpo, vice president of Trackworks, which is a partner in the Nielsen study.

The study also found that MRT riders are predominantly white and blue collar workers, while those that frequent the two LRT lines are either students or entrepreneurs. Nonetheless, both groups exhibited a predisposition to high consumer spending patterns, making them a rich target for advertisers, Kimpo explained.



Copyright 2009 Philippine Daily Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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