Radio biggest gainer in ad spending—Nielsen
abs-cbnnews.com | 07/24/2008 9:32 AM
Printer-friendly version | 
Send to friend | 
Share your views
By LEILANI CHAVEZ
abs-cbnNEWS.com
With the continuing increase in the prices of basic commodities and with consumers becoming more deliberate about of what to buy, the advertising industry seems to be facing a low point. But the latest study from the Nielsen Media Research Company proves otherwise – the advertising industry is stable.
Jay Bautista, executive director of Nielsen, said that there is in fact an increase in media spending and spots for television, radio, and print, compared to last year.
For the first half of 2008, radio experienced the biggest increase in media spending with 26%; surpassing the increase in television (13%) and print (12%).
Young market
According to data from the National Statistics Office, 61% of the country’s population are 29 years old and below and 29% or 26 billion Filipinos are aged seven to 19. This makes majority of consumers relatively young.
The Nielsen study on kids showed that 99% watch television during six to eight in the evening on weekdays and weekends. These children are mostly in grade school.
Online habits show that only 26% of kids have access to the Internet, 17% of these users typically use it to play games (17%) and do school research (6.3%). Eleven percent or 650,540 kids have their own cellphones, 15% have their own CD player or discman, 10% have their own desktop computers, and 13% have their own Gameboy.
Radio increased by 14 % in advertising spots, while television only increased by 3% and print, 1%.
This rise in radio media spending, according to Bautista, is not surprising. He said that television has already reached the maximum number of ads allowed for a certain program, leaving more space open in radio.
He also added that the number of radio listeners continues to increase because of technology. Ad placements are also cheaper in radio compared to television.
Big three
Despite the sudden drop in tobacco advertisements last year, data from the study show that advertisements from beverages, food, and pharmaceuticals are keeping the industry afloat.
Significant increases in ad spending are from food (38%), pharmaceuticals (47%) and beverage (53%) industries. The personal care industry, which had always been a major player in adspend has only increased by 9%.
Unilever Philippines is considered the top advertiser with a 15% increase in adspend and a remarkable 125% increase in spots.
Herbs and Nature Corporation, a new company that primarily sells herbal products is a new major ad placer with an adspend that increased by 157% and spots at 137%. Coca-Cola Bottlers Philippines had a 185% increase in adspend and a 557% increase in spots.
Jollibee Foods Corporation increased by 116% in spot commercials while San Miguel Brewing Group increased by 108%. Del Monte Philippines has aggressively increased its spots by 491%.
In the name of advertising
In the over-all media spending, television continues to have the biggest share of 76% while radio and print only gets 17% and 7% respectively.
Even though there are limitations to the length of ads in a certain program, advertisers are selling their products in television by means of product placements.
Based on published rates and actual airing time in major networks ABS-CBN and GMA, the cost is estimated to be P6 billion for three months of the second quarter alone. This amount is almost 10% of the total adspend for television in a year.
Baustista claimed that product placements are even more effective than ads placed in commercial gaps. "Viewers tend to switch channels during the [commercial] gaps. With product placements, viewers are left with no choice; especially when products are included in the dialogues of the characters."
Alternative media
Bautista also added that there is an increase in use of other forms of media, especially since more and more people are always out of the house. This mobility has prompted advertisers to shifting from conventional forms to other media such as billboards, placements in mass transports, and LCD TVs.
An example is the declining ad placements of telecommunications industries in television, radio, and print. Bautista explained that they shifted their strategies and now advertises more through collaterals.
The downside, according to Bautista, is that these advertisements, after some time, are overlooked by consumers.
Stable now, critical tomorrow?
Another possibility why the advertising industry is stable in the first half of the year is due to the growth in last year’s economy. "Ad contracts are usually made for a year or six months," Bautista added. Even if there is increase in the costs of goods, companies cannot suddenly pull out advertisements.
Despite this, Bautista said that the next half of the year, especially the next three months, is critical for the advertising industry.
"Ads are usually strongest during the second and third quarters of the year. If there is a slide in the ad placements in the next three months, the decrease will probably go on for the rest of the year."
The recent study also compared the advertising situation this year with that of 1997 where the advertising industry was at its worst state. Television media spending slid by 4%, radio by 8%, and print, with a high 14%.
The advertising spots also decreased by double digits ten years ago. But this was abated by government ads for the centennial year and election campaigns.
For this year though, the advertising industry will have to depend on private companies.
