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Raising the bar on Philippine advertising

(Translation: Stop bad ads!)
By Willy E. Arcilla
Inquirer
Last updated 05:03am (Mla time) 06/29/2007

(The author recently returned to the Philippines after a career spanning 22 years of working around the Asia-
Pacific region for various multinationals and Philippine firms engaged in the FMCG industry. He holds a BS
Business Administration degree from the University of the Philippines' College of Business Administration and an
MS Industrial Economics degree from the University of Asia-Pacific-Center for Research & Communications. He
was a recipient of the PMA Agora Award for Marketing Excellence in Asia-Pacific in 2000).

MANILA, Philippines -- Anyone engaged in marketing and advertising -- and even in business -- must have heard
of the famous quote, “Half of what I spend in advertising is wasted, and the trouble is, I don’t know which half!”

The quote was from a successful American businessman named John Wanamaker who was born in Philadelphia,
Pennsylvania, in 1838. He pioneered the concept of the department store and introduced bold ideas (even for the
present day) such as “One Price. All Goods Returnable!”

He was considered the “Father of Modern Advertising” for having printed the world’s first-ever copyrighted store
advertisement and introduced the price tag, thus eliminating the need for haggling.

When he died in 1922, his estate was worth $100 million, which in today’s value would have made him one of the
world’s richest men. It’s fair to say that he must have known what he was saying.

Today, practitioners of advertising and marketing together with research specialists have developed better
measurement tools to evaluate the impact of ad spending that would have helped Wanamaker determine which
half of his advertising was being wasted. But there remains a big opportunity for practitioners to maximize “bang for
the buck” and cut if not eliminate wastage.

In the Philippines, total advertising spending has been estimated at P150 billion in 2006, roughly three percent of
the gross domestic product. If we assume half is wasted, that amounts to P75 billion.

That amount is enough to wipe out the government’s projected fiscal deficit of P63 billion this year, or build one
million homes for the poor under the Gawad Kalinga movement (at P75,000 per house).

Can’t afford

The point is simply this: We can’t afford to waste scarce resources, including advertising spending that could be
used for more productive activities.

In my career, I have had my share of world-class, good, mediocre and bad advertising. But I have always believed
that all advertising must be excellent, in the same way that businesses commit to produce only excellent quality
products and services.

A business enterprise depends on the impact of advertising to generate incremental revenues. This is why
practitioners of advertising have a serious obligation and should have a sense of mission to deliver effective ads.

We have seen how outstanding introductory ads built new brands into virtual overnight success stories and how
great campaigns crossed boundaries and endured the test of time. We have also seen, sadly, how tons of work
and piles of money were wasted in bad ads.
Creating impact

There have been many textbook definitions of effective advertising, but I would like to offer one from my own
experience.

Excellent advertising is that which accomplishes its desired consumer response at the least possible cost and in
the fastest time possible it takes for the campaign to create an impact.

In the Philippines, we have marveled at how the strategic thinking and creative discipline of the leading agencies in
the Association of Accredited Advertising Agencies (4As) like McCann-Erickson, J. Walter Thompson, Leo-Burnett,
Saatchi, etc. have successfully built some of the country’s legendary brands over the years.

Impressed

We were also impressed by the boldness and audacity of agencies like Campaigns (and Grey), the brilliant out-of-
the-box work from BBDO-GO, and the creative-cum-media breakthroughs of O&M. Now, finally, Y&R has won for
us the elusive and much-coveted Golden Clio, the country’s first, for Soroptimist Malaysia

But the question remains: “How much of the P150 billion in advertising spending has really been effective?” I’m
certain that a poll of members of the Philippine Association of National Advertisers and even of the 4As would
show there is truth and relevance to Wanamaker’s nearly 100-year-old statement.

The difference is, that over the past century, we are now in a better position to judge which ads work and which
don’t. The issue today and moving forward is not just how to get better for some of the work, but how to get better
for all of the work and all of the time.

Arguments

The arguments for eliminating bad advertising are compelling, and here are 12 of them:

• They fail to achieve the objective of generating incremental revenues.

• They waste the entire cost of the production process -- from creative to execution.

• They waste the monumental cost of media spending.

• They add to the competitive clutter.

• They become part of the advertising stock or industry spending that forms the baseline for future media spending
and the wrong justification for higher budgets.

• Which in turn worsens clutter, making it even harder for advertising to work.

• This in turn causes consumers to complain of too much advertising, lose interest and trust in advertising
hyperbole, causing them to switch off, zap or surf.

• They waste company funds that could have been used, say, for improving product quality or raising staff salaries.

• Which in turn causes management to lose faith in agencies and in advertising itself.

• Emboldening the trade to demand higher listing fees, discounts and allowances.
• Forcing management to increase their BTL spending that produces illusory short-term gains, has limited scope
and ability to build sustainable brand strength.

• Thus giving rise to alternative vehicles like BTL agencies, events management, etc. which don’t have the impact
or the efficiencies of strong advertising on mass media, thus further diluting the already stretched A&P budgets of
advertisers.

The best motivation for producing and airing ONLY outstanding advertising is clear. It maximizes revenue at
minimal costs, which is the classic definition of how to maximize profits. It also reduces the clutter in the airwaves,
broadsheets, and outdoor.

Upgrading quality

So how do we help upgrade the quality of our advertising? Here are 12 suggestions.

• Advertisers must demand only world-class excellence from their ad agencies.

• Advertisers can use award-winning ads of competitive agencies as the new benchmark for their own agencies as
a concrete example of higher expectations.

It may be hard for incumbent agencies to accept, but ultimately, the best agencies will rise to the creative challenge
and deliver, if not exceed client’s expectations.

• Ad agencies must commit only to excellent ad campaigns and reject mediocrity.

• Advertisers should ideally test before production and airing to reduce the risks.

• Both advertisers and agencies must measure the business impact of advertising.

• Advertisers must reward agencies for results (i.e., pay for performance), not just pay a fixed fee or a media
commission that simply encourages higher spending. If great creative work can require less media spend, then
what is the incentive for ad agencies to develop great work if it might reduce their media commission?

• Advertisers and agencies must demand and reward not just effectiveness, but productivity, i.e., maximum results
at minimum cost (production + talent + media). The ability to do more with less is the true test of creative genius.

• Advertisers and ad agencies must work together to train and develop creative talent.

• Ad agencies must track their “statistics” just like in the world of pro sports, (e.g., batting averages or field-goal
percentages) to measure performance and level up.

• Advertisers and ad agencies must share best practices from their respective organizations, history and around
the world to learn from each other and improve.

• Advertisers and ad agencies must humble themselves and admit to their own mediocre or bad ads, and conduct
post-mortems not to “witch-hunt” but to learn what didn’t work.

• Do no harm to existing campaigns that have been proven effective. Don’t fix it if it ain’t broke, unless you have
consumer evidence that a new campaign will take things higher by enhancing brand saliency and strengthening
consumer loyalty.

The author can be reached for comments and suggestions at willyarcilla@yahoo.com.

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