Ad spending up but second half downturn likely

MANILA, Philippines - Advertising spending for the first half of the year swelled by 15% to P80 billion, driven by aggressive media expenditures for health supplements and soft-drinks, Nielsen Media Research on Wednesday reported. Revenues, however, will likely slow for the rest of the year as rising inflation and weak overall economic sentiment take their toll, the market research group told a briefing. Nielsen advised media organizations to brace for the worst, saying that second semester advertising spending might fall to just P30 billion -a level last seen during the first half of 1998 in the wake of the 1997 Asian financial crisis. "If the trend continues, and if inflation continues to increase, we can see a double-digit decline in total media spending in the months ahead," Nielsen Media Research executive director Jay G. Bautista said. To cushion the impact, he urged television, radio, and print media companies to be more creative in engaging advertisers. "For example, media organizations could tweak their content to suit the advertiser’s target audience," Mr. Bautista said. Media outlets could also consider product placements as way to encourage advertisers, Total advertising spots for the first half of 2008 jumped by 11% to a little under four million, supported by a 14% increase in radio advertising to almost three million. TV continued to corner the biggest share at 76%. Radio was a far second with a 17% share, and print took just 7%. Radio advertising minutes rose by 6% to about 1.3 million as companies shifted to more cost-effective media amid rising TV rates. TV advertising minutes were almost flat at about 200,000. A 30-second TV commercial, said Mr. Bautista, now costs an average of P300,000, compared to P1,000 for a 30-second radio spot. By product categories, personal care accounted for the biggest share, or 2%, of first half advertising spending. Mr. Bautista, however, noted that the biggest increases came from the beverage and pharmaceutical sectors. Beverage companies spent P9.1 billion, up by 53%. He said the bulk of growth in beverage advertising companies came from Coca-Cola Bottlers Phils., Inc., which aggressively promoted new products like Coke Zero. Coca-Cola’s advertising spending went up by 185% to P1.1 billion during the first half. The advertising spending of pharmaceutical firms, meanwhile, expanded by 47% to P10.2 billion, driven by health supplement manufacturers. Herbs and Nature Corp., distributor of supplements like Fitrum, Liveraide, and 4G, barged into the list of top advertisers, outspending, at P1.2 billion in the first half, multinationals such as Mead Johnson Philippines (P897 million), and Wyeth Philippines, Inc. (P891 million.) But the top advertiser remained multinational Unilever, which spent a little over P9 billion. Rival Procter and Gamble stayed in second. Rounding out the top five were Nestle Philippines, Inc., P4.6 billion; United Laboratories, Inc., P4.5 billion; and Colgate-Palmolive Philippines, Inc., P4.1 billion. The Nielsen study was based on published rate cards. It covered 17 free-to-air and cable TV channels, 116 radio stations, 26 newspapers, and 54 magazines. - BusinessWorld