CUTTING ADVERTISING WILL ALSO CUT SALES GROWTH

by Roger Pe

You wouldn’t want that.

While everyone seems to be cowering in fear because of recession, this chocolate brand defied gravitational pull of business pessimism – prompting Ad Age to headline last week: “Boost in Ad Spending Pays Off for America’s Chocolate Favorite.”

And they have figures to show: a 4th quarter income and yearly earnings up by 51% to 82 million dollars.

According to Ad Age, the company ended 2008 with a “reasonable momentum,” attributing this to “increased advertising, consumers trading down from premium chocolate and price increases.”

Should one advertise during a recession? Of course, yes. The more you retreat, the more sales will recede. The more you cut back, the more competition will attack.
As they say, “when the going gets tough, the tough doesn’t skimp on ad budgets.”

From the experts, here are 3 nuggets of wisdom to ponder:

“The first reaction is to cut, cut, cut, and advertising is one of the first things to go. As companies slash advertising in a downturn, they leave empty space in consumers’ minds for more aggressive marketers to make strong inroads.” – Peter Fader, Wharton University, Marketing Professor

“A great deal of evidence suggests that it is not a good idea to reduce marketing spend during recession in order to hit financial targets. Doing so may leave your brand in a less competitive position when the economy recovers.” -Nigel Hollis, Chief Global Analyst of Millward Brown, one of the world’s leading research agencies.

“If someone tells you they are cutting back their ad budget because of a recession, ask why they advertise in the first place. Business history books are full of examples of companies that maintained or increased their ad budgets during recessions and found that at recession’s end they had leap-frogged their competitors by wide margins.” – Josh Gordon, author “Motivating Consumers in the New Economy.”

A similar case study happened to a well-known beverage brand in the Philippines. All it takes is to look at its media-spending pattern. Look where it is now.

*****************


*********************

WHAT IMPACT DOES A 'RECYCLED' AD LEAVE YOU?

By Roger Pe


The movie “The Postman Always Rings Twice” was remade not twice, but four times. Which brings us to ask: which one of the four did you like better and which one gave you much impact - the one that starred Jack Nicholson and Jessica Lange, or the 1946 film noir version?

For those who’ve seen the original and succeeding remakes, Cherie Gil would probably essay: “You’re nothing but a second rate, trying hard copycat!” again. For those who’ve seen all four, the inevitable will happen. All will be pitted against each other and people will always notice the enhancements given to the original story. For those who missed the first three, ‘ownership’ will always go to, who else?

Whatever it is, people will always choose the original. The impact it created when it made the first splash will always resonate for a long time.

What is a Remake? Wikipedia defines it as a material, which uses an earlier material as the main source of the subject. It is different from Re-interpretation, as most Batman and Darna movies are done. Which takes us to the next question: Is a Remake a tribute to the original? Or producers are just running out of materials and want to capitalize on the success of the original?

It is interesting what Google says about famous Remakes. Get ready for some measures of tongue-lashings:

“Artistically and economically, Hollywood hasn’t learned that remaking classics for tv or theatrical release is dumb and never works. Not at the box office, nor does it enhance the reputation of actors and directors in comparison with the legendary cast of the originals.”

Google mentions “High Noon”, “Gone With The Wind II”, “Sabrina”, “The Thomas Crown Affair,” “The Wiz” among others. The latter was even called “the bomb of all bombs” and the site throws another dose of acid: “Too many remakes are done by half-baked hustlers trying to cash in on monumental successes of the past with pale imitations.”

“For some sentimental, and maybe even more substantial reasons, people always tend to like the original. Remakes always suffer the same fate - being compared to their predecessors and tend to evolve their own genre – the Mother of Duds. Either they languish in whimperville, hit the ground with a loud thud or miraculously redound back to life,” a colleague says.

But we all know that such is not the case when it comes to exceptional prequels or sequels. Harry Potter, Transformers and Ice Age movies have recently burned the cash registers and emitted tons of money.

But what about tv commercials?

As in movies, comparison will always be on hand: Did the Remake measure up? On BusinessWeek, David Kiley, wrote: “I like it when an advertiser tries an update of an old idea provided the idea and execution is good. Consider what BMW has done for Mini. I even like the creepy-looking “Burger King” which has turned up in BK ads this year. But Coke’s remake of its classic 1971 ad “Hilltop”, a.k.a. “I’d Like To Teach The World To Sing,” redone as “Chilltop” for Coke Zero, left me cold.”

In the commercial, the guy leading the song raps into the original song from 1971, and instead of a hilltop, it all takes place on a Philadelphia rooftop.

Riley continues to rant: “The thing looks like some exercise in hipness as conceived by some older middle-aged ad and Coke execs. I got a whiff of the ads Buick tried to pull off a few years ago behind the tagline, “It’s All Good.” The people in the ads look like they are putting on a glee-club concert instead of the edgy ad it should be.”

Remakes: Are they homage, plain recycling or interesting? You decide.

GCap, Grey Milan

Cadbury Halls Throaties, DDB New Zealand

Finansbank, DDB Istanbul

Lowell, Longplay 360 Sao Paulo

13th Street, Jung Von Matt Berlin

Levi's, Wieden & Kennedy Portland

Midea, Firstell Communications, Shanghai

Tang Da Ren, TBWA China

Penguin Books, Saatchi & Saatchi Malaysia

HEGARTY'S BOMB

BY ROGER PE

Campaign’s latest article on John Hegarty drops a bomb. Hegarty, chairman and worldwide creative director of Bartle Bogle and Hegarty, blasted the ad industry by saying, “I have seen an enormous amount of advertising that’s rubbish – that’s insulting to people’s intelligence and does not engage them.” Log on to www.campaignlive.co.uk and take a look.

Speaking during a BBC World Service debate, Hegarty responded to a question about the number of ‘rubbish’ ads: “90% of creative work fails to be engaging and enduring.” In the same debate were Sir Martin Sorell of WPP, Maurice Levy of Publicis and Piyush Pandey, who adopted a downbeat attitude about the chances of a speedier global economic recovery.

Wonder how these ads Hegarty is referring to, are turning people into ‘couch potatoes’. Some people sit infront of the boob tube to watch tv commercials over and over and to spot latest ones for them to spread by word of mouth. Lately, people are watching HBOs and inane soap operas, shrugging off inane tv commercials. We dread the day when people become couch potatoes for horror movies.

YES, POTATOES CAN STIMULATE THE PHILIPPINE ECONOMY

By Roger Pe


How bad is your Afritada or Caldereta without them?

Without potatoes, Filipino dishes that have Spanish influences may have that rich, delectable sauciness but lack one important thing - body.

The good news is, potatoes do not make you fat.
The better news is, they’re cholesterol-free.
The best news is, they can fatten your income and keep bakeries’ business body and soul together.

How far can commercial bakery operators increase productivity and income poundage? Get up from your couch. Yield in to “Cash Potato.”

At the Philippines’ World Trade Center, World Baker’s Fair sparked a new vigor to Philippine economy by unveiling its fifth edition to capacity crowd.

The most important international showcase for bakers and its affiliate industries (manufacturers of ingredients - canned and raw materials, owners of restaurant and café services, packaging and training course providers, makers of ovens, ice cream, pasta, confectionery, cafes and patisserie equipment among others), unraveled a world of new marketing possibilities that could modernize how Filipinos in these fields operate.

Popular among exhibit goers was a little corner put up by United States Potato Board, a non-profit organization representing around 4,000 potato growers in the U.S.

Celebrity Pinoy chefs Gene Gonzales, Heny Sison, Jill Sandique and Thad Gayanelo each had a day full signing autographs for admirers as they spoke about yummy delicacies made from USPB dehydrated potatoes. Popular tv host Chef Heny dished out Pinoy goodies - Pan de Sal, Bibingka, Caldereta Lasagna, Chicken Afritada, Pancit Molo, Stuffed Crab, Doughnuts, Leche Rolls, Custard, Chocolate and Custard Cakes – among them, all devastatingly delicious, all documented in a beautiful USPB recipe book prepared by herself and her culinary team.

There are thousands of bakers in the Philippines and other parts of Asia, of varying sizes, providing jobs and serving food to millions. “Using dehydrated potatoes can help commercial bakery operators achieve economies of scale,” says Teresa Kuwahara, USPB International Marketing Manager for Dehydrated Potatoes.

Dehydrated Potatoes are so-called because of a careful U.S. processing technique that retains most of their nutrition content and fresh potato flavor. Concentrated, fat and cholesterol-free, USPB Dehydrated Potatoes are convenient to ship and have a remarkable shelf life of 9 months minimum to 18-25 months maximum.

LESSONS FROM CANNES

BY ROGER PE


Let’s get to the bottom of it all. Advertising is talking to consumers, not talking to oneself or award judges. Isolating them will make you irrelevant and so do advertising festivals.

When it opened last week, Cannes, promptly heeded the call and focused on two major things: make the annual etravaganza relevant to the times and effectiveness a factor in judging for a coveted Lion.

Art for art’s sake, no, art for consumers’ sake, yes, and revolutionizing the industry, more so. This is the new Cannes. It is not a festival for scam or ghost ads anymore – those that were done posthaste or worse, posted somewhere near a building’s parking lot just to qualify. While it’s not aiming to look like the Effies, Cannes will always celebrate premium creativity - creativity with a purpose, that is.

Cannes today means creative ads must be effective. Effective ads must be creative. That’s what it takes and that’s how Cannes is evolving and keeping in tune with the times.

Now becoming even more vigilant, Cannes will never be a Lynx Award show, where a couple of months ago, a tranche of fake ads were entered and went all the way to bag an avalanche of golds, even climbing Creativity magazine’s Top 10 and a host of other ranking tallies.

A few days before the world’s most prestigious awards competition opened its curtain, Bob Garfield of advertising bible Ad Age slammed the world’s largest adfest as “it doesn’t matter anymore.”

Another iconic celebrity creative, Jeff Goodby, exploded a bomb referring to Cannes goers, as: “We are becoming irrelevant award-chasers.”

Goodby who is managing partner of highly revered Goodby Silverstein Partners ad agency in the US, admonished: “It’s fast becoming that the majority of things we’re rewarding, as an industry, are either small or marginal efforts for legit clients, things we made for real clients that the clients seem not to have heard of, or out-and-out fakes.”

Goodby further lamented: “We’ve created a system that rewards work that is increasingly unknown to anyone outside the business. We have become connoisseurs of esoterica. And in the process, we’re becoming more about us, and less about changing the world.”

One of Cannes jury presidents Nick Brien, president and CEO of Mediabrands, responded: “It’s a serious year. It’s a year for demonstrating that we can drive the necessary blend of creativity and proven effectiveness. It’s the reason why we changed the judging criteria and massively up-weighted the amount of importance we allocate towards effectiveness and the ROI.”

THE PHILIPPINES

As Cannes registered a 40% drop in entries and 20% less in delegate number this year compared to 2008, Philippine entries, however, climbed from 167 to 215, even gamely showing up in PR Lions, competition’s newest category and in Titanium, the most expensive of all.

Aiming to put its place back to its former glory, Ace-Saatchi & Saatchi sent in the most number of entries. DM9, BBDO-Guerrero, TBWA-Santiago, Mangada & Puno and DDB completed the Top 5. JWT Manila, Creative Juice, Leo Burnett, Publicis, Lowe, McCannGroup Worldwide, Publicis-Jimenez, Campaigns & Grey, Dentsu Indio followed next. Once dominant Ogilvy & Mather was noticeably absent on the list.

How much does per entry cost? Scanning through the festival’s site, cost per individual category, (all in euros) are as follows: Titanium (1,150); Film (620); Outdoor, Direct, Media, Promo, PR (380); Press, Cyber (350); Radio (270).

Breaking the cost down, Philippine ad agencies approximately spent: 27,880 euros for Outdoor (P1,886,960.00); 18,200 euros for Press (P1,219,400.00); 5,700 euros for Design (P345,990.00); 5,320 euros for Media (PP350,440.00); 5,130 euros for Radio (P343,710.00); 4,340 euros for Film (P290,780.00); 2,660 euros for Direct (P178,220.00); 2,100 euros for Cyber (P140,700.00); 1,520 euros for Promo (P101,840.00); 840 euros for PR (P56,280.00); 1,150 euros for Titanium (P77,050.00).

At rough estimate, local agencies coughed up about P5 million pesos to enter in 10 categories mentioned above. This does not include travel, accommodation and delegate registration costs (2,175 euros each). While full registration is a lot of money, it allows attendees to savor a mind-boggling experience – a passport to a smorgasbord of the best ads from around the world, various forum sessions, seeing world-famous creative directors at the Croisette or rub elbows with them at the famous Gutter Bar.

When asked why the Philippines broke its entry record this year inspite of the economic downturn, Connie Kalagayan of the Inquirer’s Corporate Affairs, says: “What local agencies saved on travel expenses for delegates, they poured in their entries. The greater benefit meant more chances of winning. It would have been great to have more delegates experience seminars from David Plouffe (Obama’s campaign stretegist), Kofi Annan and many more speakers. Hopefully, when conditions are better, we would have both delegates and entries in record numbers again.”

Kalagayan’s tone speaks with so much optimism as big as Cannes. “The Gold Lion that JWT Manila won in 2007 is still a feat to be surpassed. More medals in more events mean Philippine creative talent is fast becoming incredibly competitive, she says.”

Inquirer President and CEO Sandy Prieto-Romualdez, number one supporter of Philippine’s quest for glory in the Olympics of advertising has words of encouragement: “Globalization has already become an intrinsic part of our daily lives and vital to our industries. Cannes highlights the need for countries to step up to the plate and become competitive not only at home but also internationally.”

She says the Philippine Daily Inquirer has been representing the country in the last 6 years and “vows to continue advocating Filipino ingenuity and talent so that we are recognized, but more so, become authorities in different fields, even to our First World neighbors.”

Romualdez salutes Universal McCann’s “Botelya, Love in a Bottle, (Johnson & Johnson) and TBWA-SMP’s “Hibiscus, Iris” (Boysen Paint) for their Bronze Lion victories. She’s hoping that with these wins inspire untapped talents to pursue greater creative achievements.