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Election Year Is Expected To Raise Advertising Billings By $20 Million
Local advertising insiders predicting double-digit growth for industry in 2004
By ROSSIE CORTES
January 22, 2004
Puerto Ricos advertising industry reported growth of 3% for 2003, and executives from some of the major local agencies are projecting 10% average growth this year. Many, however, hope to do even better.
"Our expectations for 2004 are high; we are looking closely not only at the indicators of a healthy economic recovery but also at the positive attitude of business owners and consumers," said Fernando Mendoza, vice president & general manager of Premier Euro RSCG.
With the U.S. stock market climbing and expectations of a 3% to 4% increase in the islands economy, local advertising executives and their clients feel confident in their hope for a year of further recovery. "Our business is tight, and signs point to a positive year," said Carmen Cedre, general manager of FCB Worldwide (P.R.) Inc.
"In our case, we strive to achieve a percentage of growth for our clients that is more than the growth of the economy," said Jaime Fortuño, general manager of Lopito, Ileana & Howie Inc. "We have to remember that our clients are our health."
The big issue in 2004 is creating new products that satisfy clients needs. "We arent expecting big changes in the media since clients already have so many alternatives to choose from," said Erasto Freytes, president of Badillo Nazca Saatchi & Saatchi. "One of the biggest growth areas, I believe, will be in the marketing discipline of customer relationship management [CRM]." CRM encompasses the techniques to establish and maintain long-term business relationships with clients.
Added Freytes, "Advertising budgets arent going to increase to accommodate the purchase of more alternative media. What will probably happen instead is that the existing budget for alternative media will be divided between more outlets, not benefiting any one in particular."
Although there are no data on the effect alternative media have on consumers purchasing habits, advertising executives agree they help to target specific markets. As soon as consumers feel alternative media are becoming intrusive, however, they will rebel against them.
Hurray for election year
An election year is seen as a tremendous growth opportunity for advertising agencies and their clients, even those not involved in the political process. "Politics, like everything else, follows a cycle. We expect to see a boost this election year, but we havent seen anything to lead us to believe it will be substantially more than in the last election year," said Fortuño.
"Politics is a centrifugal force in that it generates more activity from all the products that are consumed as a consequence of these events," said Ramiro Millan, president of BBDO Puerto Rico. "It is a money injection not only for the agency involved but also for all those products; people buy new clothes and shoes to wear to their meetings where they enjoy food, drinks, and other products."
Another effect of all the political activity is likely to be the use of a wider variety of advertising media. "In an election year, the media and advertising pipeline will be full, which will lead secondary and alternative media to benefit along with the principal media [television, radio, press]," said Mendoza.
Without a doubt, political campaigns are going to raise billings within the advertising industry. It is estimated that services related to political campaigns will bring in $20 million this year.
This Caribbean Business article appears courtesy of Casiano Communications.