Opinion: The Smart Thing To Do With SMART

Smart Billboard Is A Waste of Space and Money

Smart Billboard Is A Waste of Space and Money

Smart Communications, Inc. is one of the biggest telecommunications providers in the Philippines if not the biggest. Well, SMART is on a pissing war with Globe Telecom and indeed they are fighting for every inch of space in order to promote and advertise their brands and product services.

Anyway, because of the advertising pissing war, SMART and Globe have gone all-out in their budget for things like 30-seconder ads, outdoor advertising, newsprint ads, magazine ads and all sorts of other gimmicks like events, concerts and what-have-you. Certainly, it doesn’t take much math to figure out that SMART and Globe probably spend billions of pesos on advertising just so that the simple Filipino consumer will eventually use their products and services, or to continue to do so.

First off – let’s get it straight. The supposed target market for a company like SMART includes every single FIlipino in the Philippines, with a big percentage of them being the masses. The masses comprise about 70% of the population, and fall under the socio-economic bracket of D or E, which is probably in the minimum wage to less-than-minimum wage income earner. Now, while they have the numbers in terms of sheer volume, the amount of money they earn collectively is nothing compared to the kind of cash raked in by the small 5% of those that belong to the A or B markets.

Notwithstanding, SMART spends billions to continue to advertise to the masses. In fact, SMART spends billions on advertising period – whether it be for the masses or for those that are better off. Of course, the strategy is to have SMART subscribers remain loyal to the brand, but in truth, THERE IS NO SUCH THING AS BRAND LOYALTY among the Philippine masses. For the basic Mang Pandoy, brand loyalty comes as a matter of convenience. In Aling Maria’s Sari-Sari store, I can purchase pre-paid accounts of either SMART or Globe, either through pre-paid cards or E-load because Aling Maria carries both brands, and even has two cellphones (one Globe, one Smart) to pass the load of whatever the consumer requires. In the same manner, because of the added value of texting Globe-to-Globe or Smart-to-Smart, or even making calls Sun-to-Sun, most people have afforded to carry with them two or even three phones, with one phone representing each of the major tele-com providers.

Anyway, the whole point is that it is pointless for SMART to spend unnecessarily on advertising. For one, they already have a near-monopoly on their captured market, which is the entire Philippines. The entire Philippines already knows about SMART, and probably has a cellular phone with a SMART line. There is no need for them to spend on TV commercials, daily newsprint ads, magazine ads and especially outdoor advertising! We don’t need another SMART banner beside yet another Globe banner in the same store advertising the availability of sim cards or pre-paid load availability.

SMART already has the power of direct marketing. If they want information shared to their subscribers, then they have the capability of sending whatever information directly to the cellular phones of their consumers without the need to become redundant through print ads, TV commercials or outdoor advertising. Now, if they have a new service or product to endorse that might need a bit of introduction – say SMART money – then perhaps that could be used. But still, all those services cannot be explained in a 30-seconder, or in a catchy newsprint ad. The best way to explain all that information is still in the form of step-by-step instructions, especially if their target market is the masses who cannot comprehend beyond the creativity of a 30-seconder ad.

Next, SMART is wasting away money on their celebrity endorsers. So what if Angel Locsin is the number one thing happening in the country? Her face on a SMART billboard won’t increase sales, or improve the image of SMART. Perhaps an Angel Locsin endorsement might be good for beauty products, but for a telecommunications provider – it just isn’t necessary.

I would rather SMART re-allocated their budget for advertising to developing other businesses or other services, or maybe even for a worthy charity beyond what they normally give out for charity.

For example, I would love for SMART to allocate a budget in the development of a world-class stadium that can perhaps host huge sporting events, such as the SMART Philippine Open Tennis Tournament, which could be part of the Men’s and Women’s ATP Tour, and have the likes of Roger Federer, Rafael Nadal, Maria Sharapova and Ana Ivanovic play tennis at our shores. Or maybe be able to invite the likes of Real Madrid or Manchester United to have an exhibition match. Or maybe even have the Los Angeles Lakers go up against the Talk N’ Text Phone Pals.

I would also love for SMART to sponsor let’s say the Ati-Atihan Festival, but instead of spending their money on their collaterals, banner placements, billboards and video screens – to just cover the entire production cost of the Ati-Atihan Festival, and not even have a single SMART logo advertised on the site. SMART will just merely send a text message to their subscribers saying that the Ati-Atihan Festival is free for everyone, and that they will be feeding and giving out drinks to everyone who goes, and then when everyone goes there – they won’t even find a single SMART ad or logo advertised anywhere. Angel Locsin can perform, and everyone would know already who brought them the party without the need to say it over and over again on the PA system, or to have banners at every street post.

Or maybe SMART can invest their profits or re-allocate their advertising budget for other things like a desalination plant, or for alternative energy sources, which they can eventually use to power their telecommunications equipment scattered all over the country.

At a rate of say 1 peso per text message sent, and the millions that they can easily earn on a daily basis, SMART indeed has a lot of profit at their disposal. While it may take also millions of pesos for operating costs of all their infrastructure, spending for unnecessary advertising is just a waste of profit. There are other things of greater concern. Eventually, SMART shouldn’t be the one advertising, but should be the one controlling the advertising, especially for products who might want their brand marketed to the subscribers of SMART. A hard-sell text message everyday about a particular shampoo might be an annoyance for their subscribers, but then it’s a paid text message ad from the shampoo company, and hard-sell is what they do anyway when they put up billboards and daily newsprint ads. Change focus, change strategy. DON’T WASTE MONEY.

I seem to have gotten carried away, and still have more to say on this topic. Eventually, I would really like to back up this claim with actual figures on advertising expenses, or maybe give a real insight on the kind of numbers that can be played with by a giant company like SMART. I do understand that SMART has other programs that include community partnership in regards to developing education facilities in small towns, disaster relief and even helping out with environmental causes. But then, maybe a shift on focus and budget could be made for those projects even more.

In totality, it’s not just about SMART, or Globe, or Sun. Every company should really re-think their budget for advertising, especially with bigger companies who have a monopoly on the market industry they represent. Everyone would drink San Miguel Beer on a daily basis even if Manny Pacquiao didn’t endorse it. Everyone would drink Coke or Pepsi regardless of the well-thought of tagline by the ad companies who do their ads. And besides, if Coke was the drink available on the sari-sari store next to my house, then that’s what I’d buy. I am practical enough not to have to travel 3 blocks to the next sari-sari store just to show my loyalty to Pepsi. I’m sure I’ve driven the point across.

Anyway – I’m sure there are other smart things that SMART can do, and I don’t need to be the one to say it. But hey – I’m just sharing my two cents worth, and that’s not even the price of a text message.

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15 Responses to “Opinion: The Smart Thing To Do With SMART”

  1. Good writing. Keep up the good work. I just added your RSS feed my Google News Reader..

    Matt Hanson

  2. Shhhhhhh! If they stop spending on ads, photographers like me will lose their account. Keep quiet and I’ll give you some when they get me to shoot one of their ads. Hehehe.

  3. Hahaha. Nice one, Miguel. 🙂

  4. I received replies in Facebook, and many were asking why I targeted SMART and not Globe? Well, SMART has more money, and they might be spending more. But, of course, I believe this message goes out to Globe also anyway. Actually, it goes out to all the companies who don’t need to spend for advertising since they already have a monopoly of the Philippine Market, or they already have a foothold on their sales and brand recognition – like SMB, Coke, Pepsi, PLDT, etc.

    Put it this way – most companies spend roughly Php150,000 a month to rent prime real estate billboard space, say along EDSA. Imagine if they spent money on something else.

  5. I’m just curious, do you work in any of the these big companies-Smart, Globe, Coke, Pepsi, PLDT, big shampoo corporations like P&G, Unilever, Colgate-Palmolive? Are you a member of their of sales and marketing team or at least has access to their advertising budgets and ROI? It would nice if you would have hard data to back up your opinion so that these can actually be facts and not just random rants and claims.

    And I think there is such a thing as brand loyalty.

  6. Justine,

    Outdoor advertising rates (for billboards) range from 100,000 to 300,000 a month depending on the location.

    Don’t get me wrong. I believe in brand loyalty. BUt I don’t believe it holds true for the masses. The purchasing power of the masses (D & E socio-economic class) is based on convenience and not necessarily brand loyalty. People will drink Coke because it’s what is available in the nearest sari-sari store. You won’t see someone walk out of their way to another sari-sari store just to maintain loyalties to Pepsi.

  7. Unlucky you, you are not in the marketing or advertising team of Smart. Well, first of all I believe every advertisement they create has a specific objective. There is a reason behind their advertising strategies.

    If your stated opinions are true, why then do the biggest corporations continue to spend millions in advertising?

    In advertising, your goal is not only to sell, but improve brand awareness, image and loyalty – that would be beneficial in the long term.

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  12. Experienced Marketeer Says:

    There were so many points raised that are obviously beyond marketing comprehension. I advise you to take time studying the basics of marketing before you suggest or even write what Smart ought to do. Try reading about go-to market strategies, branding and product life cycle.

    • I just raised an opinion based on what I know. It may not be comprehensively studied, but certainly I would’t mind the opportunity to receive that information from companies, so that I may be proven wrong about my assumptions, or that maybe my own opinion and interpretation could provide suggestion.

  13. Jennifer Says:

    Hmm. One of the objectives of advertising is to create brand loyalty. Commercials are not only made to create brand loyalty, commercials are there so that we won’t forget that a brand exist. If they would stop doing advertisements, consumers might think that Smart doesn’t exist anymore. And Smart is the leading wireless services provider, even though they’re already no. 1, it doesn’t mean that they have to stop promoting their products because Globe is also doing the same thing, promoting their brand. And I think that there’s a big competition between the 2 service provider (GLOBE & SMART) because consumers tend to choose the brand that provides more services. There is always competition in the market.

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