Political ad spending to hit P2B; GMA 7, ABS-CBN to get bulk

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Comelec Chairman Sixto Brillantes Jr. said political ads in the guise of commercial ads—candidate endorsing products or pushing for advocacies of their parties—would not be allowed during campaign. INQUIRER FILE PHOTO

Political ad spending is expected to hit P2 billion in this year’s midterm elections, with television networks hoping to continue to  corner the bulk of the campaign pesos despite moves by the Commission on Elections (Comelec) to curb politicians’ commercials on the boob tube.

In a January 29 report by Deutsche Bank AG/Hong Kong on Philippine media companies, the projected P2 billion political ad spending this year is 66 percent higher than the  P1.2 billion politicians spent during midterm elections in 2007.

Elections have become a massive source of income for broadcast companies every three years—political ads are expected to account for 5.2 percent of the P35 billion total ads this year compared to 4.8 percent of the P25 billion total ads spent in 2007.

ABS-CBN Broadcasting Corp. and GMA Network Inc. roughly have a 60-40  share of political ad revenues in broadcasting, although GMA has more profits than ABS-CBN (P2.971 billion to P2.5976 billion).

In comparison, political ads soared to P5 billion in the 2010 presidential elections, or 14.6 percent of the P35 billion total ad spending in the same year.

“Being the main advertising medium, we believe free-to-air TV is likely to get a lion’s share of election-related ads, as seen in the industry during the last presidential election in 2010,” Deutsche Bank analyst Carissa Mangubat said.

Mangubat said she expected ABS-CBN and GMA to post double-digit growth of 11.6 percent and 13.1 percent, respectively, this year largely due to the triennial boost in political ad spending even with the Comelec’s move to impose a 120-minute cap on political ads for every candidate on all channels, harsher than the 120-minute limit for every candidate on each channel in 2010.

Mangubat said that since both networks had already maxed out on their ad loads  (18 to 20 minutes per hour compared to the average 12 minutes per hour in Indonesia ), profits would come from premium priced ads such as ads endorsing candidates.

“Political ad rates are also regulated and are effectively priced at a 25 percent to 30 percent premium versus regular ad rates because rates are pegged directly to the published rate card. This could mean immediate margin enhancement for ABS-CBN and GMA,” Mangubat said.

Based on its forecasts, political ad spending would add 5 percentage points to 6 percentage points in revenue growth and  3 percentage points to 4 percentage points increase in profit margins.

But political experts are divided on who are the winners and losers in the Comelec’s move to restrict political ad spending this year.

Leveling playing field

Sen. Franklin Drilon, campaign manager of the Aquino administration’s Team Pinoy, does not see any winners or losers from the ad restrictions.

“To me, it is just to level the playing field  between rich and poor candidates, which is the purpose of the law,” Drilon said yesterday.

Sen. Francis Escudero agreed, but said he reckoned that the ad limits would be a hard blow to the networks.

“There are five to eight candidates who can spend more than the 120-minute limit on all channels under the new Comelec guidelines,” Escudero said.

Sen. Vicente Sotto III said newspapers and tabloids could benefit from the ad limits on broadcast media.

“Some candidates might divert part of the budget for TV and radio to one-fourth page ads in newspapers or one-half page ads in tabloids,” Sotto said.

The new Comelec rules limit print ads to a maximum of three times a week for every publication.

“It’s not only cheaper than the P500,000 per 30-second spot on TV, which is literally gone in  a  blink of an eye, but print advertising offers more substance and more time for voters to review the qualifications of the candidates,” Sotto said.

“There will be no shift from one channel to another, money will move across different media,” he said.

Sotto said  one of the biggest losers in the campaign reforms were the bus companies after the Comelec banned ads on their fleet and terminals during the campaign period. “Bus ads are one of the most cost efficient campaign tools. It helped me win in 2010,” said Sotto.

No ads on buses

The Comelec  prohibits political ads on buses and bus terminals during the campaign from February 12 to May 11.

The Comelec said any infringement of the rule would be “cause for the revocation of the public utility franchise and will make the owner and or operator of the transportation service and or terminal liable for an election offense under Section 9 of Republic Act No. 9006.”

An official of one of the biggest bus companies operating in Metro Manila  said the decision would be a big blow to the industry, which was hoping to cash in on the multibillion-peso election spending that would have generated P10,000 a month for ads on the rear of buses.

Inquirer research showed that as of December last year, there were 8,077 bus franchises registered nationwide with a combined fleet of 26,483 buses.

In Metro Manila there were  391 franchises that ran 5,342 buses.

The bus company official said most operators expected to generate at least P100 million in monthly income from political ads during the campaign.

Comelec Chairman Sixto Brillantes Jr. said political ads in the guise of commercial ads—candidate endorsing products or pushing for advocacies of their parties—would not be allowed during campaign.

Brillantes has also indicated he wants the spending limit of candidates to P3 for every voter strictly enforced.

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  • Fulpol

    leveling playing field…

    the heck is that??? BS Aquino III won the presidency because of huge advantage compare to moneyed Villar and pro-masa Erap… son of Ninoy, sister of Kris and son of just deceased Cory, where he got his sympathy votes…

    plus BS Aquino III is member of the yellow, supported by yellow media..

    where is the leveling playing field???

    • theassassin

      this guy has gone nuts…what the heck is he talking about…full of non sense…the article is talking about airtime and all…and his points are somewhere else…nuts

  • bogli_anakdami

    thisl will be a good news to flipland’s gdp …

    Q2 forecast is 99.99% growth

  • bogli_anakdami

    with that kind of $$$ buying and selling votes, Q2 will post 99.99% growth…

  • Global1st

    how about posters, banners and stickers……”mga kalat” 

  • Guest

    2 billion lang? Ang hina naman nyan. Let’s put 2 billion into perspective:

    01. Erap made no less than 2 billion from the BW scandal alone in 1998. On top of that, Erap made another bundle that same year as the go-between between Yuchengco and Manny Pangilinan for the sale of PLDT stocks from the former to the latter under duress. That’s another 2 billion. No sweat.

    02. JPE earned around 500 million pesos of discretionary MOOE in 2012, according to Alan Peter Cayetano. 4 years na kayang Senate President si JPE and the budget for MOOE has been increasing year after year. Not to mention the heavy traffic of luxury cars in Port Irene. 2 billion is no sweat.

    03. The Angaras earned 2 billion already by milking the government coffers for the APECO dream city of Edong and Sonny. This year 2013, some 323,000 million has been earmarked to bring the dream city closer to reality. All told, 2.3 billion pesos and still counting. No sweat.

  • http://pulse.yahoo.com/_GUZISWUMVDD5QJUC7GBJKEM7XA prangka

    ABS-CBN Broadcasting Corp. and GMA Network Inc. roughly have a 60-40  share of political ad revenues in broadcasting, although GMA has more profits than ABS-CBN (P2.971 billion to P2.5976 billion). This goes to show GMA is the no. 1 television channel and advertisers believe in AGB-Neilsen than anywhere else.  ABS-CBN got the bulk of the the advertisement because it’s cheaper. GMA got only 40% but ended earning more. 

    • catgotmytongue

      hindi rin. GMA has more profits as a result of pagtitipid. see their gross income. AGB is basang sisiw.

      • http://profile.yahoo.com/276L22SZM5ZUQGV24IL4ZEF6UA Edward

        maling mali ka rin…

        malaki ang gross income ng gma7 kc purely industry revenue iyon sa kanilang operations..kya nga gma7 ang isa sa top taxpayers ng qc as compared to abs-cbn..at unlike abs -cbn consolidated ung income ng channel 2 kasi kasama riyan ang income ng ibang business nila gaya ng skycable, etc..(remember, binili ng skycable ang global destiny cable.gusto ata nila i monopolize ang negosyo. kaso malabo nang mangyari)..hahaha

        next time read financial statements results of those 2 mentioned publicly-listed companies..u can download the financial statements sa phil stock exchange, sec or the company itself..or request kau sa mga broker-houses gaya ng citisec, bpitrade, wealth sec, first metro, etc.

      • Sonny Boy Madayag

        LOL. Let’s compare it shall we. For the fiscal year 2011 the total gross revenue of ABS-CBN Corporation was at 28.2 billion pesos, 17.5 billion of which is from advertisement compare it to GMA Network, Inc. which on 2011 made a 13 billion peso revenue most of it from advertisement since they only have a small consumer sales. Bottomline; GMA is a poor second while TV5 is a good third. (TV5’s asset grew to an astounding 8 billion pesos.)

        Source: Philippine Stock Exchange, disclosures of each companies

    • Sonny Boy Madayag

      In terms of ad revenue, ABS-CBN Corporation is far ahead than GMA Network, Inc. In terms of total gross, GMA is like mole on the face of ABS-CBN.

  • http://pulse.yahoo.com/_UEHZP52OVNUUPVT3VJNWPUGVLU Peter L

    The big question is after spending P2Billion in campaigning in ads only, how do politicians get back the money? Do you know? May God save our country.

    • http://pulse.yahoo.com/_W7TPARCYJFCSA3PBQAM3MVZO3E kurakut

      IT HAS LONG BEEN ANSWERED – CORRUPTION, FAT BONUSES, ANY IMAGINED MONEY MAKING PROJECT LIKE ROADS, BRIDGES, CLASSROOMS, ETC.- IN SHORT NAKAW NAKAW NAKAW

  • verconti

    tanga pala to si chiz… anong paki ng taong bayan kung hard blow ang pag limit ng air time ng mga candidato? cguru share holder ka ng gma o abs.. buti pa si drilon, leveling the playing field.. pano yong magagaling na hindi walang pera eh… kaya puro political dynasty at trapo pinas..pera pera

  • JC

    I really like what the comelec is doing right now… sana lang managot talaga kung lumabag ang isang candidate sa policy.

  • Your_King

    The growth that you have been seeing or hearing the Administration boast about is due to this P2B. Those numbers have fluctuated because people with money and power spend a lot of money in order to continue to be able to make more money and gain more power. It is is not election every year so you’ll see the growth numbers come down. It would be great if the rich like the Senators with P200M pork barrels would continue spending it on the country but that is highly unlikely.

  • http://pulse.yahoo.com/_5STEU22AD7YRHQSB6RE56ZDSYA J

    Ang advantage palagi yung popular. Kung may limit ang oras at pare-pareho ang air time e di yung popular pa rin ang makikita. Yung mga sikat na nakaupo at matino ok yun, pero yung nakaupo na pumalpak matatandaan ng voters yun… KUNG matino ang pagiisip voters. 
    So voters… remember just in case somebody would try to corrupt you… Take the money and vote according to your conscience. Walang utang na loob diyan.
    Pero bottomline panalo ang abs-cbn at gma.

  • ygcer

    maybe this is the reason why both GMA and ABS-CBN are shamelessly airing political ads that run smack of early election campaigning while (hypocritically) leading 2013 election advocacies  

  • http://profile.yahoo.com/XJ6M3EEK5LGN77YOMKJHBCXF7Q jeronimo

    Sana magkaroon din ng 2billion halaga na project para sa ikabubuti ng mahihirap.

  • magiting78

    Hnd po ba ipagbabawal ng Commelec yung pangangamapanya na may nagpapatugtog habang tumatakbo ang sasakyan,….napakalalakas pa gamit ng speaker nakaka bulahaw sila kaht dyes oras ng gabi meron…..

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