Taking a byte out of the budget

Printed media is still the number one means of reaching the consumer used by local companies . . . but digital advertising is coming of age By Luciana Leitão Over the years, in Macau, companies have been investing more or less the same in advertising but adopting a more targeted approach. That’s why, even though printed advertisements are still the communication tool of choice the Internet is elbowing its way through the pack, so say analysts and people working in the field. According to the Statistics and Census Service, a whopping 63 ad service operations opened in Macau, for a grand total of 421, in 2013, accounting for the employment of 20 percent more workers in the field. Such establishments, however, are operating on a relatively small scale, since 384 support less than six people and only 19 employ more than ten. Overall, sector revenues increased 40 percent in 2013, returning MOP559 million. Of this, 73 percent came from advertising services per se, which corresponds to an overall annual increase of 46 percent, while revenues derived from the organisation of conferences and exhibitions dropped 23 percent. The chairman of the Association of Advertising Agents of Macau, Keyvin Bi, says the Internet appears to be leading the charge, while more expensive and traditional media such as outdoor billboards are waning in popularity. “We only see banks, casinos or some fuel companies using them”, he says. “Outdoor billboards can cost MOP200,000 to MOP300,000 for one month or half a month, depending on location.” Local companies primarily resort to printed advertisements in newspapers but even they are now starting to advertise on the Internet. “The Internet is much more efficient and with low cost”, Mr. Bi explains, adding: “They can advertise on Macau websites but they can also buy advertising through social media such as Facebook. Or, if they’re trying to promote an event, firms can advertise through Google or Yahoo.” Bi says that the chosen method depends on the target audience. If the audience resides outside of Macau then the Internet is the preferred medium. If the companies are targeting locals only, printed media is the favoured option, while billboards reach locals and tourists. Even so, he believes the best method is a combination of media. “You cannot only choose one method”, he says. “Even small and medium enterprises can use a combination of bus advertising and newspapers.” Foreign firms usually invest more than local ones in advertising, as Macau firms already know the market, using, instead, the best-respected “word of mouth” method to publicise their products or services. Moreover, Mr. Bi also says that overseas companies usually choose a Hong Kong or Mainland Chinese advertising agency. “Most of them don’t buy directly from local companies, always from a foreign advertising agency. Even casinos will not buy directly from a local advertising agency”, he says. Stable investment Carlos Machado, digital marketing manager at Hogo Digital, believes that over the years there has not been a significant increase or decrease in companies’ investment in advertising but there has been one noteworthy development. “Clients are more informed and they don’t want a simple advertisement; they try to generate a discussion through their advertising”, he says. “They’re getting more effective and more specific about what they advertise and the channels they use to do so.” Mr. Machado’s company does not focus on the outdoor ad sector but his overall impression is that it caters mostly to luxury brands, casinos and the government who resort to it, considering the overall cost. “It’s difficult to assess the return on billboards, while digital marketing is easier. That’s why there seems to be a trend towards digital”, he says. Alex Lu, general manager of MacauHR, a company specialising in human resources, says his company employs online advertising. “We have online advertising, including banners on our website”, he says. “We post job vacancies on our website and sometimes if some education centre has any new course they need to promote.” He believes that in the case of MacauHR, as it is aiming at the education sector or jobseekers, it makes sense to post online. As for outdoor advertising, his company has practically never used billboards, saying they prefer buses and taxis. “It isn’t very cost effective . . . [considering the price is much higher than other media] . . . We prefer not to use this way to promote our brands. For online business, we prefer to target our audience and they can always see our brand on the Internet.” Regardless, printed advertisements still seem to be the number one method of communication. The chief executive officer of Midland Realty Macau, Ronald Cheung Yat-fai, says that considering the focus of his company on local residential property transactions they favour newspaper advertising — more specifically, in the most popular newspaper in the city, Macau Daily News. “The majority of clients are local Chinese who prefer to read Macau Daily News”, he explains. Midland also deploys online advertising, saying, “We seldom post our advertisements on other websites, we already have our own website.” Outdoor billboards are “not effective” other than for image building and they’re “not suitable for Midland”. The company also mails out promotional leaflets. No more than five percent of the company’s overall budget is allocated to advertising and the investment over time is not increasing. “We keep it steady. We basically rely on one newspaper and nothing else”, he says, adding: “For us, because of our nature and our purpose we’re just addressing local Chinese in Macau and those who read Macau Daily and nothing else.” A combination Without disclosing figures, Galaxy Macau, in a note to Macau Business, stated that it employs different methods tailored to the type of audience it is trying to reach. ‘For example, we would not use direct marketing for a promotion aimed at the mass market’, the note says. Furthermore, Galaxy Macau stated that digital advertising and marketing is playing a ‘much more important role’ in the resort’s communications mix. As a result, Galaxy Macau has established ‘a service approach in social media’ sharing the latest news and promptly responding in a ‘more direct and personalised way’, using social platforms such as Facebook and Weibo. ‘Every news feed on Galaxy Macau’s Facebook page can be viewed by over 260,000 fans from various regions around the world, which is equivalent to millions of dollars of ad value in traditional media’, the note concluded. MGM Macau, in a note to Macau Business, replied that advertising is ‘a crucial tool’ in reaching the public. ‘We have been putting efforts into communicating with the local market, while reaching out to Hong Kong and Mainland China, as well’, the note adds. Furthermore, MGM Macau will take into consideration the ‘nature of different events or promotions during the planning and implementation of our advertising strategies.’ None of the other gaming operators responded to Macau Business’s invitation to comment. Luxury shopping centre One Central Macau gives big importance to advertising. “One of the messages we [communicate] is that we have the flagship stores, the largest stores in Macau of many of these brands”, says Hongkong Land head of retail David Martin. Of course, one of the challenges in the territory is deciding which is the “best channel” to get the message across. “The ferry is a powerful medium — you have a large audience, and it also kind of selects a little bit; ferries are probably slightly higher-end than those coming across the border. The opportunity to reach them in a slightly better environment is improved on the ferry”, he says. Another method being used a lot by One Central is phone messaging via Whatsapp or Wechat. Mr. Martin also says that they use promotions to increase the data-mining of customers, in order to be more effective in the promotions and messages sent. As for outdoor billboards, Mr. Martin says they’ve hardly used them in the territory. “Opportunities in Macau may be a little bit more limited than in Hong Kong, where you see billboards everywhere”, he says. One Central has used them but in highly targeted places such as the border gate and Macau International Airport. Whether or not it is effective is more difficult to ascertain. “The beauty of phone messaging and having a direct link to the customer is that you can get a much better sense of if it is effective or not.” As far as their investment in advertising is concerned, Mr. Martin says, like the others, that it has remained consistent over time. Growing pains The Global Advertising Regulation Handbook by Mary Alice Shaver and Soontae An, published in 2014, states that the advertising industry in Macau focuses on tourism, gambling and hospitality. Still, considering the size of these industries, public event planning has become the main service supplied by advertising companies. ‘Promoting the awareness of citizens about their obligations and issuing government orders are usually carried out through advertisements’, the book states.  Concluding that the advertising industry in Macau is in its infancy, and suffering great competition from Hong Kong and other cities, the Global Advertising Regulation Handbook concludes that ‘inadequate electronic media’ means print remains the leading advertising method, accounting for more than 85 percent of the total business. Online, on target, on a roll Hogo Digital focuses on Internet advertising, resorting mostly to social media such as Facebook and Twitter to promote what companies are doing. With clients from all sectors of Macau, servicing small and big companies, the company’s digital marketing manager, Carlos Machado, says clients’ advertising approaches differ. There are, however, two things emerging that are of increasing importance to all clients: big or small, they are all interested in Search Engine Marketing (SEM) which is a method used to get websites to the ‘head of the queue’ by increasing their visibility, and they are also attracted to promotion via the social media, be it Facebook, Wechat, Weibo or Sino Weibo. Clients are also hooked on newsletters, whereby precise information is sent to a list of subscribers.