Advertisers in Burma ‘can’t bill It as a gold rush’ – The Irrawaddy

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http://www.irrawaddy.org/archives/36947

Much coverage of Burma’s “frontier market” has focused on sectors such as natural resources, telecommunications and manufacturing. Some of the world’s biggest and best-known companies—such as Coca-Cola, Pepsi, Microsoft and Unilever—have in recent months put their money into Burma, or pledged to, after Western sanctions were eased or lifted in response to reforms in the one-time army-ruled country.

Sir Martin Sorrell, CEO of WPP, speaks at the recent World Economic Forum in Naypyidaw. (Photo: Simon Roughneen / The Irrawaddy

Sir Martin Sorrell, CEO of WPP, speaks at the recent World Economic Forum in Naypyidaw. (Photo: Simon Roughneen / The Irrawaddy

One sector that hasn’t received as much attention is the nexus of public relations, marketing and advertising, which is, or will be, bound up with the companies and sectors that want to market and sell their wares in Burma or set up shop making goods in the country’s low-wage economy.

But one media company that has come to Burma is London-based WPP—the world’s biggest advertising conglomerate, which owns a number of well-known PR, advertising and market research firms. WPP-owned Ogilvy, JWT and TNS are already operating in Burma and count some of the country’s biggest companies as clients. Already WPP affiliates have carried out a 12,000-person consumer survey, a novelty in Burma even two years into the country’s transition from military rule.

Overall, Burma is but a tiny fraction of WPP’s Asia-Pacific businesses, which generate US$5 billion in revenues and employ around 47,000 people, but WPP CEO Sir Martin Sorrell says that “acorn” of revenue has plenty of room to grow. Sorrell, a speaker at the recent World Economic Forum (WEF) in Naypyidaw, sat down with The Irrawaddy to explain the potential of Burma’s media market as foreign investors move into the country.

Question: Is Burma an important country for WPP?

Answer: One way or another, we have six operations here. They’re all small but growing, and some we’re started from scratch. But there’ll be more to come—Millward Brown [owned by WPP] is awaiting ratification of its license, for example.

We’re up to about $1.5 million to $2 million revenue; next year I anticipate $3 million, $3.5 million, $4 million. From little acorns, but we expect this to become an important market. It’s 60 million people or whatever the true number is, and is a major market and a major opportunity.

As I said at the session, the sanctions were the hurdle you had to jump over. Before they were lifted, working here was a non-starter, but now it’s rather like Vietnam in the ’90s. I think that’s the closest analogy.

Q: How would you assess the existing advertising and PR sectors in Burma?

A: I think it’s very much in its early stages. But just like I didn’t like the question [made at WEF’s ‘The Business Mandate in Myanmar’ session, at which Sorrell was a panelist] about corruption, with the automatic assumption that there’s no corruption in the West, it would also be arrogant to say that there’s none [PR and advertising] here. It’s in its early stages, and a lot of it is adaptations of overseas campaigns, but that will change.

Coca-Cola have established their bottling plant, Unilever hasn’t opened yet but will, Nestle will be here. With the advent of those companies, you’re going to get more locally focused stuff. Local companies are strong in areas such as beverages or retail—fast-moving consumer goods, so they will have to become a bit more sophisticated, which by the way, I think they will—and that will bring greater opportunities in terms of media.

Media prices have been quite strong—up 40 percent in some areas. You have four TV stations that are 70 percent of the advertising market. The government-owned ones do control the content, which probably limits the supply, but it’s going to change over time. Then you have the advent of the telecommunications licenses, which will drive digital, so I think you’ll have a sort of twin peaks in the market, the twin peaks being TV and digital.

But it’s going to take time. The thing you have to be careful about is that you think this is going to be a straight growth line upwards. Even if it is 6 or 8 percent or whatever it turns out to be, there’s going to be fluctuations. But if you remember the geographical location of Myanmar, there will be rub-off from China and India and Thailand. It could be the same as Eastern Europe, in the same way that Germany and Poland and Russia spin off each other as markets.

Q: What do you think the impact of private daily newspapers will be for the advertising sector here?

A: I think it’s important, but I have to recall someone at our panel told us he was running a daily newspaper here but he wasn’t making money off it. Well, my answer was, ‘That’s not a new phenomenon.’ In its traditional form, and I may get in trouble for saying this, they may have missed the boat.

Facebook is very popular here, and it may be that Internet penetration is not that significant, but the power of digital media is so strong. So if you think about it, once the impact of the telecommunications licenses kicks in, which will take time, they will have a greater impact, and social and digital media will become much more effective. In the same way that you could have a leapfrog over PC to mobile, you might see a leapfrog over the traditional newspaper to digital, because the advent of the private daily newspaper here is so relatively late.

Q: How does online advertising and mobile advertising work, and particularly how can money be made that way in this country?

A: With difficulty, as there’s no payment system. I’ve heard of one newspaper app here where they charge mobile phone credit for the download. For apps, you get consumers to pay for content; for advertising, you get companies to pay for access.

You buy the content if you value the content, and that goes back to one of the mistakes of the early Internet, when content was given away for free—it makes absolutely no sense. If The Irrawaddy is so valuable, if Simon writes good enough copy, then you should charge a subscription for it. But it can be search, it can be display advertising—they [ads] can be difficult to get in mobile screens but it can be done. It can be video, it can be social, which can be very powerful and is more about branding. Twitter is more about PR.

Q: Twitter is nowhere near as popular as Facebook here. Why do you think that is?

A: I don’t know. I remember Charlie Rose was interviewing the media correspondent at The New York Times, and when he asked him, ‘Well, how do you get your information when you get up in the morning?’ And he said, ‘Twitter.’ So here’s the guy from The New York Times saying that. But I don’t know why it hasn’t taken off here. Short text notification could be very powerful. You would think people here would seek substantial followings. Maybe Twitter hasn’t pushed it. It doesn’t make much sense. There’s a strong journalistic strain here, with people interested in that work, so you would think people would push it.

Q: This is a poor country where most people don’t have disposable income. How will that impact your sector?

A: But it’s a young country, but you’re right, it is a very poor country. We’re looking over a 20-year timeframe, and as someone else said this morning, you can’t bill it as a gold rush. The Vietnam experience is relevant: It rose, it cooled off, it rose again and now it’s cooled off again. I think it is going to be bumpy and there will be turbulence. The government will do certain things and won’t do other things, and you have a very important election coming up in 2015.

 

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