Priceless insights from a master
August 1, 2006 | 12:00am
One of the reasons why I "evolved" from a lawyer to an advertising man is my special love for commercials. I love the art and creativity that goes into every TV ad, radio jingle, and print ad. Sometimes, when an ad is really special, it becomes part of pop culture – and eventually becomes part of advertising lore.
One such ad campaign is the MasterCard "Priceless" series. Everyone who has access to TV, radio, or the Internet is aware of this ad campaign. It’s almost impossible not to notice – and even more difficult to ignore. It’s one of those campaigns that simply catch your attention. Almost all of MasterCard’s ads are entertaining. (In fact, if you want to watch a whole bunch of these ads, you can check priceless.com.) It’s one of those ad campaigns that transcend time. And here’s the clincher – we all know what it’s trying to say. The message is so clear, so meaningful. We all get it. And that’s the whole point about advertising, anyway – to drive home a message that helps make the business grow. If you ask me, the whole MasterCard "Priceless" campaign is priceless.
And speaking of "messages that make business grow," I was fortunate enough to be invited recently to a MasterCard forum top-billed by a man whose every word is worth listening to. His name is Dr. Yuwa Hedrick-Wong, economic advisor for the Asia-Pacific for MasterCard Worldwide. Yuwa is a frequent speaker at numerous international high-profile conferences. Most recently, he was invited to speak at the 14th Annual Asia Leadership Forum in 2005, at which General Colin Powell gave the closing keynote address. If you look at the list of talks he’s done, you will be tempted to ask, "Does this man ever take a break?" He’s been everywhere, from London, to Beijing, to Seoul, to Laos, to Singapore, to Hong Kong, to Sydney. "Impressive" does not even come close to describing his accomplishments. Yuwa also writes a regular column in Forbes Asia called "Asian Angles."
Recently, The Philippine STAR assigned me to go to Bangkok, Thailand, to cover the talk of this highly respected business strategist and economist. These are the types of talks I live for. When I got the assignment, I immediately packed my bags. And true enough, I wasn’t disappointed.
Yuwa masterfully shared with us the results of the latest MasterIndex Consumer Confidence Survey, which was conducted from May 15 to June 1, 2006. As a backgrounder, this survey is the region’s most comprehensive and longest- running consumer confidence survey of its kind in the region. Now on its 13th year, the bi-yearly survey (conducted every six months) analyzes the prevailing consumer perceptions of economic conditions for the six-month period ahead.
For the past 13 years, MasterCard has established consumer-confidence indices, collected from more than 126,000 interviews, which is unequal both in scope and history across the Asia-Pacific. Over the years, the survey has demonstrated its precision as a barometer of consumer sentiment at several important points in history. In June 1997, for example, MasterIndex revealed a decline in consumer confidence – one month prior to the devaluation of the Thai baht that triggered the regional financial crisis. More recently, in June 2003, the MasterIndex for employment in Hong Kong dropped to a low of 20. This was subsequently reflected in Hong Kong’s unemployment rate, which peaked just before September 2003 at 8 percent. What all of this demonstrates is that the MasterIndex is a good indicator of how people will spend and consume in the next 6 months – and, in effect, you will be able to forecast how the overall economy will be.
The survey is simple: it basically asks people (in the last survey, 5,401 consumers across 13 key Asia-Pacific markets were surveyed, specifically, Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, and Vietnam) to score their perceptions and feelings on five variables, namely employment, economy, regular income, stock market, and quality of life. The score given by each person for each variable ranges from 0 to 100, with 0 being the most pessimistic and 100 being the most optimistic. The survey has a margin of sampling error of plus or minus four percentage points at the 90-percent confidence level. Based on historical data, consumer sentiment is a very strong indication of how people will actually consume in the next six months. The more optimistic people are, the more likely that their spending will increase. And we all know from Economics 101 that when people spend, the economy gets spurred on.
Based on the results, Yuwa said that markets in the Asia-Pacific face challenging times ahead. He said that while consumers in our region are still generally optimistic, their level of optimism has fallen from a year ago and is now below the historical average. And since there is a strong correlation between consumer confidence, interest rates, and household consumption, domestic consumption will, in all likelihood, weaken in the next six months, while interest rates rise in many of the Asia-Pacific markets.
According to Yuwa, there are a number of factors why overall consumer sentiment has dipped: The increase in crude oil prices, continued unrest in the Middle East, China’s appreciation of its currency followed by Malaysia’s revaluation of the ringgit, sporadic deaths in the region attributed to avian flu, and public dissatisfaction with the ruling government in some markets are some likely factors. He added that the current pessimism in the region does not yet take into account what is currently happening in Lebanon – so the likelihood of lower consumption over the next six months is even higher.
Despite the overall pessimism, however, there are bright spots. Japan and Hong Kong, for example, are seeing record-high levels of consumer optimism.
"Overall, the volatility in the global equity market, and concerns over inflation and high world oil prices form the backdrop to current consumer confidence," Yuwa said. "Adding to that are market-specific concerns that affect consumer confidence in the individual markets, either positively like Japan, the star performer this time around, which has gone from strength to strength, or negatively for markets such as Taiwan and Thailand."
Like a typical Pinoy waiting for the Pope to greet him in Tagalog, I anticipated what Yuwa had to say regarding the Philippines. He noted that as far as the Philippines is concerned, consumer confidence has improved immensely over the last year and a half. The MasterIndex of Consumer Confidence for the Philippines for the past two surveys were 28.9. In the most recent survey, however, the MasterIndex was 51.9. "This impressive improvement is clearly evident in all five economic factors," Yuwa said.
He added, "The current marginally optimistic market sentiment in the Philippines comes from a very positive outlook of the Filipino consumer with respect to regular income (83.5), and to a much lesser degree, the stock market (55.3). However, consumer sentiments on quality of life (35.5), employment (40.1), and the economy (45.3) are still very pessimistic. In short, while consumer confidence has improved greatly, there is still some way to go towards restoring confidence in the quality of life, employment and economy."
After his press briefing, I had the privilege of talking to Yuwa one-on-one. I had a couple of burning questions on my mind, particularly on the Philippines. "Dr. Yuwa," I asked, "why is it that based on your charts, consumer sentiment in the Philippines doesn’t seem to have as direct a correlation with actual domestic consumption and interest rates compared to other countries?"
He replied, "You know, the Philippines is a unique market. You’re right – domestic consumption and interest rates in the country don’t seem to have as direct a correlation with consumer sentiment as compared to other countries. If you notice, in the Philippines, there is very low optimism when it comes to employment and the economy, and yet there’s a very high level of optimism when it comes to regular income. In the Philippines, household consumption doesn’t seem as affected by political policies, interest rates, and employment as compared to other countries. In other words, even with political turmoil and higher interest rates – which are factors that normally result in lower consumption – the consumption in the Philippines sometimes increases. The answer to that are your OFWs. Your OFW remittances account for 10 percent of your GDP. It’s pretty much the lifeline of the Philippines. So even if a Filipino is pessimistic about being able to land a job, he is confident that he will have regular income by way of the remittances of his relatives who are working abroad."
Frankly, I had my concerns about this whole thing. My reaction was, "Dang, this will produce more Juan (or Juana) Tamads. While Pinoys are generally hardworking, I know that a good number of Pinoys out there will opt not to work if they are assured of a regular income coming in. Pinoys are at their best when they’re in a tight spot. But give them a little money and they throw a fiesta. Sometimes they throw a fiesta even when the money’s not there yet.
I asked Yuwa if he thinks that’s a good thing. He replied, "Well, it’s both good and bad. With the positive population growth, the Philippines is a young country. And there are a lot of people that the country can ‘export.’ But while the OFW remittances do help to keep the country’s economy afloat, I am not sure if this will be positive in the long run. Why? Exporting manpower should have a positive impact on the future of the country. In India for example, young IT experts there go to the US and climb up the corporate ladder. They learn a lot, experience a lot, and then go back to India to share their wealth of knowledge, thus contributing to India’s development as an IT hub. There is an improvement in skill and knowledge. With the Philippines, it’s different. You have a lot of educated professionals, like doctors. But then, these doctors decide to train as nurses because they know they will earn better as nurses in other countries. So they go abroad, and earn more. But when they come back, they have no advanced skill or knowledge that they can share with the country. Of course, you can’t really blame them. Sometimes they are in dire straits. But that’s what’s happening to the Philippines."
As I traveled back to Manila, I thought about what Yuwa said. We Pinoys sometimes have the tendency to go for the quick buck. Times are tough, we need the dough – and we need it now. But we should also always think about improving ourselves, and doing what we love, not just going for the money. When we decide to take up nursing or other courses that are "in demand" in the States, we should take a cue from the MasterCard ad, paraphrased as follows: Nursing course: P50,000. Trip abroad to work as a nurse: $1,000. Loving what you do: Priceless.
Thanks for your letters, folks! You may e-mail me at rodhnepo@yahoo.com
One such ad campaign is the MasterCard "Priceless" series. Everyone who has access to TV, radio, or the Internet is aware of this ad campaign. It’s almost impossible not to notice – and even more difficult to ignore. It’s one of those campaigns that simply catch your attention. Almost all of MasterCard’s ads are entertaining. (In fact, if you want to watch a whole bunch of these ads, you can check priceless.com.) It’s one of those ad campaigns that transcend time. And here’s the clincher – we all know what it’s trying to say. The message is so clear, so meaningful. We all get it. And that’s the whole point about advertising, anyway – to drive home a message that helps make the business grow. If you ask me, the whole MasterCard "Priceless" campaign is priceless.
And speaking of "messages that make business grow," I was fortunate enough to be invited recently to a MasterCard forum top-billed by a man whose every word is worth listening to. His name is Dr. Yuwa Hedrick-Wong, economic advisor for the Asia-Pacific for MasterCard Worldwide. Yuwa is a frequent speaker at numerous international high-profile conferences. Most recently, he was invited to speak at the 14th Annual Asia Leadership Forum in 2005, at which General Colin Powell gave the closing keynote address. If you look at the list of talks he’s done, you will be tempted to ask, "Does this man ever take a break?" He’s been everywhere, from London, to Beijing, to Seoul, to Laos, to Singapore, to Hong Kong, to Sydney. "Impressive" does not even come close to describing his accomplishments. Yuwa also writes a regular column in Forbes Asia called "Asian Angles."
Recently, The Philippine STAR assigned me to go to Bangkok, Thailand, to cover the talk of this highly respected business strategist and economist. These are the types of talks I live for. When I got the assignment, I immediately packed my bags. And true enough, I wasn’t disappointed.
Yuwa masterfully shared with us the results of the latest MasterIndex Consumer Confidence Survey, which was conducted from May 15 to June 1, 2006. As a backgrounder, this survey is the region’s most comprehensive and longest- running consumer confidence survey of its kind in the region. Now on its 13th year, the bi-yearly survey (conducted every six months) analyzes the prevailing consumer perceptions of economic conditions for the six-month period ahead.
For the past 13 years, MasterCard has established consumer-confidence indices, collected from more than 126,000 interviews, which is unequal both in scope and history across the Asia-Pacific. Over the years, the survey has demonstrated its precision as a barometer of consumer sentiment at several important points in history. In June 1997, for example, MasterIndex revealed a decline in consumer confidence – one month prior to the devaluation of the Thai baht that triggered the regional financial crisis. More recently, in June 2003, the MasterIndex for employment in Hong Kong dropped to a low of 20. This was subsequently reflected in Hong Kong’s unemployment rate, which peaked just before September 2003 at 8 percent. What all of this demonstrates is that the MasterIndex is a good indicator of how people will spend and consume in the next 6 months – and, in effect, you will be able to forecast how the overall economy will be.
The survey is simple: it basically asks people (in the last survey, 5,401 consumers across 13 key Asia-Pacific markets were surveyed, specifically, Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, and Vietnam) to score their perceptions and feelings on five variables, namely employment, economy, regular income, stock market, and quality of life. The score given by each person for each variable ranges from 0 to 100, with 0 being the most pessimistic and 100 being the most optimistic. The survey has a margin of sampling error of plus or minus four percentage points at the 90-percent confidence level. Based on historical data, consumer sentiment is a very strong indication of how people will actually consume in the next six months. The more optimistic people are, the more likely that their spending will increase. And we all know from Economics 101 that when people spend, the economy gets spurred on.
Based on the results, Yuwa said that markets in the Asia-Pacific face challenging times ahead. He said that while consumers in our region are still generally optimistic, their level of optimism has fallen from a year ago and is now below the historical average. And since there is a strong correlation between consumer confidence, interest rates, and household consumption, domestic consumption will, in all likelihood, weaken in the next six months, while interest rates rise in many of the Asia-Pacific markets.
According to Yuwa, there are a number of factors why overall consumer sentiment has dipped: The increase in crude oil prices, continued unrest in the Middle East, China’s appreciation of its currency followed by Malaysia’s revaluation of the ringgit, sporadic deaths in the region attributed to avian flu, and public dissatisfaction with the ruling government in some markets are some likely factors. He added that the current pessimism in the region does not yet take into account what is currently happening in Lebanon – so the likelihood of lower consumption over the next six months is even higher.
Despite the overall pessimism, however, there are bright spots. Japan and Hong Kong, for example, are seeing record-high levels of consumer optimism.
"Overall, the volatility in the global equity market, and concerns over inflation and high world oil prices form the backdrop to current consumer confidence," Yuwa said. "Adding to that are market-specific concerns that affect consumer confidence in the individual markets, either positively like Japan, the star performer this time around, which has gone from strength to strength, or negatively for markets such as Taiwan and Thailand."
He added, "The current marginally optimistic market sentiment in the Philippines comes from a very positive outlook of the Filipino consumer with respect to regular income (83.5), and to a much lesser degree, the stock market (55.3). However, consumer sentiments on quality of life (35.5), employment (40.1), and the economy (45.3) are still very pessimistic. In short, while consumer confidence has improved greatly, there is still some way to go towards restoring confidence in the quality of life, employment and economy."
After his press briefing, I had the privilege of talking to Yuwa one-on-one. I had a couple of burning questions on my mind, particularly on the Philippines. "Dr. Yuwa," I asked, "why is it that based on your charts, consumer sentiment in the Philippines doesn’t seem to have as direct a correlation with actual domestic consumption and interest rates compared to other countries?"
He replied, "You know, the Philippines is a unique market. You’re right – domestic consumption and interest rates in the country don’t seem to have as direct a correlation with consumer sentiment as compared to other countries. If you notice, in the Philippines, there is very low optimism when it comes to employment and the economy, and yet there’s a very high level of optimism when it comes to regular income. In the Philippines, household consumption doesn’t seem as affected by political policies, interest rates, and employment as compared to other countries. In other words, even with political turmoil and higher interest rates – which are factors that normally result in lower consumption – the consumption in the Philippines sometimes increases. The answer to that are your OFWs. Your OFW remittances account for 10 percent of your GDP. It’s pretty much the lifeline of the Philippines. So even if a Filipino is pessimistic about being able to land a job, he is confident that he will have regular income by way of the remittances of his relatives who are working abroad."
Frankly, I had my concerns about this whole thing. My reaction was, "Dang, this will produce more Juan (or Juana) Tamads. While Pinoys are generally hardworking, I know that a good number of Pinoys out there will opt not to work if they are assured of a regular income coming in. Pinoys are at their best when they’re in a tight spot. But give them a little money and they throw a fiesta. Sometimes they throw a fiesta even when the money’s not there yet.
I asked Yuwa if he thinks that’s a good thing. He replied, "Well, it’s both good and bad. With the positive population growth, the Philippines is a young country. And there are a lot of people that the country can ‘export.’ But while the OFW remittances do help to keep the country’s economy afloat, I am not sure if this will be positive in the long run. Why? Exporting manpower should have a positive impact on the future of the country. In India for example, young IT experts there go to the US and climb up the corporate ladder. They learn a lot, experience a lot, and then go back to India to share their wealth of knowledge, thus contributing to India’s development as an IT hub. There is an improvement in skill and knowledge. With the Philippines, it’s different. You have a lot of educated professionals, like doctors. But then, these doctors decide to train as nurses because they know they will earn better as nurses in other countries. So they go abroad, and earn more. But when they come back, they have no advanced skill or knowledge that they can share with the country. Of course, you can’t really blame them. Sometimes they are in dire straits. But that’s what’s happening to the Philippines."
As I traveled back to Manila, I thought about what Yuwa said. We Pinoys sometimes have the tendency to go for the quick buck. Times are tough, we need the dough – and we need it now. But we should also always think about improving ourselves, and doing what we love, not just going for the money. When we decide to take up nursing or other courses that are "in demand" in the States, we should take a cue from the MasterCard ad, paraphrased as follows: Nursing course: P50,000. Trip abroad to work as a nurse: $1,000. Loving what you do: Priceless.
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