Somewhat connected to my last post, here's a speech that was given by Emily Abrera, McCann-Erickson's Chairman-Emeritus about work in the ad agency and creativity in general.
THE VALUE OF THE INTANGIBLE
by EMILY ABRERA
Albert Einstein said, " Imagination is more important than knowledge." Prophetic, even visionary words from a great scientist. Come to think of it, the greatest scientists were so because they had the ability to generate theories… and what are those, if not imagined outcomes?
By now, the second day of this forum, and after the tremendous inputs from Mr. Richard Glover, Professor Desmond Hui, and Mr. Baey Yam Keng, I am sure that everyone appreciates and agrees that especially today, creativity drives value.
As the world zoomed past the industrial age and entered the Knowledge Era (also called the age of technology and communication), companies soon discovered that technology itself, easy to replicate and prone to early obsolescence, was not the point. Ideas were the differentiating factor. They still are the differentiating factor.
And certainly, after spending over a quarter of a century in the advertising industry, and much of it in the creative department, I'm a believer. I am also convinced that we are among Asia's most creative people, if not the most creative culture. So many foreigners, seasoned travelers, have made that same observation. (Take note, I am not referring to population growth.) We are also among the happiest, so they must somehow be connected.
However, our poverty index remains stubborn. How come? Doesn't creativity beget wealth? Obviously not unless we properly identify, understand, nurture, and deploy it where it can bring back the biggest returns. Unless we transform our creativity, our ingenuity, and our innovations into an industry that combines these creative ideas/skills/intellectual property, it won't lead to more jobs and more wealth.
What's the hurdle? It's a material world we live in. It's hard to quantify intangibles. Moreover, we have learned to use cost-cutting as a way of improving the bottomline, rather than apply creativity as a way of increasing value to the end-consumer in order to deliver increased profit for all.
In the identification and quantification department, we have a ways to go, but we now have some good models that can get us started. I suspect that once it's been quantified, we shall all be delightfully surprised, and hopefully adamant about the support we should be getting.
But let's get to value chains.
Advertising alone, for instance, chalks up annual media expenditures of more than 30 billion pesos, plus another 20% of that amount in related production services.
That's at the far end of the value chain.
What advertising spends on media, in turn, is what is used traditionally to create content ----shows, programs, features, and all these are intellectual property.
If you trace it back to the source, you will see that an advertising concept, in order to come to life as a print, radio or television ad, will need the support of a host of other services that include:
writers,
layout artists,
production designers,
photographers,
directors,
cameramen,
layout artists,
composers,
musicians,
voice talents,
sound studios,
film suppliers,
make-up artists,
costume designers,
food stylists,
lighting directors,
pre-press and post-production facilities,
editors,
graphic artists,
animators,
talent casters,
agents,
acting coaches
…and that's just naming some 25 of them. Depending on the concept, you might add puppeteers, acrobats, dancers, hair stylists, interior designers, historians, toymakers, ice sculptors or animal trainers. Each of these services add value to the end product, but they are all intangible, or behind the scenes, so to speak. What we do see, ideally, is a powerful, persuasive piece of communication.
If it is a television commercial for a branded consumable, it could have cost 3 million to produce, and another 35 million to air. Yet, imagine: it started out as an image, fleeting and momentary,
intangible, but with a 40-million peso potential to contribute to the Philippine economy. Amazing!
Nowhere is the creativity value chain more established than in this resilient industry that has kept pace with, and often outdone the growth rate of the economy, even during the worst crises of the past two decades.
Although there is a standard value chain that traces any finished product through its distribution, production, and all the way back to its ideation, we can actually choose any of the "links" wherein to apply a "value-adding strategy". Or, as Prof. Hui has also mentioned, the added value could be in the way the way we "package" an offering.
Take, for instance, Carlos Celdran's Intramuros Tour. It is engaging because he adds a touch of costuming, music and wit to the way he delivers the very same historical information that is more commonly experienced by 40 people in an airconditioned bus as a polite recitation over a bad sound system. In exchange for the more personalized and memorable tour, customers are willing to pay a premium, and hopefully, they also go away with a deeper impression about our country and our people.
Another example: take a traditional sweet, pastilles de leche, or yemas. For the same cost of ingredients and preparation, you can wrap each piece in plain white paper or cellophane crimped at the ends, place 60 pieces of them in a cardboard box, and price the resulting product to give you a 20% profit. Or, you can decide to wrap each piece in artful, delicately cut-out paper lace, and place them ( just two dozen, not 60) in a woven bamboo basket (not a cardboard box). And because you now have a work of art, you can price it at 2-3 times the amount, and you can be sure that it will deliver even more than that increment in pleasure to the consumer, for it has now satisfied more than just one of her senses.
Packaging is part of design, and is intrinsic to successful branding. It adds tremendous value to products and services, placing them in a different category than merely utilitarian, and serving to tap downstream support industries, providing training, employment, participation, pride and preservation of heritage. Japan is one country that has continued to use traditional packaging to reinforce the natural and ecological aspects of many of its product offerings, while enhancing its unique cultural positioning.
At every step of the value chain, the application of creativity instantly increases the value of a service or product, so that by the time it is delivered at point of sale, it can command many times its generic equivalent. And it can generate an endless number of integrated offerings alongside it. Take any of our great festivals, and imagine how it could be the pivotal event inspiring themed tours, crafts, gift items, resort promotions, travel packages, and media activity which in turn would underscore the freshness and sheer enjoyment of a Philippine experience. One can package individual products creatively, or package different aspects of a theme experience creatively; either would add value to the offering.
There are other benefits to embracing a creative attitude regarding our product offerings: at its core, the creative process nourishes the soul, uplifts us as we confront the daily grind, and makes sacred what would otherwise be mundane.
And of course, the beauty of the creative value chain is that it can expand endlessly depending precisely on how creative we are.
How much would you pay for a plain white T-shirt? How much more are you willing to pay for a plain white T-shirt with a little black swoosh on the upper left breast?
How much do you pay for a fastfood hamburger? How much for Salisbury Steak at a candle-lit table in a fine-dining restaurant?
Would you be interested to buy yet another CD of ethnic folksongs? What if it contained Saligumay, rearranged and sung by Grace Nono?
There are endless ways to add value to the products and services we offer the world. We need only to look around us right now to get a glimpse of the true wealth and potential of the Filipino spirit, if we put more creativity into business and more business sense into our creative endeavors.
THE VALUE OF THE INTANGIBLE
by EMILY ABRERA
Albert Einstein said, " Imagination is more important than knowledge." Prophetic, even visionary words from a great scientist. Come to think of it, the greatest scientists were so because they had the ability to generate theories… and what are those, if not imagined outcomes?
By now, the second day of this forum, and after the tremendous inputs from Mr. Richard Glover, Professor Desmond Hui, and Mr. Baey Yam Keng, I am sure that everyone appreciates and agrees that especially today, creativity drives value.
As the world zoomed past the industrial age and entered the Knowledge Era (also called the age of technology and communication), companies soon discovered that technology itself, easy to replicate and prone to early obsolescence, was not the point. Ideas were the differentiating factor. They still are the differentiating factor.
And certainly, after spending over a quarter of a century in the advertising industry, and much of it in the creative department, I'm a believer. I am also convinced that we are among Asia's most creative people, if not the most creative culture. So many foreigners, seasoned travelers, have made that same observation. (Take note, I am not referring to population growth.) We are also among the happiest, so they must somehow be connected.
However, our poverty index remains stubborn. How come? Doesn't creativity beget wealth? Obviously not unless we properly identify, understand, nurture, and deploy it where it can bring back the biggest returns. Unless we transform our creativity, our ingenuity, and our innovations into an industry that combines these creative ideas/skills/intellectual property, it won't lead to more jobs and more wealth.
What's the hurdle? It's a material world we live in. It's hard to quantify intangibles. Moreover, we have learned to use cost-cutting as a way of improving the bottomline, rather than apply creativity as a way of increasing value to the end-consumer in order to deliver increased profit for all.
In the identification and quantification department, we have a ways to go, but we now have some good models that can get us started. I suspect that once it's been quantified, we shall all be delightfully surprised, and hopefully adamant about the support we should be getting.
But let's get to value chains.
Advertising alone, for instance, chalks up annual media expenditures of more than 30 billion pesos, plus another 20% of that amount in related production services.
That's at the far end of the value chain.
What advertising spends on media, in turn, is what is used traditionally to create content ----shows, programs, features, and all these are intellectual property.
If you trace it back to the source, you will see that an advertising concept, in order to come to life as a print, radio or television ad, will need the support of a host of other services that include:
writers,
layout artists,
production designers,
photographers,
directors,
cameramen,
layout artists,
composers,
musicians,
voice talents,
sound studios,
film suppliers,
make-up artists,
costume designers,
food stylists,
lighting directors,
pre-press and post-production facilities,
editors,
graphic artists,
animators,
talent casters,
agents,
acting coaches
…and that's just naming some 25 of them. Depending on the concept, you might add puppeteers, acrobats, dancers, hair stylists, interior designers, historians, toymakers, ice sculptors or animal trainers. Each of these services add value to the end product, but they are all intangible, or behind the scenes, so to speak. What we do see, ideally, is a powerful, persuasive piece of communication.
If it is a television commercial for a branded consumable, it could have cost 3 million to produce, and another 35 million to air. Yet, imagine: it started out as an image, fleeting and momentary,
intangible, but with a 40-million peso potential to contribute to the Philippine economy. Amazing!
Nowhere is the creativity value chain more established than in this resilient industry that has kept pace with, and often outdone the growth rate of the economy, even during the worst crises of the past two decades.
Although there is a standard value chain that traces any finished product through its distribution, production, and all the way back to its ideation, we can actually choose any of the "links" wherein to apply a "value-adding strategy". Or, as Prof. Hui has also mentioned, the added value could be in the way the way we "package" an offering.
Take, for instance, Carlos Celdran's Intramuros Tour. It is engaging because he adds a touch of costuming, music and wit to the way he delivers the very same historical information that is more commonly experienced by 40 people in an airconditioned bus as a polite recitation over a bad sound system. In exchange for the more personalized and memorable tour, customers are willing to pay a premium, and hopefully, they also go away with a deeper impression about our country and our people.
Another example: take a traditional sweet, pastilles de leche, or yemas. For the same cost of ingredients and preparation, you can wrap each piece in plain white paper or cellophane crimped at the ends, place 60 pieces of them in a cardboard box, and price the resulting product to give you a 20% profit. Or, you can decide to wrap each piece in artful, delicately cut-out paper lace, and place them ( just two dozen, not 60) in a woven bamboo basket (not a cardboard box). And because you now have a work of art, you can price it at 2-3 times the amount, and you can be sure that it will deliver even more than that increment in pleasure to the consumer, for it has now satisfied more than just one of her senses.
Packaging is part of design, and is intrinsic to successful branding. It adds tremendous value to products and services, placing them in a different category than merely utilitarian, and serving to tap downstream support industries, providing training, employment, participation, pride and preservation of heritage. Japan is one country that has continued to use traditional packaging to reinforce the natural and ecological aspects of many of its product offerings, while enhancing its unique cultural positioning.
At every step of the value chain, the application of creativity instantly increases the value of a service or product, so that by the time it is delivered at point of sale, it can command many times its generic equivalent. And it can generate an endless number of integrated offerings alongside it. Take any of our great festivals, and imagine how it could be the pivotal event inspiring themed tours, crafts, gift items, resort promotions, travel packages, and media activity which in turn would underscore the freshness and sheer enjoyment of a Philippine experience. One can package individual products creatively, or package different aspects of a theme experience creatively; either would add value to the offering.
There are other benefits to embracing a creative attitude regarding our product offerings: at its core, the creative process nourishes the soul, uplifts us as we confront the daily grind, and makes sacred what would otherwise be mundane.
And of course, the beauty of the creative value chain is that it can expand endlessly depending precisely on how creative we are.
How much would you pay for a plain white T-shirt? How much more are you willing to pay for a plain white T-shirt with a little black swoosh on the upper left breast?
How much do you pay for a fastfood hamburger? How much for Salisbury Steak at a candle-lit table in a fine-dining restaurant?
Would you be interested to buy yet another CD of ethnic folksongs? What if it contained Saligumay, rearranged and sung by Grace Nono?
There are endless ways to add value to the products and services we offer the world. We need only to look around us right now to get a glimpse of the true wealth and potential of the Filipino spirit, if we put more creativity into business and more business sense into our creative endeavors.