AGENCY BUSINESS MANAGEMENT

(AY 2019/2020)

Individual Research Assignment (20%)

Torres Jelaena Lee

S10184331D
APR T2P1
Industry Backgrounder

Our proposed agency, JILL, is a boutique advertising agency which specializes in social
enterprises. We also plan crowdfunding and fundraising events in order to help them raise
the necessary funds to create meaningful campaigns.

The following is a PESTLE analysis of the advertising industry as well as the social
enterprise sector:

Political

1. There is a government initiative which supports social enterprises.

The Ministry of Social and Family Development , National Council of Social Service, Social
Enterprise Association and Tote Board created raiSE Singapore, Centre for Social
Enterprise (“About Us”). raiSE has initiatives as well as funding programmes which are
designed to help social enterprises bring their ideas to life.

These initiatives and funding programmes include:

 FestivalForGood
 LeapForGood
 SE Young Talent Programme
 President’s Challenge Social Enterprise Award
 VentureForGood
 VentureForGood Youth
 Raise Impact Finance

The active support shown by the Singapore government towards social enterprises shows
that the social enterprise sector in Singapore is growing. This positively impacts JILL as we
will have a larger potential client base.

2. There are strict laws for advertising with regards to politics.

According to the Singapore Code of Advertising Practice (SCAP) (“Social Values” 13):

9.1 Advertisements should not:

(a) Downplay the importance of patriotism and national unity;
(b) Misinterpret national policies and goals for the benefit of any individual;
(c) Distort the perception of citizens’ influence in national issues.
(e) Discredit or be derogatory to Singapore as a democratic country or in any
other way.

This is important to know as any breach of the above code will result in an intervention by
the Advertising Standards Authority of Singapore. Not adhering to the above mentioned
code can negatively impact JILL as it can destroy our clients’ trust in us as well as taint our
reputation with both aspects being difficult to re-establish.

Economic

1. The gross domestic product (GDP) growth is slowing down.

According to a report written by the Institute of Chartered Accountants in England and Wales
(ICAEW), Singapore’s GDP is forecasted to drop to 2.4% due to the mounting challenges
faced by exports and the manufacturing sector. Moreover, the worsening US-China trade
tension may further pull the country’s GDP down (Heng).

This negatively impacts JILL as our clients may be hesitant to advertise in order to lower
costs. Additionally, people will have less disposable income which will cause our crowd-
funding and fundraising aspect to become less effective.

2. Singapore has the world’s most competitive economy.

In a report released by IMD World Competitiveness Centre (as cited by CNA), Singapore
claimed the spot of most competitive economy, beating both Hong Kong and the United
States of America (“Singapore Overtakes US, Hong Kong to be World’s Most Competitive
Economy”).

According to the report, contributing factors included:

 Reliable and advanced technological infrastructure
 Availability of skilled labour
 Efficient ways to set up new businesses
 Political stability and predictability
 Effective legal environment
 Competitive tax
 Conducive and business-friendly environment

These factors make Singapore one of the best markets to set up a business. This can help
bring about a rise in social enterprises in Singapore which positively impacts JILL as we will
have a larger potential client base.

Social

1. There is greater public awareness with regards of social enterprises as well as

greater willingness to purchase from social enterprises.

In a 2017 report commissioned by raiSE, public awareness of social enterprises has risen
from 13% in 2010 to 65% in 2016 which is an increase of 52% in just 6 years. Additionally,
the number of buyers increased from 22% in 2010 to 35% in 2016 which is an increase of
13% in 6 years. This shows that Singaporeans are becoming more supportive of social
enterprises (Lam and Zhang 14).

Thus, JILL is positively impacted as our unique service is crowd-funding and fundraising,
hence, an increase in support for social enterprises will help make this unique service more
effective.

2. Singaporeans spend a lot of time on their electronic devices.

According to survey released in the Straits Times, Singaporeans can easily spend hours
using their electronic gadgets.

The following are the 3 gadgets which Singaporeans spend the most time using:
 Mobile phones (3 hours 12 minutes)
 Laptop or notebook computer (2 hours 54 minutes)
 Personal or desktop computer (2 hours 12 minutes) (straits times)

Looking beyond the need for digital marketing, as we are doing crowd-funding and
fundraising on top of regular advertising services, we could look into the potential of raising
funds online rather than at a physical event. This could positively impact JILL by helping us
to save on costs needed for running an event.

Technological

1. Search optimisation engines are being revolutionized.

According to Slyce 74% of shoppers found text-only searches to be insufficient. Thus online
platforms are finding new ways to make their search engine more innovative (“How Visual
and Voice Search are Revitalising the Role of SEO”).

Some innovations include:

 Visual search engines
 Voice search engines

This can positively impact JILL as this is an area which has yet to be completely saturated
with advertising. Hence, leveraging on these new innovations will help to further set our
agency apart from others.

2. Native advertising is on the rise

Native advertising is a paid form of media which is designed to fit the look and form of the
website it is found on, allowing it to easily slip into the content consumed by the target
audience. According to a report from the Native Advertising Institute, 54% of companies are
already using advertisements while 38% are likely to use native advertising in the future
(“Native Advertising Trends 2017” 8). Moreover, 80% of respondents held positive feelings
towards native advertising (“Native Advertising Trends 2017” 7).

For JILL to be positively impacted, it is necessary for us to show clients that we are
extremely competent in the above form of advertising as it can help to build brand rapport
with clients.

Legal

1. Fundraising in Singapore is heavily regulated.

Currently, there is a Code for Commercial Fund-raisers which is uploaded on the Charity
Portal. As JILL has a crowdfunding and fundraising arm, our activities in those areas will
undergo periodic audits by the Commissioner of Charities (COC). Any breach of the code
will be announced publicly hence ruining our reputation.

This can negatively impact our agency as social enterprises will be able to see any past
incompliances and hence, may avoid contacting us which will result in a smaller client base.
Additionally, our reputation will be tainted and it will be difficult to re-establish
(“Commissioner of Charities Establishes Code for Commercial Fund-Raisers”).

2. Advertising in Singapore is heavily regulated.

The Advertising Standards Authority of Singapore (ASAS) advises the Consumers

Association of Singapore (CASE). They ensure that all advertising in Singapore follows the
Singapore Code of Advertising Practice (SCAP) (“About”). If an advertisement does not
comply to SCAP, they will issue sanctions which include:

 Withholding advertising space or time from advertisers, and withdrawal of the trading
privileges from advertising agencies.
  Exercising the option of publishing details of the outcome of the investigations, i.e.
naming advertisers who have breached he code.
 Referring the matter to CASE for action to be taken under the Consumer Protection
(Fair Trading) Act for recalcitrant advertisers.

Hence, our businesses practices should not breach SCAP as intervention by ASAS can
negatively impact JILL’s reputation within the advertising industry.

Environment

1. Social enterprises in Asia are being supported by international organisations.

The British Council and the United Nations Economic and Social Commission for Asia and
the Pacific (UN ESCAP) have come together to promote the growth of social enterprises
within the Asia-Pacific region as these social enterprises are seen as a driving force for both
innovation and development which is sustainable and beneficial to society (“UN and British
Council Promote Social Enterprise in Asia”).

This open support by highly-acclaimed international organisations means that the potential
growth of social enterprises in Singapore will become much higher. JILL is positively
impacted as it provides us with a much larger client base.

2. The advertising industry in Asia is growing.

Advertising expenditure in the Asia Pacific grew by 12.4% from 2016 to 2017. Moreover,
television advertising spend is expected to reach USD 67 billion in 2020 while internet
advertising spend is expected to reach USD 70 billion in 2020 (“Advertising in Asia Pacific”).

This positively impacts JILL as it shows that there is still demand for advertising in Asia
which is what JILL markets as one of its specialty.

Market Analysis and Trends

Volume

In 2017, 66% of social enterprises were in the seed stage and early stages while only 34%
of social enterprises were in the growth and mature stages. Additionally, 31% suffer from
lack of public awareness and 53% suffer from absence of financial support (“The State of
Social Enterprise in Singapore” 6).

A majority of social enterprises are still in a state where they are unable to afford the
services of an advertising agency which are needed to help bolster their brand name among
consumers.

Hence, JILL’s business model is able to benefit them as we also set-up crowdfunding and
fundraising events with the aim of helping these companies gain the necessary budget to
execute a quality advertising campaign.

Value

43% of social enterprise have an annual revenue of only SGD 50 000 to SGD 250 000 (“The
State of Social Enterprise in Singapore” 31)
The social enterprise market does not have as much financial value as other markets
however as most companies are still in the seed and early stage, it can be predicted that the
annual revenue will continue to increase as their brand matures.

JILL’s crowdfunding and fundraising service will, again, be beneficial for these social
enterprises as they can raise funds for advertising instead of forking out money which they
could have used in other areas of brand growth such as product design and innovation.

Growth

The current area of growth which 64% of social enterprises focus on is improving their
business model to achieve financial sustainability (“The State of Social Enterprise in
Singapore” 35) while the biggest challenge 59% of them face is customer acquisition and
market development (“The State of Social Enterprise in Singapore” 36).

As there are many areas in which social enterprises can continue to grow, JILL’s business
model benefits them by alleviating one of the areas which is advertising and thus, they will
be able to focus their time and money on growing other aspects of their business.

Consumer Habits

According to the Public Perception Study on Social Enterprises in Singapore, most buyers of
social enterprise goods and services were females aged 31 to 50 and males aged above 50
(Lam and Zhang 22). Hence, those two groups will be the main focus for the following
sections.

1. Females aged 31 to 50:

These are members of Generation X (Peralta)

 One in seven are supporting elderly parents (65 years and older) as well as
supporting a grown child (age 18 and older)
 Care about their family and health, thus, they like to play it safe
 Technologically savvy
 Brand loyal
 Will soon be taking on companies and politics from their predecessors
 Value sincerity, authenticity and independence

2. Males aged above 50:

They are members of the Baby Boomer Generation (Peralta).

 Large amount of disposable income

 One of the largest generations in terms of members
 Becoming more technologically savvy and are starting to spend more time online.
 Brand loyal

Buying Patterns

1. Females aged 31 to 50:

 They will often take more time to research about products while shopping (Peralta).
o Frequent review and opinion sites more than any other generation
o Will not purchase a product until they have researched thoroughly
 o In 2013, 75% had logged on to social networks at least once a month
 It is essential for us to create campaigns which offer as much
information as possible regarding the product or service as well as
clearly state its benefits.
 These campaigns should be place on search optimization, social
media and review sites in order to garner the highest amount of traffic.

 The prefer to buy from companies who offer a personalised brand experience
(Peralta).
o According to a 2014 study, personalised advertising improved brand
favouribility among Generation X
 Hence, it is important for us to be able to create unique brand
experiences when advertising.

2. Males aged 50 and above:

 They don’t trust advertising (Peralta).

o Least likely to listen to what advertisers and marketers have to say
 Campaigns must be informative and have clear, concise yet relatable
content.

 They like to use search engines (Peralta).

o 96% of Baby Boomer online activity, like making purchases, was through the
use of search engines
o Baby Boomers who use social networking sites follow-up with a visit to the
company website or by using a search engine
 Hence, it is important that our campaigns makes use of search engine
marketing to convince Baby Boomers to make a purchase.

Media Consumption Habits/Behaviour

It was revealed that in 2016, 64% of public awareness raised towards social enterprise was
through the internet, 49% was through world-of-mouth and 30% was print media (Lam and
Zhang 15).

1. Females aged 31 to 50

 According to a Millward Brown Digital survey, 60% use a smartphone on a daily

basis while 67% use laptops or desktops daily; contrary to popular belief (Peralta).
o The device that they use is dependent on the activity.
o Prefer to do tasks such as reading the news, doing desktop research and
shopping on their laptops.
o Prefer to do tasks like checking the weather on their smartphones.
 It is important that we position our campaigns on the channel which is
the most relevant to the product or service category.

2. Males aged 50 and above

 They do use social media (Peralta).

o One of the fastest growing groups on Facebook
o Use Facebook to engage with family and friends as they are becoming less
mobile
 Hence, we can still offer digital marketing as a way to reach out to this
group of target audience.
Emerging Trends

In the State of Social Enterprises in Singapore 2017 Report, it encourages social enterprises
to form relevant partnerships which can aid in expanding their customer reach as well as
open up new markets for the companies (“The State of Social Enterprise in Singapore” 37)

JILL can help enterprises in this aspect by making use of our crowdfunding and fundraising
activities. These activities will not only serve as a platform for enterprises to gain advertising
budget, it will also serve as a platform for social enterprises to network with other companies
as well as those who may want to have a stake in the business, thus, improving their
network.

Challenges Faced

Factors Which Are Limiting Growth and Potential

1. Advertisement blockers (ad blockers)

94% of mobile users in Asia use ad blockers and it’s rampant across all ages. Although
some websites require users to disable their ad blockers, the usage of ad blockers is still on
the rise (Elder).

The rise of ad blockers has led to huge sums of client money being lost as banner
advertisements are no longer able to reach the anticipated number of impressions in the
specified time period.

Thus, the marketing potential of banner advertisements has dropped significantly and
advertisers need to think of more innovative ways to not only capture consumer’s
attentionnline, but to also by-pass consumers’ ad blockers.

2. It is difficult to grab people’s attention

Although the internet has provided new platforms for advertisers to reach out to their desired
audience, it has also made grabbing their attention much more difficult.

The online space has become so cluttered that people no longer have the time to watch an
entire YouTube advertisement or take the time read through an entire online advertisement
(Ganot).

Hence, this has led to advertisers becoming more targeted when it comes to market
segmentation in order to break through the saturated landscape of online advertising. They
now have to fit advertisements to fit certain needs of the target audience so that they will be
enticed to watch.

Other Factors

1. Negative word-of-mouth

In a study done by the Spiegel Research Center, people who read negative reviews on
social media spent 12% less and frequency of purchase went down by 5% (Lazzari).

Hence, although word-of-mouth is often described as an important marketing tool, when

used to spread a negative experience it can cause great harm to the brand especially with
the advent of social media which makes the regulation of these reviews much more difficult
Key Competitors

Competitor 1

GOSH ADVERTISING

Gosh Advertising is a boutique agency which has been around since 2000. They offer good
creative ideas and work which has a fast turnaround in order to enhance their
competitiveness.

Their approach is known as “through the line” or “from the outside and in”. They place
emphasis on consumers and the consumer insight before they work on the brief thus leading
to strong campaign branding.

An uncommon service they offer is Brand ID. They help the brand create their brand book
from scratch (“Services”).

JILL could possibly adopt this service as we specialize on social enterprises, many of whom
have yet to make a name for themselves in the minds of consumers.

Competitor 2

DISENO ADVERTISING

Diseno Advertising is a boutique advertising agency which began in 2010. It specializes in

design, advertising and marketing services. They believe that a good design equates to
good value.

They aim to provide good client service which not only benefits the client’s return on
investment but also give them the ease of mind that their campaign is in good hands thus,
enabling them to focus on other aspects of their business.

What’s unique about Diseno is that they offer printing services which makes use of FSC-
certified afforested or recycled paper as well as soy based ink. This showcases their
commitment to running their business in a sustainable manner (“Printing”).

This is a brand value JILL should look into as we are handling social enterprises which are
businesses who want to make a difference. Hence, it would be hyprocritical of us to offer our
services to them if our business practices were harmful to the environment or unethical.

Competitor 3

SHOOTING FISH COMMUNICATIONS

Shooting Fish Communications is a witty boutique creative agency which was formed in
2001. They specialize in all things design, including: copy writing, logo design,
editorial/magazine design, corporate photography, annual reports, advertising, print and
branding (“Home”).

They pride themselves in being good at what they do and they make sure to showcase it on
their website through the tone they use (which also works to sell their copy writing
department).
A unique service they provide are annual reports which serve as a way to sum up their
client’s campaigns during that year for them. Although it’s a relatively small gesture in the
grand scheme of what they do, it helps to enhance their relationship with their clients which
can possibly lead to income for the agency via retainer fees.

Best Practices in the Industry

Existing Business Practices

 The Dentsu Aegis Network

The Dentsu Aegis Network is a group of agencies under Dentsu Aegis. Each agency
specialises in different areas of the integrated marketing process however they all work
together to create one cohesive campaign (“Dentsu Aegis Network”).

Through this network, clients can be rest assured that at every stage of the creative process,
there will be experts in from that particular part handling the campaign which results in only
the best work.

Although JILL is a local boutique advertising agency, we can tie-up with other specialized
agencies in areas such as market research and creative production. These tie-ins can be
used to create a smaller network of our own thus, eliminating the need to constantly look for
agencies to out-source work to. The process is streamlined while still producing quality work.

Emerging Business Practices

 The rise of messaging applications

Messaging applications offer a faster direct pathway to conversing with consumers. In May
2014, Snapchat users shared 700 million photos and videos daily. Facebook users only
shared 350 million photos daily and Instagram users only shared 70 million photos daily.
Messaging applications have also become popular among young adults and adults in their
late twenties and above (Dobush).

As an advertising agency specializing in social enterprises, it is essential for us to market the

story behind the brand and create conversation around it. Looking into the use of messaging
applications like Snapchat, Whatsapp and Instagram Stories could help to connect our
clients to their target audience.
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