Panregional Media Buying: Where Hispanics and Europeans meet Latin America [2-B]
Media buying by U.S. and European based advertisers in Latin American media properties has increased notably in 2007. While 2006 was a relatively good year, in 2007 advertisers are investing in the region because of the continued economic growth and the increased political certainty after election year 2006.
Miguel Chala, Publisher General Interest and Men’s Titles at Televisa Publishing, says that Televisa Publishing’s panregional men’s titles Men’s Health, PC Magazine, Popular Mechanics advertising has increased more than 15% compared to the same period of 2006. Veronica Lizama, Director of Sales at Panregional Business Magazine America Economia, tells Portada that during the January-June 2007 period, advertising increased by over 25% compared to the same period of a year ago.
According to Lezama, the increase has been driven by the Logistics/Travel categories, particularly DHL, and Luxury (Piatek Philippe, Cartier and Rolex) and Finance (Santander, UBS Private Banking). Fifty percent of America Economia’s advertising originates outside of Latin America, while the remaining 50% is generated by local sales. The magazine has a total circulation of 84,528 (Spanish 54,355; Brazilian 30,173) and local editions in Chile, Mexico, Brazil (Portuguese) and Central America. In the fall of last year, America Economia launched Luk, a semi-annual publication that focuses on lifestyle, fashion, and luxury. Panregional digital media buying is increasing at 15% plus annual rate according to various online media properties contacted by Portada.
The U.S. and the panregional digital and print media industries are converging on an increasing pace. This is mostly due to cultural and technological factors, including the following:
- U.S.-based media buyers buy into Latin American media. With the current expansion of Latin American economies, there has been a substantial increase in media buying activity coming from U.S. based advertisers targeting Latin American customers. Portada estimates the size of the media buys in Latin American media originating in the U.S. to be well over $150 million, with the majority going into TV and cable, but a significant amount, approximately 40%, going into print and digital media. Digital media buys are increasing significantly.
- Expansion of Latin American media into the U.S. and of U.S. based media into Latin America. Due to the similarities between the Latin American, especially the Mexican, and the U.S. Hispanic market, many Latin American media groups have a strong advantage in the U.S. Hispanic marketplace (including strong brand recognition). This has clearly served to foster an expansion of Mexican and Latin American companies in the U.S. In addition, U.S.-based media companies, including Time Inc., Entrepreneur Magazine and Forbes, have expanded into the Spanish-speaking world Latin America.
- Cost Factors. Latin American countries have workers with strong skills and talent. This is particularly good because the cost base to work in these countries is very low. Many U.S. corporations (media companies, call centers, etc…) are taking advantage of this situation. Cuatro Media, the publisher of Fox Sports en Espanol, has its back-office operation in Latin America.
The Internet: U.S. Hispanics like to read content from their home countries and often visit websites to do so. That is why US Hispanic online advertising dollars are being spent in Latin American media properties targeting U.S. Hispanics abroad.
Latin American newspaper websites get up to 20% of their visits from foreign countries.
Through geo-targeting technologies that allow companies to serve online advertising based on the I.P. the user is accessing from, Latin American online publishers sell advertising specifically oriented to U.S. Hispanics. For instance, a Colombian newspaper website will attract Colombians living in the U.S., a segment particularly interesting to airlines flying from Colombia to the U.S. or telecommunications companies serving both countries. Companies including AT&T, Cingular, Nissan, Western Union, Continental, Porsche, Mexicana and Disney have all made use of geo-targeted online advertising in Latin American websites to attract U.S. Hispanic audiences.
The appeal of these Latin American based websites to advertisers targeting U.S. Hispanics is also profound because the CPM rates (cost per thousand impressions) of Latin American websites are often significantly lower than the ones of U.S. Hispanic websites. US Hispanic online advertising dollars are being spent in Latin American media properties to attract U.S. Hispanics eyeballs—and dollars.
“There’s really a better business case to be made for sustaining an online publication, particularly when you consider the international reach of Tiempos del Mundo,” said Jonathan Slevin, a spokesperson for TDM. Slevin also cited the changing habits of readers for the decision, saying that increasingly, they are turning to the Internet to receive their news.
Peru’s El Comercio newspaper’s website is an interesting example of successful geotargeting to the U.S. Hispanic market. “Thirty percent of our website traffic is international and 15% comes from the U.S.,”Beatriz Hernandez Vega, online advertising manager at El Comercio in Lima Peru, tells Portada. Other countries where a sizable amount of traffic is generated are Spain (3% of total traffic) and, interestingly, Japan (2.4%) followed by Argentina and Chile. A quarter of El Comercio’s online advertising revenues come from geotargeted online advertising.
El Comercio has sold geotargeted advertising to the U.S. operations of Western Union, Sprint Nextel and several financial institutions. Vodafone, Endesa, Air Madrid and Iberia target Peruvians who access their home country website (El Comercio) out of Spain.
The CPMs El Comercio charges lie at $10.50, which is relatively expensive for Latin America and speaks to the strong position El Comercio occupies within the Peruvian online advertising area. To foreign advertisers, El Comercio charges a CPM of $11.50. GDA-Charney&Palacios, a print and online advertising sales network, obtains a commission out of that sale.
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