In today’s column, Portada interviews Juan Imaz, CEO of Media Response Group. The Group is comprised of Canalmail, HOTWords, Efficienttarget, LeadtoLead and Newbriefing.
In the interview, Imaz recounts the details of the most recent investment made by VSS, the development of the group's operations in Latin America and the Iberian Peninsula, his views on the future of the digital advertising market, and more.
Portada: Was VSS’s investment hard to get? What are the opportunities you believe VSS saw in your group?
Juan Imaz: "Like any investment process, it was laborious. After the first meeting with VSS, it took about six months before we signed papers. We had previously done a road show to attract other potential investors, so the whole process lasted over a year."
Portada: What are the advantages of having VSS among your investors?
Juan Imaz: "VSS is one of the largest private equity investors in the world specializing in media company investments. The advantages of having them among our shareholders are many: their greater market vision, great network of high-level contacts, contribution to the strategic vision of the group, investment experience in hundreds of companies and analysis of market opportunities, and much more."
Portada: By 2020, what percentage of the advertising pie in Latin America do you expect will be spent on direct response advertising?
Juan Imaz: "If we look at Google's CPC (cost per click) as direct response, I would say the percentage will be over 70%."
Portada: What specific business does each of the group companies (HOTwords, Canalmail, LeadtoLead and New Briefing) handle? What is the dynamic between the companies?
Juan Imaz: "The four operate independently and exploit the commercial and group synergies between them. HOTwords does online in-text advertising; Canalmail is a pure player in email marketing; LeadtoLead specializes in direct response marketing; and Newbriefing does SEO (search engine optimization) and SEM (search engine marketing)."
Portada: What is the geographic breakdown of Media Response’s revenues (among Spain and LatAm countries)?
Juan Imaz: "The Iberian Peninsula (Spain and Portugal) is still the region that contributes the most revenue to the group, accounting for about 60% of our total revenues. Brazil follows with 30%, and Mexico accounts for the remaining 10%."
Portada: In what new LatAm markets do you plan to expand to and when?
Juan Imaz: "We plan to establish a physical presence in Brazil, Mexico, Argentina, Chile and Colombia before the end of the year. Next year we will branch out to the Peruvian market."
Portada: Do you plan to enter the U.S. Hispanic market in the future?
Juan Imaz: "The U.S. Hispanic market is very interesting, as it gets around $400 million a year in digital advertising. We are currently considering the best way to approach it, but we definitely want to be in that market as well."
Portada: Who are the biggest advertisers for each of your companies and in what categories?
Juan Imaz: "Much of it depends on the advertiser’s profile. We have a lot of experience (more than 11 years) in digital advertising and have learned to differentiate advertisers according to type: branding, direct response, mixed, etc. Ninety-five percent of our clients are large or very large companies (Microsoft, IBM, Ford, Coca-Cola, Grupo Santander) and include the automotive, financial, publishing and education industries."
Portada: Are the measurement tools available today appropriate? What innovations do you think are necessary to improve the effectiveness of digital advertising?
Juan Imaz: "Internet is a medium where everything can be measured and that is why there is a proliferation of measuring tools for everything: open rates, click-through rates, lead-through rates, sales rates, post-click rates, etc. The truth is that this is encouraging the migration of existing [ad] budgets from more conventional media such as TV, newspapers, magazines, movies and radio to the Internet. On the other hand, it imposes the rigid and constant demands of metrics on all online media.
In response to your question, I do believe that current measurement tools (ad servers, Comscore, etc.) are adequate and sufficient. As far as what innovations are needed to improve digital advertising, what I think is missing is training in digital marketing within companies who use online media.
Digital advertising has a significant degree of complexity since it is closely linked to technology, where there is a vast range of possibilities. Therefore, I think all large clients should have their own in-house digital marketing experts—professionals who are capable of liaising seamlessly with ad agencies and online media."
Portada: Do you have any plans to do direct response marketing through non-digital media?
Juan Imaz: "That is definitely not within our plans."
Juan Imaz has a long history in the direct marketing industry and the Internet, having founded his first company at age 23. In 1996, he created Mixmail.com, the first free web-based email, which was acquired by Deutsche Telecom in 1999. In 2000, he created Canalmail with support from private equity firms 3i and TALDE, and later with VSS through a secondary buyout. He is currently the CEO of the Media Response group.