The panregional media market is growing at the very high rate of over 20% per year. This is the result of the high rate of economic growth in Latin America this year, driven largely by high commodity prices.
The digital media market has been at the forefront of this boom. Not only are U.S. based advertisers, like Hewlett Packard, executing more media buys targeting Latin Americans, but they are increasingly targeting U.S, Hispanics by placing in their home country newspapers (e.g. Peru’s El Comercio). Portada estimates that as much as 20% of Hispanic online advertising market is geotargeted, representing approximately $30 million dollars.
And digital media has a very high growth potential, particularly in the U.S., where it is expected to surpass TV as the prime advertising vehicle by 2011. In Latin America, TV will be the most important advertising delivery vehicle for the foreseeable future, due to lower Internet penetration in Latin America. However, U.S. and Europe-based advertisers are more interested in reaching high purchasing power Latin Americans and these have been online for a long time.
What about print?
Print media buys are also increasing (e.g. America Economia) as a result of the booming Latin American economies. Miami-based Publicitas/Charney Palacios—for decades the market leader in Latin American print media advertising sales representation—this year expanded its team and its marketing efforts to include its LatAm clients’ websites (Grupo de Diarios America) and include it in its offering to advertisers. So did Publicitas affiliate Zanox.
Panregional ad sales representation firms act as an extended arm of Latin America based media properties. Latin American media sales executives are extremely busy with their national advertising markets and are focused in growing their business locally. International, often Miami based, Ad Sales Representation Firms, offer them a huge opportunity for growing their business internationally online and in print.
Interestingly, newer players that started out in the panregional digital media ad sales representation business, like Miami-based Media Consulting Group and Argentinean Chasqui International, are expanding into print media representation because they want to expand their product offerings. The main factor, however, is purely financial. While the average size of a panregional online advertising campaign is between $25,000 and $75,000, that same average investment is much higher for print media campaigns—between $300,000 and $600,000. Advertising sales representation firms charge approximately 15% commission; thus, one average print media deal is much more lucrative than the average online advertising deal.
Jun. 11, 2007: Analysis: The Increasing Importance of the Panregional U.S. and Latin American Marketplace