Paulo Castro, who was appointed CEO of Terra last July, has assumed the lead role at a crucial point in the company’s history. In this exclusive interview with Portada he assesses the Latin digital media market as well as Terra’s plans going forward:
PORTADA: Some market observers point out that there is an increasing amount of digital media sales done on a panregional basis (often from Miami into two or more Latam countries). Do you agree with this assessment? How do you see this going forward?
PC: “Yes, we are having more and more panregional deals, some decided from the U.S. (mostly Miami or NY) but also some from one of our Latin American countries (mostly Brazil, Argentina or Mexico). We do like and use the term “glocal”: we are global when the market demands a global approach or plan; we are local when the market demands a local perspective or business model. There is no standard recipe one can follow – this time and age have already shown everyone there is no such thing as a comfort zone anymore. You have to be quick, you have to adapt, and you have to adopt new ideas and positioning. Putting it in a very simple way, you have to be a real partner to your partners, no matter if they are local, regional or global.”
Portada: Outside of Brazil, which are the markets/countries in which Terra is present that have the highest growth potential?
Paulo Castro: “ Terra is growing in all its markets and for different reasons: In the U.S., aside from our increasing penetration in the Hispanic market, we are also growing among other groups, particularly in terms of sports content – and we are sure that our new soccer platform will reinforce and take this trend even further. In Spain, our youngest market – we are controlling the operation only for the last four months – we are having impressive figures and an ever-growing audience specially driven by the introduction of live events broadcasting, both in terms of sports and entertainment. The first offered was the Benicassim Festival. In Mexico, we have reached some important milestones as a portal, especially after the successful coverage of last year’s Panamerican Games in Guadalajara. Two areas that are worth mentioning are content on mobile devices and our Digital-out-of-home network.
Colombia, Peru and Venezuela are having significant momentum related to music content as we brought Terra Live Music to these markets and will also offer Planeta Terra in Lima and Bogota for the first time. In Argentina and Chile, Sonora and Sunday TV are performing superbly. In all Latin America, it is worth mentioning the rise of household incomes as well as broadband penetration, a combination that is a powerful force to drive audience, interested in first class content, to Terra.
In Spain, in spite of the economic crisis, the online media is presenting consistent growth of two digits per year, and we are also benefiting from the revolution brought to the media market by mobile devices. I daresay that Terra is living its most spectacular moment in its 13-year history, not only for internal reasons – content, performance, audience, rights acquisition, quality – but also due to external causes: the maturity of the online media, the new economic stability of the Latin American countries, the opportunity of spreading our successful model in Europe – with Portugal as the next market. It is really a great moment. It is Terra’s moment.”
PORTADA: What type of advertising do you see growing more in Latam, Display or search and why?
PC: “ More than trends, two points are a reality: advertisers want their brands and images to be associated with high quality content and their online media plans are based more and more on medium and long term strategies. As for categories on our portfolio, Mobile advertising and Digital out-of-home have the highest growth rate but still relatively low compared to digital display advertising. An example of that was our London 2012 Olympic project: it covered an 18-month period, allowing us to create new formats with sponsors and possibilities of linking their brands to Sports. The same goes with our music platform. Just to mention one example, among the 15 sponsors of Planeta Terra, twelve are renewing their sponsorships, in a clear statement of the strategic importance of the project”
PORTADA: Terra puts a lot of emphasis on broadcast sport and music events. How does this content strategy tie in with your advertising sales?
PC: “We understand that our role is to bring information and entertainment to the users in new ways other than the ones provided by the so-called traditional media. We have not originated from nor are part of a media group so we have no ties to the schedules, to the physical limitations that the traditional media normally have. There are no conflicts between platforms. The purchase of rights, exclusive or not, is a natural part of this proposal. But we are not limited to that. We must have content that will fulfill people's needs on a daily basis. This is what creates a media behavior, a habit. In this way, it is very simple to explain: is there any advertiser that is not interested in a 100-million people audience? We are talking about millions of people, connected, well informed, capable of setting consumer trends or political revolutions. And for the content owners this is also an important opportunity. Our investment in premium content is, at the same time, cause and consequence of this organic movement, both from the audience and the advertisers.”
PORTADA: You recently announced that you are expanding into Europe, bringing your successful online media model to Spain in the first instance. Question: Wasn’t Terra already in Spain in the late nineties?
PC: “Terra was born as a company in 1999. Shortly after that our holding company, Telefonica, opted for a double model: having a company responsible for the Latin America and U.S. region and in Spain, having a portal under the Telefonica España operation. Although having the same name, Terra, the two operations were completely distinct, including in terms of content. That smart decision gave the group the opportunity to test two different business models in two very distinct markets in the beginning of the 2000's: one younger, the other more mature; one that was on the verge of quitting a long economic disturbing period, the other with a more settled down perspective. The creation of Telefonica Digital, by the third quarter of 2011, presented the opportunity to the group of deciding on one business model. It happened to be ours and it is under this successful model that we are aiming to grow not only in Spain, but in other European markets, as I said previously beginning with Portugal, where we already have a substantial audience, in spite of not being physically there”
Paulo Castro is one of the co-founders of Nutec, the company that became Terra Latin America. Paulo was country Manager for Brazil, Terra’s largest market, before becoming CEO