The Mexican economy is undergoing major structural changes. What impact will these changes have on economic growth and, particularly, on the advertising and media market? To shed light on the above questions, our Annual Foro Mexico de Publicidad y Medios (#PortadaMex) included a high quality panel on “El mercado de la publicidad y medios mexicanos en 2015. Las expectativas.” (The mexican advertising and media market in 2015.What to expect.) The panel was moderated by Santiago Duran, Digital & Strategy Group Director, Havas Media; and also included Leonardo Zúñiga, Business Group Manager Automotive, Aftermarket Division, 3M; Lucas Mentasti, Managing Director Latin America, Xaxis; Jorg Nowak, VP Emerging Markets, YuMe, and Abraham Geifman, Marketing and E-Commerce Solutions Consultant, IBM. Below a summary of the main things these major players had to say:
Santiago Duran: A political panel is not an easy thing, but it is also a must, given that economics and politics obviously impacts marketing and media in Mexico.
1- Mexico adopted a number of structural reforms and we would like to know, How do you assess these structural reforms? Do you think they will help the marketing and media sector?
Jorg Nowak: “The Energy reform is positive because it creates rules for all and puts an end to monopolies and created a competitive environment in which prices fall and demand increase. We will see the impact of this reform in two years. The same applies to the tax reform. Although it will take some time, we have to think that it was made in an electoral context, which seeks to generate revenue for infrastructure. Both of these reforms will take time to really impact the Mexican economy.”
Abraham Geifman: “These reforms, in one way or another, do impact the industry and customers. There is an impact of perception. At first, generating fear in clients, advertisers and even the media; That is a paradigm that needs to be broken.The most important reform to the media business is the one on Telecommunications since it opens new channels, new media, tv stations, new cell phone companies, and that really benefits the industry. Now companies that previously could not invest in the TV and media markets will be granted access.”
Lucas Mentasti: “In Miami, where Xaxis headquarters are located, we have noticed that Mexico is opening to the world”
Leonardo Zuniga: “We understand these reforms as a huge opportunity. With 37 businesses in which 3M currently works, there is a great array of things to be done. That will definitely influence us.”
Santiago Duran: “We have a rather optimistic view, because although it will not be right away, there will be more demand and access to new investors. There is an intention of opening the economy and have a more contemporary approach.”
2-There are two major TV networks In Mexico and the government is setting one Network up for competition with an additional license. How Will this impact the Mexican TV and Media markets.?
Leonardo Zúñiga: Competition will probably increase in both markets and customers. The outlook is very different, because there will be new platforms, offers and budgets. All companies will have to adjust their budgets. This will be productive for all.
Jorg Nowak: “Both the content offerings and the competition are increasing, benefiting consumers. Current networks, like Grupo Televisa and TV Azteca, should compete more and create more products for the digital area; where there are more opportunities for marketing especially with more segmented audiences. The world is changing. Nowadays, if you look at students in universities, no one has a TV, because students have other platforms like online video. This sort of minimizes the impact of adding an additional TV Network in Mexico”
Abraham Geifman: “The operator of the new television network will face two challenges: To understand that television no longer has the monopoly on audiovisual content and be ready to use new technological platforms. The other challenge, and also opportunity, is to provide the right content for perhaps untapped audiences in Mexico.”
3-The digital advertising market has grown in Mexico. According to IAB Mexico, the annual growth rate is of 31%. Does this figure make sense according to what you are seeing in your day-to-day business?
Abraham Geifman: “Digital marketing, because it requires smaller budgets, has provided access to small and medium-sized companies that did not have any chance to advertise before. So, a 30% growth rate makes sense to me. ”
Jorg Nowak: “The percentage could be revised … or not. E Marketer expects a 27%, IAB, 31%, then the difference is not that much. What we should see is a great opportunity, because even if economic growth is poor, it’s time to do more with less; it’s time to complement and take advantage of great opportunities, metrics and digital video reach.”
Lucas Mentasti: “It is a realistic figure, perhaps growth may be even higher. Interestingly, it does not come from large companies, but small businesses.”
4-If I ask you to think of a number that best represents your goal for 2015, what would it be? What is the number that does not let you sleep?
Leonardo Zuniga: “A double-digit growth number that implies great opportunities and challenges. The exact number could be between 15 and 20%. The company is willing to invest, to create opportunities for everybody. Advertising makes a big difference.”
Lucas Mentasti:”Xaxis was founded two years ago; then I expect a growth rate of 150%.”
Jorg Nowak: “100. Our objective is to have a deep dialogue with the top one hundred advertisers in Mexico; understand their problems and make them see the opportunities out there.”
5 -And, what are you worried about?
Abraham Geifman: I am extremely concerned, about the low-level of matury of many retail companies when it comes to digital marketing. A number of tools should be considered, to educate the clients”
Jorg Nowak: “The challenge is to focus. To pay attention to every advertiser, understand their needs, and introduce solutions.”
Lucas Mentasti: “To overcome the barrier of feeling overwhelmed each day. Convince oneself and have that extra share of energy to change the world.”
Leonardo Zuniga: “I am concerned about how we implement strategies and to run them efficiently.”
6-Next year there will be elections. How do you think that will impact the advertising market?
Leonardo Zuniga: “We see beyond the political issue, we see reforms as an opportunity. The setting has changed, but we need to be smart to take advantage of opportunities.”
Lucas Mentasti:” I am not that aware of what is going on in Mexico, but in Miami there is a lot of targeted political advertising and that speaks of the opportunities that are opening to a more segmented marketing.”
Jorg Nowak: “Political elections are a great opportunity when it comes to digital marketing as digital marketing budgets are significantly lower than TV budgets.
Abraham Geifman: “The challenge will be to introduce other media than TV into the mix that add impact and creativity.”