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Esteban Lopez Blanco

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What: Entravision’s purchase of Headway officially closed on April 4. Portada talked with the main architects of the transaction: Headway CEO & Co-founder Martin Kogan and Esteban Lopez Blanco, Chief Strategy Officer at Entravision.
Why it matters: The rationales for the transaction offer interesting insights into the current state of the Latin American and U.S. Hispanic marketing industries.  Headway was  one of  the very few still independent digital media companies in the space.

Image result for Entravision Communications CorporationIn a conversation with Portada, Blanco and Kogan stress that digital marketing currently is having very high growth rates in Latin America. In fact, Headway’s Q1 2017/q1 2016  sales growth rate was of 90%.  “We expect a growth rate of more than 40% for many years to come,” Lopez Blanco notes. He adds that he estimates the share of digital revenues in Entravision’s overall revenues to climb from 20% currently to 30% by 2019 or 2020.

Several factors substantiate expectations of a very high growth rate over the next decade: Buyoed by the growth in Internet access in Latin America, smart phone penetration is growing at a very high rate. Headway’s Mobrain unit -an in-house mobile marketing platform- is benefiting of the growth in smart phone usage. Researcher Appsflyer, places Mobrain as the fifth most used mobile platform in Latin America, in a ranking led by Facebook, Google and Twitter. Mobrain offers advertisers solutions to achieve a high ROI and deal with challenges including fraud and the high fragmentation of mobile advertising inventory. Kogan emphasizes that Mobrain technology is “artificial intelligence applied to delivering KPI to marketers and  solving fragmentation and fraud challenges.”

A second rationale that underlies the purchase of Headway by Entravision is the growth of e-commerce in the Latin American and U.S. Hispanic markets.  According to Kogan, “in the age of artificial intelligence and marketing automation, technology that improves clients ROI needed to be created. ” This particularly applies to marketing and advertising strategies that ultimately convert Internet users into online buyers (e-commerce). The e-commerce space is in a relatively early stage in Latin America and that is why there is a lot of room for growth. Lopez Blanco claims that Entravision;s unit has set up partnerships with e-retailers for data cooperatives which allow a better targeting of U.S. Hispanic customers. “There are very few data cooperatives in Latin America; Headway’s open platform DMP DataXpand is one of the very few exceptions. “DataXpand is the biggest exchange in Latin America. There are enormous growth opportunities to make attribution models work,” notes Kogan.

There is a huge market outside of Facebook and Google which no serious advertiser can ignore.

Rounding Up Pulpo Media’s Offerings

Entravision made a substantial foray into  ad-tech when it bought Pulpo Media for US$ 15 million in 2014. Pulpo Media’s main strength are its publisher relations. “Perhaps oversimplified, Pulpo Meda is a  Supply Side Platform. We needed to go beyond that to look at other uses of technology and ways to do programmatic  and focus on mobile,” Lopez Blanco notes. According to Lopez Blanco, Headway’s offerings round up Pulpo Media’s products very well. In addition to mobile marketing platform Mobrain and DMP DataXpand, Headway offers other solutions with propietary technology, Kogan and Lopez Blanco claim. These include  DSP MediaMath, which Headway resells and manages in Latin America.
“Headway has developed special algorithms on top of Mediamath”, says Kogan.
Both Kogan and Lopez Blanco expect that Pulpo Media’s strong datasets about the U.S. Hispanic consumer and Headway’s for Latin America will  be excellent complements when it comes to increase advertiser ROI in the U.S. Hispanic and Latin American markets.

 

 

 

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What: Entravision is buying digital advertising company Headway.  The transaction has been financed by cash on hand and is expected to close in the early second quarter, Esteban Lopez Blanco, Entravision’s Chief Strategy Officer, tells Portada. Entravision’s Pulpo Media and Headway will continue to serve clients on a stand-alone basis. Entravision’s stock was up 12% in early trading this morning in the New York Stock exchange.
Why it matters: With this acquisition Entravision, who bought Pulpo Media in 2014, substantially rounds up its suite of ad-tech services both in the U.S as well as Latin America. The company has stated that it intends to increase the share of digital revenues to 20% of total revenues.  The transaction also reflects consolidation in the Latin digital marketing space.

Image result for Entravision Communications CorporationEntravision Communications Corporation is acquiring Buenos Aires, Argentina headquartered marketing-tech firm Headway. Headway has 18 offices around the world that work and provide services including DMP (with its DataXpand unit), mobile branding and performance for app downloads (MoBrain), to programmatic trading, Mediamath representation in Spanish-speaking Latin America, and video and native advertising (Headway recently launched an exchange for Spanish-language native advertising). Bringing in Headway into the Entravision umbrella should help Entravision/Pulpo Media expand the programmatic marketing capabilities through Headway’s strong relationship with MediaMath, which combines advanced marketing software with global reach and scale.  The transaction, which will be funded from the Entravision’s cash on hand, is expected to close early in the second quarter. Additional terms were not disclosed.

Esteban Lopez Blanco
Esteban Lopez Blanco, Chief Strategy Officer at Entravision.

“This purchase will provide synergies with our more than 300 local and national sales team members in the U.S., and the Latin America region. It brings huge opportunities as digital ad spend, e-commerce, internet and smart phone penetration will continue to grow at accelerated rates for many years as compared to the U.S. market,” says Esteban Lopez Blanco, Chief Strategy Officer at Entravision.

The key strategic driver in for this transaction is in the product frontend and data backend integration opportunities which we believe will enhance both Pulpo’s and Headway’s offerings.

Both Pulpo and Headway will continue to serve their clients on a stand-alone basis. Blanco notes that “Headway and Pulpo are strong brands in their own right and provide their clients with a broad portfolio of solutions to proactively engage consumers. The two companies will continue to serve their clients on a standalone basis and each will benefit from the integration of their combined products data and inventories to the benefit of their respective advertisers, agencies and publishers. According to Entravision’s Chief Strategy Officer, Esteban Lopez Blanco,  Headway provides “professionally managed services that enable agencies to advance their programmatic capabilities. Headway and Pulpo are highly complementary and each will benefit from the integration of their combined data and inventories.”

Stronger Footing in Latin America

Image result for headway mediaLopez Blanco tells Portada that, “with Pulpo and Headway we are able to provide marketers a more comprehensive footprint, reaching the entire US and Latin America marketplace. Pulpo Publishers network is ranked in the top 5 in reach as rated by comScore in Argentina, Mexico, Columbia, Chile and Peru and the addition of Headway will allow us to expand our combined reach and better serve clients of both companies.

Founded in 2010, Headway is headquartered in Buenos Aires, Argentina and has 152 employees in 18 offices principally located in North and South America.  Following the closing of the transaction, Martin Kogan will continue to lead the company as Chief Executive Officer, with Agustin Echavarría Coll continuing to serve as Chief Revenue Officer.