Tag Archives: Hernan Cieri

Expand- web brand

Expanding Your Web Brand into Latin America

Just Brazil alone has 102 million Internet users. Overall, Latin America will have nearly 300 million Internet users by the end of 2013 and nearly 400 million by 2017.

With these numbers, it should be pretty simple for a web brand to reap the revenues from such a large audience, right?

Wrong.

As one of the pioneers in Internet advertising in Latin America, we at US Media Consulting were considered to be, shall we say, a bit eccentric when we launched in 2003. No one believed that Internet would take off in the region any time soon, especially since the dotcom bubble had recently burst in more mature markets. But we saw the potential and have benefited from the growth. Along the way, we learned a few things—including the challenges that web brands face in trying to expand into Latin America. Some of these include:

Multiple Markets
More often that you would think, brands that are new to the Latin American market tend to see it as monolithic. It’s clearly not. Brazil, for example, not only has a different language but also a unique business climate that’s often quite protectionist. Setting up a local office to do business there can be quite a challenge, with issues ranging from tariffs and moving currency to how agencies operate. For example, in the United States you have creative agencies to produce ads and media agencies to handle the planning, buying and implementation of the campaign in media outlets. In Brazil, agencies do both, changing the operational dynamic and often complicating execution.
Market conditions are different in Argentina, and they’re also different in Peru, Mexico, Colombia and other markets. Each market has their own way of operating and distinct business climates that need to be navigated properly to avoid pitfalls that impede profits.

Currency
With Latin America there isn’t just a concern about the different currencies (reales vs. pesos vs. nuevos soles, for example), there’s also the IVA tax, the challenge of conversion and local laws regarding the movement of monies between countries. Tariffs, penalties and attorney fees can easily erase profits, thus sabotaging a nascent operation.

Management
With the variety of markets and climates, a web brand may need to do some substantial hiring to find the right people to represent their brand in these markets. But it’s not easy for team members from outside the region to evaluate professionals in these markets and get a direct sense of their know-how and connections. And with multiple markets, multiple teams in different countries are needed, with a home office team also needed to ensure that things run smoothly. The costs for all of these team members can become quite significant, starting off operations with a loss on the books and what can be a substantial trial and error process as a brand learns each market, develops best practices and eventually (if all works out) turns a profit.

Logistics
The rules for opening and operating subsidiaries in Latin America vary widely from country to country, as do tax laws and practices, not to mention human resources practices, the amount of holidays (did you know that Colombia has 18 national holidays every year?), employment terms and more. A web brand that’s flush with funding but is still growing may find itself hamstrung by all the steps needed to open a Latam office or office—plus all the fees to attorneys and other professionals just for navigating the basics.

Revenue Models
Another concern is determining whether the revenue model for your brand is applicable to Latin America. While a CPM campaign is pretty much the same here or there, obviously different sites have their own advertising models cued to user behavior. And without a clear understanding of the markets in the region, you could find yourself trying to make an unworkable model work.

The Strategic Solution
Rather than going it alone when expanding to Latin America, many web brands opt to find a partner. That’s where a firm like US Media Consulting can make a huge difference. Here’s how:

  • Extensive market knowledge going back more than 10 years
    Solves: multiple market concerns, revenue models
  • Local offices in 6 Latam markets
    Solves: logistics issues, currency concerns, billing, collections and moving monies
  • Local sales staff, all online specialists
    Solves: learning local markets, building contacts, hiring/employment problems
  • Company headquarters in Miami
    Solves: management in multiple markets, marketing

 

To find out more about how we can help web brands maximize Latin America’s 300-million audience of Internet users, please contact us.

5 Web Brands Expanding into Latin America

As we noted in another recent post, Latin America will have around 300 million Internet users by the end of 2013 and nearly 400 million by 2017. So it’s not surprising to see a number of new launches into the region by a variety of web brands. Here’s quick roundup of recent entries into the Latam online marketplace.

Rdio, an ad-free music subscription service, recently announced that it has expanded to Colombia and Chile. Its Latam footprint still isn’t huge—the other countries it’s available in are Mexico (since March 2013) and Brazil (since 2011). However, it should be interesting if it continues to grow in the region and compete against players like Deezer and iTunes.

Geonick, a social network originally launched in Spain, is starting to become available in several Latin American countries, including Argentina, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru, Uruguay and Venezuela. Geonick uses geolocalization so that users can find other who users who share their hobbies.

In June 2013 eToro, a social trading and investment network, launched operations in Chile as part of an effort to expand into Latin America. The site allows users to see which of them have made the best investment choices, learn from them and even copy their portfolio.

Tuenti, a self-described communications platform that combines social media and instant messaging elements, has brought its features to several Latam markets, including Mexico, Chile, Argentina, Colombia and Peru. Tuenti differentiates between friends and contacts. Users can only chat with contacts, but with friends they can do more, such as giving them access to their personal profiles and sharing information and photos. User can also chat with friends and contacts in private “rooms” and user info is not indexed by Google or other search engines to maintain privacy.

VK, a Russian social networking site, recently launched in Peru. According to Fernando Gonzalez, VK’s representative in Peru, the site has 30,000 users in the country. González said that VK aims to get 1 million users in Peru by 2014 and double that number by 2015, using Peru as a base for further expansion in Latin America. On VK, users can exchange messages, post news, maps and documents. The site also has two types of communities: groups and public pages. Similar to Facebook, VK has like buttons, but liked content doesn’t get pushed to the user’s wall; instead, it’s saved in a private Favorites section.

To find out how we can help you reach Internet users in Latin America via display, mobile, retargeting within Facebook and other means, please contact us.

internet

Latin America’s Internet Audience Reaches 300 Million

In Latam, the Internet is apparently expanding even more than we thought. Earlier this year we released a report using 2012 figures that indicated that Latin America had 232 million Internet users. But new figures from eMarketer indicated that by the end of 2013 Latin America will have 299.5 million Internet users. The region’s overall population is at around 598 million, suggesting that Internet penetration is now at 50%.

This represents massive growth compared to the previous decade. For instance, according to Venezuelan research firm Tendencias Digitales, in 2005 there were 78.5 million Internet users in Latin America, which indicates that the region’s Internet audience has nearly quadrupled in less than a decade.

What’s Next
According to eMarketer, by 2017 there will be 394 million Internet users in Latin America and overall Internet penetration of 63%. Social media seem to be the best way to reach these Internet users, since 7 of 10 Latam Internet users go on social networks at least once a month. By 2017 the social networking audience in Latin America will reach 324 million, estimates eMarketer. As we’ve discussed previously, Facebook leads the social media pack in Latin America, and beyond ads or promoted posts, a new tactic known as retargeting via Facebook Exchange seems to offer some potential for leveraging Facebook’s audience of 200 million Latin American users. That said, a number of newer social media sites offer potential for brands, as does mobile advertising, especially since mobile devices have become a popular way for Latin Americans to connect to social networks.

Turning Reach into Revenue
Of course, these numbers aren’t just market indicators for advertisers making plans for their digital investment in 2014. They are also important for web brands from the United States and the rest of the world: there is a huge, rapidly growing audience in Latin America for these brands—as long as they know how to reach them.
The quickest and most effective way to do this is by working with an experienced partner that has both the contacts and the know-how to spike regional revenues. To that end, we’re currently working on partnerships with a number of brands to help them turn their Latin American reach into Latin American revenues.

To find out more about how we can help advertisers optimize their digital investment in Latin America or help brands leverage their audiences in the region, please contact us.