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Thursday, May 23, 2013

Go Where TV is Still A Growth Market

A little over 20 years ago, I began to travel a great deal on business. Soon I was receiving automatic first class upgrades and people seemed a bit more talkative in the front of the plane.  I began to meet some interesting people and a few fascinating ones. Perhaps the one who made the biggest impression on me was a fellow who described himself as a “money runner.” He said that he had been investing money for years for people but was running out of ideas in the U.S and was thinking of relocating to Singapore or Hong Kong. “What about Silicon Valley?”, I asked. He started laughing and said, “Do you think I am a genius or something. No, I don’t understand tech and while some people are going to do great, a lot will lose their shirts. I want something closer to a sure thing.”

He went on to say that the Asia in the early 90’s was in the position of pre-Industrial revolution England. “That is something that I can sort out well. I don’t trust some of the accounting outside of Singapore but I know the basics. They are building roads, airports, and even putting up telephone wires for the first time in many areas. So, I can buy cement stocks, copper, and phone companies and I bet that I can do fine for me and my clients. You see, son, I have seen this movie before."

A year or two later, I saw him interviewed on the Financial News Network (later merged in to CNBC) and he had indeed relocated to Asia. An international marketer e-mailed me the other day with a problem and my conversation with the loquacious and prescient  “money runner” came back to me.

The marketer is someone whom I have known for many years and I consider him a friend. His problem was as follows: Domestic business has been fine but his real growth is coming from outside the US with particularly robust sales growth in Latin America. His agency is fairly large but is not affiliated with one of the mega-shops or large advertising holding companies that have offices across the world. The media plan submitted by the agency did not call for any TV in Latin America. He questioned them and they said that his online presence could stimulate Latin American sales as he freely admits that he does a lively mail order business across the globe. Social media is about 12% of his budget and will likely grow steadily over the next several years.

Stubbornly, he kept pushing for a TV campaign in three Latin American countries where sales had been explosive. The agency media people were resistant and said it would not work. He is a pleasant guy but a bit of a terrier and he kept probing. It seemed that the agency had never done any business in any of his targeted countries and the digital people at his shop did not want to lose part of “their” budget to conventional TV even if it were in an unconventional location. He went somewhere else for production and placement of the media in the three countries and things worked out very well.

The story is a sad one but it keeps happening at agencies that cannot or will not take a global view. It is obvious that when a middle class develops in a country they adopt American style habits. Recently, Directv reported that they had added 658,000 new subscribers in Latin America with particular gains in Mexico, Brazil, and Argentina. By 2021, they are projecting 56 million customers in Latin America.

So, my chance meeting with the money manager has a media moral. As nations grow, they do what those of us in the developing nations did a number of years ago. Why do you think the major soap companies and food processors are placing so much emphasis on Asia, Latin America, and Eastern Europe? Because, the growth potential there is explosive. I will even go out on a limb and say that in my lifetime North Korea will open up and will become a happy hunting group for marketers once a middle class develops and for manufacturers early on in the game looking for reasonably priced labor.

There are over 200 countries across the world. Each has its own unique culture and position in economic development. Ad agencies need to take note or even more of the business will go to the major advertising holding companies.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com;

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