Internet Marketing in Mexico, Reaching the take off point?
In many countries, internet marketing is the fastest growing sector of the marketing communications mix, reflecting consumers’ deepening involvement and participation in online content. So where does Mexico stand in the “online stakes”?
The latest OECD Global Internet Survey, shows Mexico to be well behind the global trend line, with a broadband penetration of 3.5%, versus the OECD average of 15%, translating to 3.7 million subscribers, with an annual growth rate again trailing the OECD average. Low penetration combined with a lack of secure payment systems and reliable delivery logistics has restricted internet marketing in Mexico mainly to the travel industry (for online hotel and airline reservations).
Information from AMIPCI (The Mexican Internet Association) provides a similar picture of Mexico moving from the first stage of internet development, basic e-mail and search activities, towards the second stage of enriched services, such as down-loading video, sharing music and playing games online.
Three factors could combine to dramatically improve the prospects for broadband penetration and internet marketing in Mexico: the Telmex position; the Triple Play and the Google factor.
As the dominant player in telecommunications in Mexico, Telmex has a huge vested interest in the growth of broadband, so has to assume much of the responsibility for selling broadband capable PCs and laptops, to run their Prodigy service. This summer Telmex mounted a strong marketing and mass advertising effort for laptops, in parallel with a campaign for Prodigy broadband services. This effort, if maintained at current levels, has the potential to double the broadband penetration in Mexico to 7% this year.
Then there is the emerging Triple Play market in Mexico: TV, telephone and broadband internet bundled into one service. Two other significant players will soon be joining Telmex in the Triple play market: Televisa and TV Azteca. Given the high stakes and considerable resources of the participants, the effect of this could mean a further dramatic acceleration in broadband penetration in Mexico, up to 15% (the current OECD average) within 2 years. That would translate to around 20 million broadband subscribers by the end of 2009.
This potential has not escaped the attention of Google, the dominant player in internet search marketing. As broadband penetration grows so does the market for search marketing, so Google is already moving to establish a presence in Mexico and Latin America.
Google has achieved an unrivaled position in search marketing, due to its use of unique search formulas (algorithms) to guide clients (companies and individuals) to customers that are actively seeking information on products and services. Mexico, with a potential 20 million broadband subscribers by the end of 2009, represents a perfect tipping point for the Google model.
So, the Telmex position, the Triple Play and the Google factor represent three powerful drivers to take internet marketing in Mexico to a significant take off point. So, fasten your seat belts!
(Sources: OECD, AMIPCI and The Economist)
