State of Internet Marketing in Puerto Rico

Yesterday the Asociación de Agencias Publicitarias held a roundtable workshop entitled “Internet Marketing Sí o No”. I debated long and hard about whether I should attend this workshop, but in the end I decided against it. Mostly I reasoned that based on the composition of the panelists, this was an old guard presentation oriented to justify their 1997 mentality regarding online marketing. The second thing that ultimately made me not attend was the title of the event itself. For me, the title struck me as ludicrous for this topic. Again, what year is it? If it were me, the title would have been "Internet Marketing: Of Course! or Disembowelment Before Your Shareholders ... You Choose."*

Why we are not partying like it's 1999!


In the next few points I'm going to prove that, in terms of the state of online marketing, Puerto Rico is stuck in the late 1990's. To do this I'm going to point out two things:

Not tracked separately

Right now, the advertising industry in Puerto Rico does not even track Online Advertising as its own category. In the last statistics available, which were from 2006, Internet is lumped into the catch-all "Other" category. While this is probably more a result of the performance of the sector as opposed to attention or interest, it certainly proves that online advertising doesn't even register to anyone in the local advertising industry.

Forget the spin, look to the numbers

Now while Carlos Moreno, Associate Director of Multimedia at Elnuevodia.com, said at yesterday's workshop:

"... que el mercadeo por internet es altamente eficiente en costos, y ofrece muchas ventajas que la promoción tradicional no puede igualar."
The actual statistics related to Internet advertising in Puerto Rico do not show that anyone agrees with him, or at least haven't up to this point. But let's not forget that there is over 13 years of data and analysis indicating that online advertising in the United States proves his conclusion correct. So it's not like he all of sudden figured out that online advertising was a good thing.

With a little research I'll now prove that Puerto Rico is at least 8 (and as many as 10) years behind the United States in the acceptance of online advertising. In 2006, Puerto Rico advertisement spending totaled $731.4 million. The "Other" category, which also includes alternative media such as bathroom ads, had $12.0 million in advertisement spending. Which gives us roughly 1.6%, give or take a few percentage points, depending on how much of the "Other" category is bathroom ads and how much is Internet ads. (Information from Caribbean Business).

In the United States during 1997 the overall advertisement spending was $180.6 billion. Overall advertising grew at 5.7% annually giving us approximately $189.6 in 1998 and $200.4 billion in 1999. Internet advertising had 907 million in 1997, for 0.5% of overall ad spending. In 1998 Internet ad spending was $1.9 billion and then grew to $4.6 billion in 1999. Respectively that gives us Internet ad spending in 1998 of 1% and 2.3% in 1999. (Information available from DoubleClick)

So there you have it. As a percentage of overall ad spending, Internet advertising in Puerto Rico is somewhere between 8 and 10 years behind the United States. Which leads me to the conclusion that there must be some form of group think at work in the local advertising industry. The evidence is overwhelming that Internet advertising, especially search engine marketing, which makes up over 40% of all Internet ad spending, is a proven and still rapidly growing media channel for advertising. So what gives? What are the barriers preventing advertising agencies and advertisers from participating in Internet advertising? What I do know, however, is that whoever does figure out what those barriers are and eliminates them is going to make a lot of money. Here's hoping that this person steps up to the table quickly and ignites the oncoming revolution.

* I relinquish all permissions to this creative work, so Asociación de Agencias Publicitarias, feel free to borrow my title for next year's roundtable.

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