Mexico Analysis: Comparison of category activity in 2007 versus 2006

The Selection of Categories was done to highlight significant change in the marketplace for a cross section of the entire category universe. The analysis is based on number of spots.

Other Markets... Argentina Analysis Brazil Analysis Venezuela Analysis

Highlight on Growth

Three categories showed significant growth in 2007. Fragrances improved by 38% over 2006; Beer/Liquor/Wine had a 68% gain and Wireless registered a 23% gain.

Fragrance growth was driven by PUIG, the Carolina Herrera product line with total increase of an impressive 123% Also L’Oreal increased their budget from 2006 which resulted in a growth in spots of 50%.

Beer/Liquor/Wine increases were driven by Cerveceria Cuauhtemoc Moctezuma and Cerveceria Modelo S.A. de C.V. with a 68% increase for this category. While others in this category like Diageo with a 75% decline and Bacardi & Company Limited which had a staggering 47% decrease. Furthermore, the increased budget and spots placed on Pay Television by Cerveceria Cuauhtemoc Moctezuma and Cerveceria Modelo more than made up for those decreases.

Wireless had a healthy growth in 2007. Unlike the Wireless growth in Argentina which was driven by telecomm equipment manufacturers, the growth in Mexico was driven by Telcel a telecomm carrier. In fact, even with the tremendous increase in spots by Sony Ericsson, they still trailed behind Telcel on the basis of spot activity in 2007.

Also, Automotive registered an overall increase of 4%. This growth was partly driven by Asian car manufactureres, such as Kia who increased its exposure by 201% and Hyundai Motor Company following with 170%. Fiat also went up by 141%. While Ford, focused on traditional spots and advertising, showing an increase of 35%, GM showed a decline of 8%. Nevertheless, it is important to mention that GM took an innovative approach by embracing promotions and advertising based on integration of their products into productions. An example is the partnership between GM and Paramount Pictures for the launch of the theatrical release “Transformers”. GM vehicles were part of the story line and GM used the publicity and their own promotions and advertising to launch and introduce new vehicles. In 2008, companies like this will be looking for even more innovative ways of advertising in a multimedia campaign. Other companies that reduced their exposure were Volkswagen Corporate that went down by 6%, Daimler Chrysler by 22%, Toyota Corporate by 42% and PSA Citroen Peugeot by 46% among others.

Understanding Market Declines

Declines were lead by Candy/Confectionary with a substantial drop of 39%. This was primarily driven by Cadbury Adams with a large 57% decline and Grupo Bimbo with an even larger 75% drop in number of spots.

The Baked Goods category was impacted by the decrease in number of spots of Grupo Bimbo who had a significant drop in activity of 44% in 2007.

The Personal Care/Hygiene: Deodorant category was significantly impacted by Unilever’s decision to reduce its advertising budget in 2007. This affected their product Rexona which showed a decline of 45% in number of spots in 2007. P&G also reduced its exposure in 2007 by 27%. Since the entire category had a 30% decline in 2007, the reduction of Unilever and P&G spending were the main drivers of this decline.

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