Venezuela 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.

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Highlight on Growth

Four categories showed significant increases in 2007 with all of them enjoying over a 20% growth. Fragrances improved by 22% over 2006. Financial Services: Banks & Svgs & Loans had a 29% gain. Toys was up by 26% and Pharmaceutical was also up by 21%.

Fragrances growth in spots was driven by Procter & Gamble and PUIG, the Carolina Herrera product lines which significantly increased their marketing expenditure. These increases were driven by Carolina Herrera’s Pan Regional launch of its new fragrances 212 Sexy and CH, while P&G countered by promoting its already existing brands.

The growth in Financial Services, Banks, Savings & Loans was primarily linked to Banco Mercantil that increased its activity by 203%. The reason for this huge jump was due to a major image campaign centered on the change of the corporate logo and message.

Toys grew primarily because Hasbro significantly raised their budget along the addition of two new advertisers in this category; Mega Blocks and SCS. Mega Blocks and SCS helped offset the fact that Mattel reduced their exposure in Pay Television by 15% in 2007.

Pharmaceutical’s boost was driven by companies trying to gain market share such as Boehringer Ingelheim, Galderma, Galeno Quimica, and C.A. These companies more than offset the fact that huge companies such as Pfizer and Roche decreased their activity by 100% and 50%, respectively.

Understanding Market Declines

Travel/Transportation: Airline had a decline of 44% during 2007 because key advertisers like American Airlines and Taca reduced their expenditures on Pay TV compared to 2006. However, Delta Airlines continued to make Pay TV a key part of their advertising strategies which resulted in Delta having 12% more total spots compared to 2006.

The Pet category’s decrease of 53% in 2007 was due to Effem and Nestle Purina which considerably diminished their presence in 2007 compared to previous years.

2007 was a challenging year for Pay Television in Venezuela. Many factors influenced advertisers’ decisions concerning their exposure in this market including the political and social instability combined with the non-renewal concession of RCTV and the negative effects of the exchange in currency from Bolivares to US$. This market will continue to be a challenging one in 2008.

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