MEDIA BUYERS EXPAND SIGHTS;LATIN AMERICA PROVING TO BE FERTILE NEW GROUND

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[mexico city] The powerful media buying groups that have lured marketers in Europe with an irresistible combination of volume-based discounts and more sophisticated media planning are targeting Latin America.

Media Planning, a Madrid-based media specialist that is Spain's largest buyer, has grabbed 17 big clients and an 8% to 9% share of all Mexican media buying from sleepy ad agencies since its spring 1995 opening in Mexico. Next year, it plans to head south.

PLAN FOR LATIN AMERICA

"We would like to open a new market [in Latin America] every two years," said Fernando Rodes, Media Planning's CEO for global operations.

Media Planning quickly beat its first-year target of three clients and 25 staff members. The company's 17 advertisers include Nestle, Kraft Foods and Christian Dior; a staff of 75 has been hired so far. Billings this year should top $100 million.

Besides passing on volume discounts, Media Planning charges clients a commission of 1% to 2% on media buying, which they say is less than most agencies would charge.

"You spend less money and get a better service," said Halim Trujillo, Nestle's media coordinator in Mexico. "We've reduced our [media-buying] costs by 60%."

Media Planning's rapid success with advertisers has stunned rivals-and confounded critics who think Mexico isn't the kind of volume-driven market where media-buying groups thrive.

"The media-planning concept was a shock to local agency business... We were behind in media, we weren't investing enough," said Gunther Saupe, president of Ammirati Puris Lintas, Mexico City.

SHIFTING RESOURCES

Mr. Saupe's agency is leading the Latin American launch of its own media-buying group, called Initiative Media. Carolyn Libby, Lintas' newly appointed regional media director, has moved to Santiago, Chile, from New York to oversee the opening of the first Initiative Media office in Latin America. Unilever, the giant Anglo-Dutch detergents and toiletries marketer, will be the main client.

"We want our systems up and running in Chile and then we'll decide where [else] will be the most appropriate market to work with," Ms. Libby said. Initiative already operates in Europe.

The Mexican Association of Advertising Agencies also is setting up its own media-buying group called Nexus, with more than 10 of the country's leading international agencies committed to joining.

Speculation is rife that Carat, Europe's largest media buyer, will make a Latin American move soon, following the opening of a Hong Kong office in March.

"We're looking at markets, but we have no immediate plans," said Brian Jacobs, Carat's media development director.

Other media-buying groups are also looking.

"Grey's objective is to expand MediaCom globally," said Mike Townsin, Grey International's London-based worldwide media director. So far MediaCom, Grey's separate media-buying arm, has only one office outside Europe-in Hong Kong.

In Mexico, there has traditionally been little room for price negotiations or sophisticated media planning due to the near-monopoly held by Grupo Televisa over 79% of all TV advertising. Televisa requires advertisers to pay a year in advance for most of their Televisa spots and they can't negotiate specific time slots or programs.

That may be changing. Nestle's Mr. Trujillo sees more room for media negotiation with the arrival in Mexico of cable TV and the growth of Televisi¢n Azteca, Televisa's main rival.

"You pay for the ratings points you get" on Azteca, he said. "You pay for what [the advertising] is worth."

While Televisa's recession-hit advertisers have slashed spending so that Televisa reported a $53 million loss for first quarter, 1996, Azteca has benefited from their switch to cheaper media. Azteca's ad sales grew by 16% in 1995, giving the network an 18.5% share of Mexico's TV ad market.

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