When will Mexico's moment come?
As of 2019, 5 editions of the AGENCY SCOPE have been completed in Mexico and here at SCOPEN we know this dynamic market well, in which we’ve spent 10 years analysing the communications industry.
Since we started research operations in Mexico, we’ve thought an explosion would be triggered in this fascinating country, in terms of growth at all levels. A lot of potential still exists for this to happen, but different circumstances influence the ongoing delays in the arrival of this economic boom.
After a few months of expectations following political change, there now exists a very real worry surrounding the decisions of the new government in their economic plan. There has been systematic withholding of funds for public spending, with a few notorious examples, such as: the suspension of works for a new airport in Mexico City, which is viewed as being a major air travel hub, not just for the country, but also for Central America; or the suspension of the Mexico Tourism Board’s activities (which help to attract millions of tourists to Mexico every year and contribute currency and job generation in the country); different public and infrastructural works suspended and private projects in Mexico City kept waiting to be given work permits. Justification for preventing corruption has stopped the distribution of medication to even people with chronic illnesses, whilst at the same time they are investigating where the corrupt bodies who steal and distribute medicines are. Mexico is a country which needs public investment and who’s Federal Administration is a driver for development. If the state doesn’t invest, the economy won’t grow, and confidence indices will plummet. Many people talk about AMLO acting like a protective grandfather and that his only objective is to save and not spend, but all economic indicators have fallen so far this year. Not even consumption, which was anticipated to have grown since AMLO arrived in office, is improving. Unemployment is also seen as being affected and nobody thinks the situation is going to change.
The impact in our industry is worrying, because of the discouraging economic situation. Some advertisers’ budgets are frozen and actions which have been waiting for development throughout 2019 have not been started.
In the agencies plan, the most relevant thing is the presence and consolidation of independent agencies. Experienced entrepreneurial talent coming from multinational agencies together with the existence of smaller budgets which sometimes aren’t attractive to larger agencies, has facilitated the proliferation of smaller structures. Their good work and the direct involvement of leaders in daily contact with clients has created a climate of confidence in them which allows them to proceed with larger projects.
The growth of positions, both in marketers and agencies, is tied to Digital areas; Data, Technology, Innovation, Transformation etc. being very relevant. Advertisers’ budgets in Digital areas has risen 11% in the last two years (representing 34% of all investments in communication compared to 23% in 2017). Investments in Digital areas in Mexico are now at the same levels as Spain and Argentina.
In 2019 marketers’ desires were more focused on receiving support from agencies on strategic planning and receiving integrated services capabilities, despite there being a real mistrust about the actual internal integration of services in the agency. We’ve seen a boom in strategic planning in other countries and it has also happened in Mexico, where we see more publicly admired planners and with indices of public knowledge and attraction to work with similar to creative directors.
With relation to having an integrated services offer rather than an integrated agency offer, which marketers understand doesn’t exist (due to not being able to count on talent for all disciplines and said talent not being up to date), marketers are starting to value ‘integration’ agencies, which offer talent and resulting capabilities from different agents, identified and coordinated from a customer-facing agent. Some agencies in Mexico are well-positioned as lead agencies and lead the multiple companies that work under the orders of marketing directors, and that can constitute an opportunity for specialisation in services and the recovery of strategy as a joint value with trust.
In aspects which still need to be improved, and which agencies should reinforce in order to satisfy marketers’ needs in the best possible way, attention to follow-ups and an increase in proactivity were highlighted. Both aspects are related to each other, and the appropriate identification of opportunities in the ongoing relationship with the customer can help achieve better results with budgets more centred on real needs, to which marketing directors would be more receptive. The excessive rotation of teams is one of the biggest criticisms from clients; with changes in accounts that don’t help neither good follow up nor more success in proactivity.
The challenges which marketers are facing are, above all, relating to a better understanding of the evolution of the customer, of trends, the media and contact points, to be able to reach a more distracted customer better and allow sales to increase. Marketing Directors realise that Data and Technology are key for innovation, differentiation and transformation of sales processes, but they don’t always find adequate providers who point them in the right direction regarding how much to invest, how to invest and where. Mexican marketers don’t consider the largest agencies, and neither are they well prepared enough to offer alternative solutions to the ones proposed by agencies. Google is consolidating its positions and is seen by marketers as the agency which is best placed to help them face their future challenges.
One of Mexico’s problems is the inertia which slows down the decision-making progress, which over time is being dragged out even further, even though everything seems like it’s going to happen right now. In the 10 years that we’ve been involved in this market, which has so much potential, we’ve realised that questions such as the fluctuation of the dollar, the price of oil, Trump’s attacks or now, the new government’s adaptation period, are greatly affecting the economy and are used to justify the lack of flexibility in taking decisions. The challenge of modernity is compatible with the new practises of transparency which are rescuing the country from the chronic path of corruption which is affecting the countries international reputation.
Company executives which promote this modernisation approve of the President AMLO’s ethical wishes, but they lack the stances of being drivers of the economic dynamism which has taken the country to leadership positions in Latin America, to 1st in Latin America. The enormous potential of being able to demonstrate to the world the talent, resources, capability and development in Mexico are the best antidote in the face of attacks by Trump and I’m sure they will be used to wake up Mexican national pride with the help of the political class.