Don't Be Fooled By Argentina's Old World Feel

With multiple transactions completed for companies based in Buenos Aires, Argentina and several current engagements, not to mention our partner, Damian Voltes, being based there, GroupArgent is no stranger to this city.  That said, I was anxious to make my first trip this month and experience first-hand the second most populous metropolitan area in South America and its burgeoning entrepreneurial internet and data community.

Everything I had heard about this city from an architectural and culinary perspective proved to be pleasantly accurate.  Avenues in Recoleta truly have an Old World, Parisian feel and Frederick Law Olmstead would have been impressed by the amount of green park space the portenos had the foresight to maintain, creating an inviting place to stroll or jog.  I was able to see areas of Palermo including Palermo Soho which possesses converted warehouse buildings that rival any to be found in the neighborhood it was named after, and Palermo Hollywood.  The city had a great vibe and I did not even get a chance to spend time in either Puerto Madero or Microcentro as apparently both are worth seeing.  And yes, meat there is quite an event, especially when paired with the country’s great, full-bodied Malbec wines.

This Old World feel, however, belies the savvy internet community that is thriving in this city and having a significant impact on the region.  I emphasize “region” because while the Kirchners keep the political environment interesting and online advertising spending within Argentina has not reached critical mass (it was just $83 million in 2009 according to ZenithOptimedia), the companies we have come in contact with are doing business throughout the region, not just Argentina.  Key areas such as Brazil, Mexico, Venezuela, Columbia and Chile are often part of their revenue mixes.  Granted, many are not yet deeply penetrated into Brazil and Mexico, but they are figuring those markets out more quickly than any U.S. or European based businesses we know of.  That said, Argentina’s online ad spend per internet user, at roughly $4, has room to expand given Mexico and Brazil are both over $6 yet Argentina possesses a higher GDP per capita, higher internet penetration rate and more advanced broadband infrastructure (see here) than either of those two countries.

The internet companies here, both on the services side and media side, have players with pedigrees from Google, Razorfish, Microsoft, Yahoo! and others and their plans are grand in nature.  Many are no longer simply waiting for U.S. or European based advertising agencies to supply them with campaign dollars from their clients’ budgets to fuel growth, but are forging direct relationships with the clients themselves and securing their own budgets.  They are paving the way for a deeper understanding of the region by advertisers.  Soon there will not be a reason for advertisers to wait for their current agency to find a "white label" service provider in Latin America to execute their campaign in the region.  Beware, Madison Avenue, you’ve been given notice.