Online Advertising in the Caribbean

During a recent trip to Puerto Rico, I had the pleasure of meeting with some industry compatriots, principals of local agency The Korber Group. In comparing notes, I discovered quickly that despite the fact that Puerto Rico is a U.S. territory, it and the rest of the Caribbean lags extremely far behind the U.S. when it comes to pretty much all things Internet. Below is some of the conversation I had with The Korber Group.

Hollis Thomases: Give me a little background. Where are you at here in the Caribbean?

The Korber Group: We came here in 2005, and back then there was really no online advertising going on whatsoever! Even now, although some progress has been made, it’s still very early stage and progressing slowly.

HT: Why is that?

TKG: There are many problems and forces at work:

  • Internet accessibility, particular broadband, is very limited.
  • There are relatively few regular Internet users (only about 25 percent of the population), and those who have it are not that savvy. Mostly they just use the Internet for e-mail. Of the audience browsing the Web, most are tourists or people with second homes here.
  • There’s chicken-and-the-egg problem with online retailing: people go online to research products, but many of the U.S. sites do not translate into Spanish nor do they ship to the Caribbean, all of which doesn’t help build demand for usage.
  • There is something of a toss-away mentality in that many companies think, “I have to have a Web site because everyone else has one, but do it cheap because it’s really not going to do anything for us.”
  • Generally speaking, most of the residential population in the Caribbean is lower income levels.
  • The Caribbean is multinational, so what works for one culture might not appeal to another. Plus, the island populations are so small, most advertisers don’t want to bother with cross-island marketing. In-Caribbean geotargeting by IP is virtually impossible; even search engines get confused and serve inappropriate results.
  • These cultures demand a lot of face-to-face interaction in order to do business. There is no such thing as virtual business relations here.
  • The weakened economy has left little money to experiment with advertising, and the Internet is considered experimental here.

HT: So what kinds of companies are doing online advertising here right now?

TKG: The tourism industry leads the charge, but their audience is really outside the area. Within the Caribbean, the top online advertisers right now are telecommunications, car dealerships, property developers, and financial institutions. This is not only a very naive market, but oddly, many of the advertisers do not want to be educated about reality. The recessionary times have stimulated interest in the Internet, but first-time advertisers have overly high expectations. They just want to hear that they can get results and get them immediately. Advertisers are getting so desperate for business that they’re vulnerable to scam artists who toss around buzzwords and tell them whatever the advertiser wants to hear, which then soils the overall market.

HT: Why the resistance to the truth?

TKG: A lot of it has to do with what the Internet has done for the U.S. and the rest of the world. Caribbean businesses just hear about and want the successes, but they don’t realize how far behind we are here both technically and contextually. Advertising opportunities are limited and only still sold on a flat-fee basis. There is no such thing as CPM, CPC, or CPA. Metrics are completely unreliable because sellers use “hits,” “page views,” and “visitors” interchangeably; media kit stats don’t add up. There’s no real way to target because neither publishers nor advertisers collect demographic information. We’re also hindered by cultural tendencies towards stubbornness and self-conviction.

HT: What about e-mail advertising, where does that stand?

TKG: It’s still completely the Wild West here! There are really no such things as legitimate double opt-in lists, and even if a subscriber tries to opt out, they usually continue to receive e-mails anyway. Here, both buyers and sellers focus on list quantity, not quality, so convincing them that a focused list is better is very difficult. The largest Puerto Rican newspaper‘s site is actually attempting to build a decent e-mail list along with demographic data, but they’ve made signing up for their bulletins very difficult to find and user unfriendly.

HT: Is it worth all this aggravation?

TKG: Yes, this market is huge, once it breaks through a few barriers.

HT: Well, good luck and gracias!

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