We’ve stopped what we are doing and creating your personalized BrandZ™ report, which will appear in your inbox soon.

Peru: A market infected by fútbol fever and the 2018 worldcup

 

The last few years have meant a high and mighty challenge for the advertisement and media market in Peru. After a decade of steady growth in the range of 300% (starting in 2013 it went from 180 to 660 millions per year), the Peruvian advertising market has remained indubitably flat.

 

The slowing down of the Peruvian economy, the intestine political turmoil incited by the former, the corruption cases brought to the public eye, such as the Brazilian construction corporation Odebretch, just to name one instance, and the natural disasters brought on by El Niño phenomenon in the northern region—these are some of the causes of the same slowdown of the advertising market in Perú.

 

Despite all these adversities, and after two long years, the Peruvian national team earned a spot in the 2018 soccer World Cup in Russia.  Perú was the last country to classify, after the qualification rounds in South America and a repêchage round with New Zealand. The two repechage matches made historic TV ratings with almost 40 points (source: Kantar Ibope Media). Perú is back in a World Cup  after 36 years. This milestone was experienced like a typical Latin American soup opera: every match was full of drama and uncertainty that Peruvians faithfully followed, and with an ending that made their dreams come true.

 

This is why we are soon to experience not only our first World Cup  of this century, but also the first digital World Cup. From 1982 until now, practically every mass medium has been drastically transformed and changed. In this sense, both the audience and the advertisers in Perú are readying up for the soccer fest that will be Russia 2018. Our protagonist will be a revitalized team that instills passion to the Peruvian people.

 

This fact, for us, translates into a 10% growth of the advertising market for 2018. In this context categories, products, and brands are playing a World Cup of their own. Categories such as beverages, snacks, beer, sports attire, and other “sport adjacent” categories, mainly connected to soccer, are preparing promotions, campaigns, and other activities to encourage consumption. This couldn’t have happened at a better time; according to KWP data, consumption has slowed down strongly in recent years. 2017 is rated the year of the worst contraction of consumption in the past seven years. Other categories that have jumped at the opportunity to encourage consumption are banks, insurance, the auto industry, and even home improvement stores. All this thanks to the fútbol fever.

 

In this context, the question we hear continuously from several of our clients and marketing people is: will this fútbol fever help with our brand’s building or strengthening? And our answer never changes: It depends.  Just like with every and any thing that belongs in the world of marketing,  advertising, and business—it depends.

 

Brands are not built after one event, neither with just soccer. They’re built in the day-to-day, in the point of sale, in the mass media communications, in the interaction through their digital assets, and above all, in time. Determination is paramount in our communications.

 

 

Then, will the worldcup be beneficial to Perú? Yes. An unequivocal yes. Since last year, more than one hundred thousand licensed national team jerseys have been sold. A 60% growth is predicted in the sale of TVs compared to a year without a World Cup. A 40% growth is predicted in consumption outside the home. This means that from a consumption perspective, and also from a national economy perspective as well, a conservative bet would be to predict a growth hiccup with the World Cup. However, with our brands, we have to be consistent and determined with what we do, in order to bring a real and sustained growth.