From
Charles Costa
Advertising Reporting Director
Last week the main chambers of the sector presented for the first time the Communications Industry Observatory, afunified photo of the current situation of the business in the country. The initiative was born in 2021 when the presidents of the main entities related to institutional and marketing communication in Argentina created a dialogue space they called #REC (Communication Entity Network), seeking to boost the sector.
“We realized that a first project could be to measure our contribution in economic terms, job creation, export capacity, education, among other variables,” explains REC coordinator Carlos Mazalán. Thus was born this first sizing test of our sector, which we call the Communication Observatory”.
The project was attended by Agencias Argentinas (AA), the Argentine Chamber of Communication Agencies (CAAM), the Professional Council of Public Relations (ConsejoPR), the Círculo DirComs and Interact Argentina (agencies, producers and consultants of the digital ecosystem) and the Argentine Chamber of Advertisers with the support of the CPA and the DMA.
Moore Tejero’s studio worked on responses from 127 agencies and consultants and 61 advertisers/customers who have opened up their data to understand where we are and what the most pressing issues are. The study showed that the sector is made up of approximately 2,500 companies, which host 25,800 direct employees and over 80,000 indirect ones.
It is estimated that agencies and consultancies generate an annual income of US$771 million directly and US$5,181 million indirectly (media and suppliers) for the various activities and services they contract, accounting for 0.93% of the country’s GDP. However, the study indicates that the business still has room for growth of at least 30% in this regard.
“The results of the study clearly show how advertising and marketing not only drive a thriving communications industry that generates quality jobs and is internationally competitive, but also has an important multiplier effect on the rest of economic activity,” says Philip Perez, president. of the Argentine Chamber of Advertisers.
For his part, Santiago Olivera, president of Interact deepens: “The Communications Industry is one of the few transversal activities in all sectors. According to international economic studies, each weight invested in communication multiplies its impact on the economy by 7 to 9 times. This revitalizing ability is due to its positive effects on increasing sales, stimulating competition, improving competitiveness, creating jobs and also its contribution to culture, entertainment and sports. In the case of the Argentine market in particular, which grows 8.5% of the country’s GDP”. Talent, currency and map.
Of the participating companies, 72% export, and that number is slowly increasing each year. The lack of understanding and consideration of the business by government agencies over the years is one of the major weaknesses that the industry faces to continue growing. The exports of the sector are estimated at about 200 million dollars a year, but limitations are encountered: income and currency conversion, the lack of international agreements to avoid double taxation; the lack of investment and funding incentives to grow in other markets which makes positioning excessively slow. Only 7% of the 127 companies surveyed were able to register under the Knowledge Based Services Act as they need 70% export earnings to apply. On average this percentage is 29%. This it puts them at a clear competitive disadvantage compared to other related industriessuch as software services or audiovisual production which require a much lower export rate.
The quality of professional talent is beyond doubt the most outstanding force in the industry, as well as having a lower relative cost measured in dollars. But if the exchange rate continues to evolve unfavourably, it damages competitiveness. A lower profitability ends up causing less ability to pay better wages. In this business, talent is key and if it cannot be retained and migrates to other countries or sectors, it ends up generating a vicious circle for the sector. Less talent, less business. An alarming figure: out of the total number of personnel who leave a company, only 23% do so to go to work in another company of the same business or competitor, and almost 50% go to work in another company.
The world of agencies more it coexists with other obstacles that it shares with the rest of the industries: the impossibility of transferring cost increases and their continuous increase due to inflation, high tax burden and taxes on labour.
A final paragraph for a key theme that the study found: the need for a national law own sector for the Communications Industry as other activities have, with its correct articulation with the provincial legislation which allows the maximum exploitation of the virtues of this sector and its full growth capacity.
In this sense, the words of Matías Domínguez, president of the CAAM and of Alejandra Martínez, president of Círculo Dircoms are valid: “We have some ideas to advance in cross-training, in institutional dialogue with other actors and in everything we can do to join forces and enhance our development as an industry. We are convinced that we can grow if we get to know each other better and find the synergies and complementarities that exist between each segment”.
Source: Clarin
