Will Argentines See PromoRed?

No Limits launches an Internet bulletin board for Latin America.

Buenos Aires-based promotion agency No Limits is hoping to show consumers that, when it comes to promotions and the Internet, there may just be no limit.

The company later this month will roll out PromoRed.com, Latin America’s first promotion portal. The Web site will be chock full of promotions, coupons, interactive games, contests, and sweepstakes, all available at consumer fingertips.

Visitors to the site will be invited to register for free and select from a list of product categories including health, sports, tourism, and restaurants. Each category will contain a slew of promotional offers specific to that industry, including product samples and downloadable coupons. Registrants will be invited to submit their e-mail addresses to receive regular notices of new promotions related to their personal interests.

Permission-based marketing principles work well here, because consumers get what they want at the moment they want it and on their own terms, says Tito Loizeau, PromoRed.com’s ceo. No Limits plans to expand the operation from Argentina to Chile and Uruguay in the next six months, then Brazil, Paraguay, Peru, and Bolivia by the end of 2000.

PromoRed’s success will hinge greatly on the site’s ability to get leading brands to participate, Loizeau says. That appears to be happening so far, with top companies such as Unilever, MasterCard, Fuji, MultiCanal, Arcor, Musimundo, Freddo, and numerous restaurants, pubs, discos, and supermarkets already on the bandwagon.

Why? Maybe because PromoRed.com will compile a database of registrants’ interests, behaviors, and preferences into profiles that clients can utilize for future marketing efforts. Co-branding opportunities will also be made available to brands.

No Limits likens the venture to such U.S.-based operations as CoolSavings.com and Estakes.com, but believes PromoRed.com presents more promotional possibilities under one banner. The Argentine market is not yet big enough to justify Web businesses focusing on one promotion tactic, executives say.

PromoRed.com will launch with huge events at Argentina’s top beaches (it’s summer in Latin America), along with traffic-generating print ads and magazine inserts that incent consumers to visit and register for the chance to win prizes.

WILL THEY COME?

Argentina is an interesting market. The country has the highest telephone penetration rate in Latin America, and also one of the highest cable TV penetration rates in the world (55 percent of households), according to a Merrill Lynch study conducted earlier this year. However, personal computer penetration is only 3.2 percent of the total population, and only 1.4 percent of Argentines are online. Due to low literacy levels, it is unlikely that Internet usage will ever be embraced by the masses.

Argentina’s recent economic troubles have also had a tremendous impact on the psyches of consumers and marketers. Companies have spent most of their money to alleviate problems in the real economy, and have had little left over to invest in a virtual one. Businesspeople have yet to realize that the Internet breaks the traditional codes of communication, and don’t yet understand that it presents excellent opportunities to interact with customers, according to Loizeau.

Also significant is the common notion that no one – not even banks – can be trusted with your money. (Argentines have distrusted banks for decades.) For this reason, e-commerce is probably a long way from being accepted.

Argentine marketers and investors are turning their attention to the Internet despite the potential pitfalls, and taking an interest in what has proven to be a virtual gold mine in the U.S., Asia, and Europe. The Argentine government’s recent deregulation of the telephone industry, coupled with the fact that local ISPs offer cheap subscription rates, should encourage consumers and companies to begin utilizing the medium. About half of existing Internet connections were made in the last 12 months, and the Merrill Lynch study predicts a 40-percent increase in Internet usage over the next three years.

And if those new users like promotions, No Limits has a site for them.