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Researching country expansion

2009 July 22
by Greg Satell

Expanding a media business to a new country can be difficult and confusing.  When you cross borders, rules have a way of changing – often in ways that can completely change how you do business, relate to your audience and compete.  Luckily, there are some resources out there that can help you get started.

Economic forecasts: The IMF makes forecasts for every country and usually local governments and central banks have informational sites. Most forecasters follow each other so there really isn’t much difference in the different forecasts. Also, the IMF makes annual reports (officially they are “consultations”) for every country in the world (except, I think for North Korea and a few others). These should be taken with some degree of skepticism because, ultimately, it’s just what some Phd candidate thinks that the Finance Minister should do with his country. Nevertheless, a lot of work goes into them and it should be one of the first sources that you go to for any country expansion.

Media Expenditures: The standard source for these are the ZenithOptimedia Global Expenditure Forecasts, which cover just about every country in the world. They are expensive books (a few hundred dollars), but  it’s a relatively small investment when put in perspective investment. One advantage of the ZenithOptimedia forecasts is that they are widely used by investment banks, so if you use these numbers, they will generally be the same ones that investors have as well.

However, there are some problems with the research that you should be aware of:

– Discount rates: For almost all of the countries, the expenditure data is based on price lists and discounts can vary significantly from country to country and media to media.

– Local methodologies: The research is taken from local sources, and the methodologies can vary widely. For instance, some countries don’t include small regional players, and some do. Some include yellow pages, some don’t.

– Local judgment: For forecasts, the judgment is made by someone in the local office and will reflect his outlook.

Unfortunately, most investment bankers don’t seem to be aware of these issues and most don’t really seem to care much either. In all fairness to ZenithOptimedia, they are doing their best to footnote properly about the local issues and they do an enormous service by publishing the reports.

Another good source is the “Global Cost Comparisons” published by the WARC and Mediaedge-CIA. Not as useful for investors as it is for marketers, but it’s still a very good source.

Audience Estimates: This usually requires a bit more resourcefulness and you really need access to local sources. One way to get the info is to simply hire a local media agency. However, if someone wants to start a business in the country they should be resourceful enough to be able to get in touch with people who will give them the data.  Going through regional contacts can also be effective.

I hope this has been helpful and good luck!


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