teams up with
, at least one element of the Spanish-language portal's operations stands to benefit big: its advertising.
Terra, the Madrid-based Internet company that's
reportedly in talks to merge with Lycos, already has spent several months trying to publicize the Spanish-language portal it operates for the U.S. market. But its advertising placement choices -- including decidedly English-language media such as
and the Web site of Internet trade magazine
The Industry Standard
-- have struck some onlookers as odd.
That hasn't dissuaded investors from buying shares of Terra, a unit of Spain's
: Terra stock is up more than 500% since its November IPO and boasts a market capitalization north of $16 billion. But Terra's advertising efforts suggest that the company would benefit from sharing the marketing resources at Lycos, whose shares are valued at less than half of Terra's.
The Waltham, Mass.-based Internet company, which spends about $25 million on ad placement annually, has developed a reasonably memorable ad campaign, as far as Internet advertising goes, which likens the site's search and capabilities to those of a black Labrador retriever that eagerly responds to the command, "Go get it."
As Terra aims to build a Hispanic audience in the U.S. and other countries, it has advertised in several venues with concentrations of Spanish-speaking audiences. These include Spanish-language pages of Discovery.com, the
Los Angeles Times
Web site, and on posters inside the New York City subway system.
Yet the company is also placing banner ads on several sites that don't appear to offer a particularly concentrated population of Spanish speakers. These include not only
The Industry Standard's
site, but also
, internet.com's software download site
, a site at which Web surfers earn chances to win cash jackpots with each link they click.
Erich Joachimsthaler, CEO of
and co-author of a recent book on branding, says the firm's marketing appears to be scattershot. If the firm is trying to reach techno-savvy Hispanics, it makes sense to put its ad campaign on the
site or in
, he says. But if that's what the company wants, it shouldn't be spending money on mass-market advertising in the subway.
Judged by their content, the Terra Networks ads seem to be clearly targeted at Spanish-speaking Internet users. Built around highly stylized photographs, each of the ads displays four different Spanish words meaning the same thing -- for example, "drinking straw" -- in an example of how Terra understands the differences between the various Hispanic cultures.
A Close View
Yet these ads keep popping up on the Web for audiences that aren't Hispanic in origin. In January and February, for example, the company advertised on Jumbo.com and iWon, according to Internet audience measurement firm
. A different Web advertising measurement service,
Leading Web Advertisers
, found that about half of the company's ads over the past four months ended up on internet.com and Jumbo.com.
In fact, Terra Networks' advertising in March reached an audience that was only 6% of Hispanic origin, according to data collected by Nielsen//NetRatings. The Hispanic audience on the Web at large is about 5%, according to the ratings firm.
Earlier this month, Terra Networks marketing director Stephan Maisons defended the company's ad placement, saying that the
appearances are part of Terra's advertising to the trade, or potential advertising customers. Only 15% of the company's marketing budget is targeted at the trade, he says. He adds that one can find Spanish speakers everywhere on the Web, and he says that the company is satisfied with the results of its advertising.
Patricio Carmody, vice president of marketing at another Spanish-language Internet company,
, won't comment on Terra Networks' advertising. But he makes it very clear that he wouldn't advertise his service on technology sites. "No, no, no," he says. "We are very focused on making sure our investment goes straight to Spanish- and Portuguese-speaking people," he says.
StarMedia has advertised in business and trade publications such as
The Industry Standard
, Carmody acknowledges. But he points out that these trade ads, which the company started running in March, were clearly targeted at the advertising community; they show off the large size of StarMedia's U.S. audience relative to those of its competitors. This ad campaign, which StarMedia didn't run online, has a "very different message" than its consumer-targeted advertising.
Maisons defends the strategy of running the
ad that is targeted at the trade, but which is essentially its Spanish consumer advertising campaign with some copy in English in which the company states, "We not only speak the same language, we share your passions and culture."
Maisons says Terra is not trying to target investors with its ads. "We have to be very, very careful," he says. "We need to talk to the investor maybe later on
after we have very good results."
Maisons agrees that its ads for the trade don't sell Terra Networks directly to advertisers, but he says he doesn't believe that the company should take the direct approach so quickly. Advertisers "need to understand what we are before
we start making them an offer or taking them to our place," he says. He likens the trade strategy to courting a woman: "You need to tell her the great thing about
yourself before you tell her, 'You want to get married to me.'"
At the same time, Maisons muses that the company was "probably too European in our ads."
Well, perhaps Lycos can go get that fixed.