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Merger creates Latam mobile ad network, $10M revenue goal for 2013

The merger of the  Cisneros’ digital media unit, RedMas, with the mobile advertising network Adsmovil has created a large mobile advertising network serving the Americas. The newly-formed company will operate under the Adsmovil brand with co-founder Alberto Pardo serving as CEO. Jorge Rincon, RedMas’ CEO, will become the new company’s COO.

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The goal is to achieve revenue of a little more than U.S.$10 million in Latin America and the U.S. Hispanic market. Brazil is expected to account for U.S.$2.5 million of the total goal. “Brazil, Mexico and the U.S. represent 90% of that number,” Pardo said.

Last year, the companies’ revenue for the Latin America and the U.S. Hispanic markets totaled U.S.$5 million together. Now, Adsmovil is investing about U.S.$2.5 million in the Latin American region. It has created an office in São Paulo to boost the newly-formed firm across in Brazil. Previously, Brazil was the only market where Adsmovil did not have a representative. The company is also heading to Chile in the second quarter.

Pardo explained to RCR Wireless News that Adsmovil will focus on sales and developing technology with Brazil, Mexico and the U.S. as its key markets. “Our customers in Latin America can also have access to our U.S. Hispanic network, which is the largest. For U.S. customers, they can buy campaigns in Latin America,” he said.

The combined companies will be able to offer a broader mobile network and open up the mobile advertising experience across 15 countries in places that receive high traffic and have strong relevance for Spanish- and Portuguese-speaking consumers, resulting in more exposure and higher sales conversions for company partners.

However, the challenges are huge since the Latin America mobile advertising market is in the early stages. The good news is that there is room to grow, said Pardo. “Some reports say that mobile is only 2% of the total digital advertising market, and for Latam, digital means 5%-6% of the total media investment, so you do the math,” he said. “In sum, there’s plenty of room to grow. Rich media and video advertising will grow dramatically soon.”

This is the Cisneros Group’s second major move into the digital space in the past few months. It also acquired the Argentinian online advertising firm, Kontextua. When commenting on the move into Latin America, Pardo said that Adsmovil started talking to Cisneros six months before the Kontextua deal. “At that time, we also received a couple of proposals to invest in Adsmovil. We took some time evaluating the best one, and we decided to move forward with Cisneros,” he said.

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