What can you do with $5,000? If you are Gastón Taratuta, you build what would become Latin America’s largest independent digital ad sales and media buying firm, profitable from year one with no outside funding.
That would be Miami-based IMS, which he founded in 2005, then a team of three people. Over the years, the digital marketing and communications company found its niche partnering with businesses seeking to expand into and within Latin America and its fast-growing, highly coveted market of mobile-loving millennials and connecting them with Latin American advertisers. “We see mobile and video as the two main drivers of growth,” Taratuta said.
IMS works with Waze, Twitter, LinkedIn, Spotify, Crackle, Apple iAds and Foursquare, among many others. “We can help these companies to make the bridge between Silicon Valley and Latin America — and that is what we have been doing for the last three to four years,” said Taratuta, who was born in Argentina. In August, IMS announced a Latin America marketing partnership with Electronic Arts, which owns some of the biggest names in video games.
“We developed this business with energy alone. We had no external budget,” Taratuta said. “We built the company with $5,000 from the owner and today it is an example of how to build something that is good and long-lasting.”
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Today, IMS has about 400 employees (about 40 of them in Miami) and offices in 11 Latin American countries in addition to its Miami headquarters. In the past 10 years, it has gone from $2 million in billings in its first year to about $120 million last year, he said.
In July, Sony Pictures Television bought a majority stake in IMS. The 51 percent stake was reportedly a “nine-figure” transaction (at least $100 million) at a strong valuation, Taratuta said, and he and the IMS management team stayed with the business: “IMS has done the largest transaction ever in digital advertising services in Latin America. We did this without a product or any technology of our own and were able to achieve this relying only on hard work and talent.”
His advice to other entrepreneurs: “Focus on what you have, not on what you do not.”
Taratuta manages the company’s strategic direction and oversees all IMS sales teams. Taratuta plans a global expansion for IMS and is looking at potential acquisitions in the U.S., Europe and India, but there is also much more growth in Latin America to tap in the meantime, he said. In a region where mobile connections outnumber the population, the digital ad sales outlook for Latin America is poised for double-digit growth over the next five years. “We must always be one step ahead,” he said.
Taratuta plans a global expansion for IMS and is looking at potential acquisitions in the U.S., Europe and India.
The Miami Herald spoke with Taratuta about the company, the recent news and what’s next for IMS.
Q. What is IMS’ primary mission?
A. Our main goal is to have a business that is sustainable over time, a business that maximizes its value to the stakeholders, and a business that is a landmark to the online advertising community. It is important for us to stay ahead of the game and be pioneers in what lies ahead within the digital advertising business and the digital spectrum.
Q. You have many partnerships with top brands. Why are they seeing Latin America as an ideal place to expand?
A. We look for partners that are, in some way, platforms promoting growth within the Latin American community.
Silicon Valley thrives off access to inexpensive capital by being willing to invest in risky business ventures. These platforms and products eventually end up paying for themselves and inevitably become global products.
What companies see when looking to enter the Latin American market is that there are advertising opportunities presented by almost 600 million consumers and 156 million smartphones. These companies are looking to expand internationally, and in order to fully enter the global market, they must have a strong presence in Latin America.
The reality is that LatAm only represents 5 percent of the global opportunity, divided among 10-12 different countries. In this situation, most companies will say: “In the U.S.A., I’m going to do it myself. In the U.K., as well. In Japan, I’m going to do it myself. But you know what? In Latin America, with only 5 percent among 10 different countries, I would rather use a third party.’ ”
And this is how we end up serving our clients. We give them access to the market, take over any concerns about finding the best talent, and resolve any administrative and financial matters. We educate our clients about the market and they don’t have to worry about sales, marketing, or anything else. Furthermore, with the depreciation of currencies in Latin America — the Brazilian real, the Mexican peso, the Argentine peso, the Colombian peso — LatAm will no longer represent 5 percent of global revenue. It will be 3.5 percent... Dealing with 10 countries with only 3.5 percent opportunity for revenue makes third-party involvement even more convenient — IMS makes this a turn-key process.
Q . Why did you decide to sell a majority stake to Sony Pictures Television and what opportunities does this bring?
A. Why decide on selling a stake in the company now? Because an opportunity came up that not only made sense financially, but also made total sense for the business. For example, if a company like Caterpillar had sought to buy IMS, it would have not made any sense to us strategically. The partnership with Sony benefits us by creating internal opportunities within Sony, opening doors within Sony’s network, providing financial benefits for our stakeholders, and finally, because with Sony we can expand this business 99 percent faster than we would have done on our own.
Q. With the year you’ve had, what’s ahead for IMS?
A. This is a very good question. In the short term, we want to maximize operational opportunities with Sony in conjunction to other external opportunities. From a strategic point of view, the company can grow, but how?
A company can grow either organically or inorganically. One way organic growth occurs is through products and services. We have been using this tactic to grow organically in many geographies, and across different lines of business.
Organically, I see opportunities with Sony that will open doors in other regions. Our long-term goal is for IMS to branch out of Latin America and become its own global company. But, if you are asking me now about the short term, I want to create a global organization hand-in-hand with Sony Pictures Television.
Q. What has been the high point of IMS’ 10 years so far?
A. There have been two important milestones for IMS during these past 10 years.
One was to create and develop the IMS Executive Program at Stanford. IMS invites top executives from Latin America to gather for a custom program developed by the Stanford Graduate School of Business. For IMS, the program aims to engage Latin American thought leaders and decision makers in lively debates and inspire innovation. Over the four-day course, attendees are guided by some of Stanford University’s best minds, who teach cutting-edge frameworks and ideas to current and future business leaders. The program has been very successful and just completed its fifth edition.
The second milestone began with the arrival of Ignacio Vidaguren, who came to us from Mercado Libre, the leading Latin American online marketplace dedicated to e-commerce and online auctions. Along with Ignacio and Maren Lau, IMS's chief marketing officer, we have been able to hire additional distinguished, top-notch staff. Because IMS is a company formed by people, I would consider this type of recruitment to be a huge milestone.
Q. What in your background most prepared you for founding and growing IMS?
A. Founding IMS was a total necessity because otherwise I would have been out of work. It was not something I wanted to do initially. I was forced into entrepreneurship. It might have also been this need and this fear that, at some point, the wind will stop blowing and therefore, you never stop rowing. Always conquer more in order to cover more — and so, the company has a strong DNA based on service and sales, and runs like a machine.
Q. What have been the main drivers of IMS’ success?
A. There are three drivers for IMS: people, a vision to offer the market what no one else is offering, and the third — market adaptability: to be ahead of the curve!
Q. Can you talk about one or two trends you are seeing in Latin American digital media?
A. The number of people using desktop computers in Latin America was on the rise until the use of mobile and smartphones began to grow. This was the same as the case in the U.S.: Usage of desktop computers and laptops grew steadily until the use of smartphones started to rise. Use of desktop computers and laptops is still growing in LatAm but at a much slower rate than the growth of smartphones. There are a lot of people who do not own a laptop but all of the sudden own a smartphone or a tablet.
Another trend is the improving infrastructure with Internet connectivity in Latin America, both 3G and 4G. Growth is happening, and we are likely to have 4G in three years all across the region — fast and not too expensive.
Q. How do you see Miami’s role or goal as a gateway to the Americas evolving?
A. The ecosystem and local market in Miami has been investing in technology in many ways. They are building a new Silicon Valley in Miami for Latin America, but it will be a long road until this benefits the market. From an advertising point of view, Miami will need to invest more in order to turn it into a prosperous market. My concern is that if nothing is done now, the market will dry out and we will miss our opportunity.
FOMLA [The Festival of Media LatAm] created the space that networks need and without more media events like this, we lose out on opportunities. Out of the entire media market globally, LatAm represents $40 billion and Miami is $400 million. It is not even a quarter of Latin America’s representation.
Q. What’s the best career, entrepreneurial or leadership advice you ever received?
A. You must work hard — 10,000 hours of hard work in order to build a company.
It is tough to achieve a work-life balance and to be an entrepreneur, if this is your dream. It is a challenge. The best advice I ever received was, and still is, the following: Listen to people and surround yourself with good people. Be willing to lose the game, take this as a journey, have an idea, and execute it. Do not be afraid to say “I was wrong” and start over from scratch.
‘It is tough to achieve a work-life balance and to be an entrepreneur, if this is your dream. It is a challenge. The best advice I ever received was, and still is, the following: Listen to people and surround yourself with good people.’
Gastón Taratuta, CEO of IMS
Q. With offices in 11 Latin America countries plus Miami, and your new joint venture with Sony Pictures Television that requires additional travel to Europe and Asia, you must feel like you live on a plane sometimes. What’s your advice for fellow business travelers?
A. Have nice insurance. Go to the gym at any hotel in the world. Eat well, eat healthy. Talk to your family every day.
Nancy Dahlberg; 305-376-3595; firstname.lastname@example.org
Title: CEO, founder and partner of Miami-based IMS, a digital ad sales and media buying firm serving Latin America. He manages the company’s strategic direction and oversees all IMS sales teams. IMS’ services include the commercial representation for Twitter, LinkedIn, Waze, Spotify, beIN, Sony Crackle, Apple iAd, and Foursquare.
Experience: Taratuta began his career as sales manager of Brazil’s Universo Online (UOL), advancing to president of its subsidiary UOL-E Corp.
Languages: Fluent in Spanish, English and Portuguese.
Education: Master’s degree in international marketing from Florida International University; participated in graduate programs at Stanford University.
Best advice received: “Listen to people and surround yourself with good people. Do not be afraid to say: "I was wrong” and start over from scratch”.