Cuba could reintroduce commercial advertising in its mass media

Emilio Morales

Half a century after banning commercial advertising in its mass media, this important marketing tool could make a comeback in the island's audiovisual communications scene.

The inclusion in the new portfolio of projects for which Cuba is seeking foreign investment recently published by the Ministry of Foreign Trade and Foreign Investment of one to establish a paid cable television channel could be the springboard to reintroduce commercial advertising in Cuban television. To be sure, such a move would be a positive one in Cuba's reform process.

The national television system requires financial resources to create new programming that would be well received by national audiences and would compete with the informal, innovative and popular "package" of content that is transmitted person-to-person weekly through USB memory drives and reaches millions of Cubans.  The national system also needs to modernize its technological base and improve working conditions for the professionals who work in this field.

The project to establish a paid cable television channel can be seen as a step forward in Cuba's reinsertion into international markets, meeting the challenges associated with the process of transformation of the economy. It recognizes that attracting foreign investment and stimulating the growth of the tourism sector and national industries with their own brands require the use of advertising.

Should the proposal to create a paid television channel materialize, it would be very beneficial for the private sector and state enterprises in providing them with a medium to promote their products and services in a competitive environment driven by foreign brands already marketed in the island and new ones that are expected to enter the Cuban market in the near future.

While the investment project included in the investment portfolio does not explicitly mention advertising, it is obvious that one of the main ways for financing a paid cable television channel would be commercial advertising.

Through advertising, Cuban brands owned by the government such as Havana Club, Cohiba, Ciego Montero, Partagás, Montecristo, Cristal, Bucanero, among others, could reach the eyes and ears of the avalanche of tourists expected to come to the island in the next few years whether traveling by air, cruise ships or ferries. There would also be business opportunities for the nascent private sector -- for example, restaurants (paladares) such as “Doña Eutimia”, “Rio Mar”, and “El Litoral”,  among others -- to advertise their offerings through national television channels.

The potential financial gains from commercial advertising are very substantial.  As a market dry of advertising  for more than half a century, there is pent up demand to advertise by a wide range of national and foreign companies and brands seeking to make themselves known and position themselves in the Cuban market and in the mind of Cuban consumers.

The reintroduction of advertising would open up opportunities for many Cuban professionals to be able to practice their skills and creativity, banned or severely limited for many decades. It is possible that small and medium size marketing and advertising firms would emerge, promoting efficiency and filling the existing void and creating a competive environment.

In the last five years, as part of the reforms driven by President Raúl Castro, the Cuban government has taken numerous steps to prepare the ground for the reintroduction of advertising. Today, signs and billboards advertise the services of fancy paladares, hostels, beauty shops, small shops to service cell telephones, and other small businesses authorized under the self-employment legislation.  Self-employed businesspersons have been allowed to advertise in the telephone directories and more recently, the National Information Agency, a government institution, has created a website called  "www.ofertas.cu” with classified advertising.[1]

In 2005, professor Ángel Hernández (former Marketing Director of the Corporación CIMEX) and the author carried out a study to document the familiarity of Cuban consumers with brands. We were able to document a surprisingly high level of brand familiarity, particularly since advertising had been banned for almost half a century. The study showed that despite the very low purchasing power of the Cuban population at the time of the study, 41% of those interviewed indicated that the brand of the product affected their shopping behavior.[2]

At that time, advertising was only permitted through the radio station Taino, a station focused on international tourists. Advertising was also allowed at the point of sale. The Brazilian-Cuban joint venture Brascuba excelled at point-of-sale advertising.  Undoubtedly, veteran marketer Mirtha  Muñiz did a masterful job in promoting the products of the joint venture using the small and very limited spaces available for advertising.

What would be the behavior of Cuban consumers in a business environment where advertising would be an integral part of marketing branded products?

I can already sense that should this happen, it would be innovative and transforming. Foreign companies investing in the island would not feel as strangers to consumers, operating in an alien market. Advertising would support their sales efforts and could open the door to franchising. Currently, franchising is not a business model used in the island, with the exception of “La Casa del Habano”, very successful in international markets, operated by the joint venture Habanos S.A.

Are we at the threshold of the Cuba 3.0 that Juan Antonio Blanco has been talking about?

Cuba needs medium-size enterprises, and franchises are business models that can be very successful and can propel emerging economies. The development of franchises in Cuba is necessary and a challenge in the reform process. Let's hope that the paid cable television channel represents a window of change for the benefit of the Cuban economy.  The country needs it, and so do the Cuban people.



[1] Granma. “Disponible en Internet web cubana dedicada a clasificados y publicidad”. Agosto, 2015. http://www.granma.cu/cuba/2015-08-11/disponible-en-internet-web-cubana-dedicada-a-clasificados-y-publicidad

[2] Morales Dopico, Emilio, and Hernández Gómez, Ángel.” Estudio sobre notoriedad y conocimiento de marcas en la población cubana”. Cuba: ¿tránsito silencioso al capitalismo? Alexandria Library Incorporated, 2009, Pag 70.