Marketing in Latin America: Mobile, Video, Programmatic Create Opportunities

Maren Lau is the CMO at IMS Internet Media Services, a digital marketing and communications company that helps brands enter and grow in the Latin America digital market. She spoke with eMarketer’s Daiane Bobka about the biggest digital trends in the region.

eMarketer: How hot is geolocation marketing in Latin America?

Maren Lau: It is hot. If you go to Brazil, you see that the taxi drivers and everyone else are using geolocation platforms. In Mexico as well, it is very popular. Naturally, in a market where you have a very high usage, you’re going to have a great case for advertisers that want to engage users on that specific platform. And I think that this strong usage is aided by continuing improvements to mobile infrastructure.

Users in Latin America are very highly engaged with mobile, which obviously is essential for geolocation. When it comes to smartphones, we have a smaller penetration than in the US, but it is rapidly growing. With the World Cup, for example, we saw Brazil beginning to invest more in Wi-Fi in the stadiums, in 4G infrastructure, in these kinds of capabilities that really provide a context for mobile can thrive. So we’re very excited to see the growth of mobile and geolocation as a natural evolution of that.

eMarketer: Can you talk more about the high engagement with mobile in Latin America?

Lau: Latin America is a mobile-first region. As digital consumers grow, they’re starting to use mobile and may not even have a computer. So their upgrade will be from a feature phone to a smartphone, and they don’t have to invest in a desktop or a laptop. When it comes to consumption and digital content in general, it is a region that is going to have tremendous opportunity for mobile-first platforms or content.

“Latin America is a mobile-first region. As digital consumers grow, they’re starting to use mobile and may not even have a computer.”

This new digital consumer is actually very willing to engage with brands and receive information from them as long as it’s relevant—it’s such an important characteristic of advertising, especially in digital.

eMarketer: How are Brazil’s current economic challenges affecting the digital ad market in the country?

Lau: Generally, when a country’s GDP starts to contract, advertising budgets follow the same pattern. That is certainly happening in Brazil right now. What is positive is that digital continues to grow as a share of advertising. So advertising expenditure overall may not be growing, but digital can continue to get share of advertising.

In Brazil, there’s a lot of interest in programmatic. It has become very interesting to a lot of agencies and larger brands. Definitely mobile and programmatic are very strong in Brazil right now.

eMarketer: Why are advertisers in Brazil interested in programmatic?

Lau: Programmatic is certainly a trend or a development in digital advertising overall. I see it gaining traction in Brazil first, then in other areas of Latin America. The reasons behind it are very similar to why programmatic is growing in the US—wanting to optimize your ROI and reach audiences.

One of the challenges to programmatic in the region is that there isn’t a lot of digital inventory available, and what is available is not yet piped into major programmatic platforms. So there’s still a lot of work that needs to be done. The US market is a few years ahead of Latin America, but certainly Brazil is where programmatic budgets are beginning to grow relative to other countries in the region.

eMarketer: What would be your advice for a company that wants to start in the programmatic field as publisher or as an advertiser?

Lau: Programmatic is an option for publishers that either want to monetize the medium to long tail or want to have additional sales channels. So for the publisher, it is about economics. Is it better for them to sell more at a lower price or do they want to continue on the premium route? Or can they combine the two somehow and have a dedicated sales team to sell premium inventory and then have programmatic that maybe takes a different kind of inventory?

“As advertisers become more comfortable with buying audiences, programmatic becomes an increasingly interesting solution.”

On the other hand, as advertisers become more comfortable with buying audiences, programmatic becomes an increasingly interesting solution. Right now in Latin America, a lot of advertisers are still focused on buying a demographic via a certain media. So there is an evolution toward audience buying, which is certainly where—aside from ROIs and optimization—programmatic offers a huge advantage and provides tremendous value.

eMarketer: In Latin America, TV still makes up a dominant share of ad spending. Do you think in the future advertisers will start to direct some of this budget to digital video?

Lau: Absolutely. The success of Netflix in the region demonstrates that the interest in streaming content is very strong and that people are willing to consume free or paid content.

Just this year we began launching Crackle ad sales in Latin America, which is a free Sony content platform for streaming video, and we’re seeing a definite interest in video advertising.

eMarketer: Is it a good time to invest in Latin America?

Lau: Latin America is a very interesting digital market to be in because of its growing mobile and internet penetration and also social engagement. It’s a very fertile economy for digital platforms.

At the same time it’s a very difficult market to enter because of its high fragmentation. Setting up a company in Brazil or in Mexico or in Argentina can take a significant amount of time. Beyond just cultural nuances in idioms, there are tax implications, billing and collection specificities. You need to have operations in every single country.

While certainly Mexico and Brazil are on everyone’s radar, Latin America as a whole is interesting. LatAm is a sum of many parts, and so to really gain strong scalability in the region, it is important to have a presence in multiple markets. I think it’s a great time to invest. If you look at the demographics, it all points to digital continuing to be a great channel.

If we view it from a nonadvertising perspective, investors had taken a step back from Brazil because the economy was so hot in the past couple of years. Over the last six to eight months, the currency has been devaluing and a lot of investors are coming back and saying, “Oh, we want to take another look at Brazil to invest in and to invest in digital properties and digital platforms.” LatAm continues to be a terrific opportunity.

Courtesy of eMarketer