The challenge that every marketer faces is how to develop a media budget that delivers the best results. Making changes to your approach is hard, not only because of the risk but also because of the need to sell other people in the company on those changes. But as the media landscape changes, it’s actually a bigger risk to make no changes, since you can easily fall out of step with your customers. In reviewing the data, here are some areas that both brands and media agencies need to look more closely at in executing their 2015 campaigns.
#1: Mobile Programmatic
Mexico clearly leads Latin America when it comes to mobile ad investment and is set to reach US$287 million by next year, while Brazil mobile ad investment will reach US$245 million and Argentine mobile ad spend will be a surprisingly small US$14.5 million.
But this modest level of investment doesn’t seem to jibe with the mobile boom happening in Latam. For instance:
- Tablet sales in Argentina totaled 900,000 in 2013 and will reach 1.1 million in 2014, a new record
- 78% of the mobile phones sold in Argentina during 2014 have been smartphones
- 13.1 million Argentines are mobile Internet users
- Argentine mobile Internet users spend an average of 3 hours and 25 minutes a day using mobile Internet
- 15% of online payments in Argentina are made with mobile phones
- In just Q2 2014 alone, Mexicans bought 6.7 million smartphones and smartphone penetration is projected to reach 50% in Mexico in 2015
- Overall smartphone sales in Mexico in 2014 are projected to be 37 million and tablet sales are expected to reach 6.2 million—already Mexicans bought 1.8 million tablets in Q2 2014
- 40% of Mexican mobile users make mobile purchases
- In Q2 2014, Brazilians bought 100 smartphones a minute
- It’s projected that Brazilians will buy 10 million tablets in 2014, with 4.2 million already sold in the first half of 2014
- 67% of Brazilians say they make mobile purchases
- 54% of Latin American smartphone users have bought a product or service with their phones
And if those numbers aren’t enough to get the point across, see how smartphone penetration, tablet ownership and mobile Internet user are growing in other Latam markets, including Chile, Peru, Colombia, Ecuador and Venezuela.
Now to programmatic. We know that programmatic ad spend is set to spike dramatically in Latin America, so definitely the industry knows this works. The advantages of the tight targeting of programmatic are becoming clearer, in addition to the fact that it may deliver a more efficient spend than manual online ad buying.
Given this, it seems logical that brands need to deepen their mobile spend. And if the concern is that mobile may be a risk, why not look at some trials with mobile programmatic? Sharper targeting could lead to even better results with mobile and allow brands to fully take advantage of an audience that’s using smartphones more and more in the purchase process.
The numbers on social make things pretty clear:
- Social media penetration among Internet users 15 years of age and older is at nearly 93% in Latin America, at 90% in Brazil y quite high even in smaller online markets, such as Peru (96%) and Venezuela (90.2%)
- Overall, eMarketer estimates that there are 227 million social network users in Latin America
- Facebook has more than 200 million users in Latin America and takes up more than 95% of the time that Latin Americans spend on social media
- Mexicans spend an average of 6 hours a day on social media
- Argentines spend an average of 4.3 hours a day on social media
- Young Brazilians have accounts on an average of 7 social networks
- 71% of Brazilians share content on social media, the highest percentage in the world among social media users
Ok, so we know we have a good audience. Then why is social network ad spending in all of Latin America only estimated to be US$481 million in 2014 and only to increase by 23% in 2015?
Per user, advertisers will spend US$2.52 on social network advertising in Latin America, compared to $46 per user spent in North America and $27 per user in Western Europe.
How does this make sense when comScore reports that the average social media user in Latam spends 8.67 hours a month on social media versus 8.07 hours spent by Europeans and 6 hours a month spent by North Americans?
>>>The Approach with Social
There are several ways brands should leverage this Latam love of social in 2015:
Facebook retargeting. On one hand, we have 200 million Facebook users. On the other, in 2014 we have e-commerce growing by 40% in Argentina, by 23% in Brazil, by 20% in Mexico and by 45% in Colombia. So obviously it makes sense to retarget people who visit e-commerce sites with ads on Facebook. You can find out more on how that works here or just contact us directly since we’re experts in this area and partners with Triggit, a leading company in Facebook Exchange retargeting around the world.
Native advertising and content marketing. Do any of you know how much Latin American marketers are spending on native advertising or content marketing? Many of us don’t know yet, and the reason is because no surveys that report tactical spend by Latam marketers has been released. But it doesn’t seem to be much, if at all.
And what a missed opportunity. Mobile Internet is expanding hugely in Latin America and part of that entails people checking social networks on their cell phones: 30% of Mexicans, 37% of Chileans, 32% of Argentines and 19% of Brazilians, according to one study. But other studies confirm this trend: see here, here and here.
This means that people are checking their Facebook feeds, scrolling down: this makes it the perfect place for you to include a sponsored post that’s part of your content marketing. A recent survey of American marketers showed that 23% are devoting more than half of their 2015 budget to content production. Why? Because posts on topics and videos, for example, are good ways to engage people and sell. A post can lead back to a mini-site where your content lives—along with banners to convert people. Or you can set up a content channel on a portal—something we helped a client do with iG a few years ago and which worked very well. And you can leverage content even further with mobile: 55% of Brazilians recently said that video was their preferred format for mobile ads.
Sponsored social. This trend has taken off in the U.S. and it makes sense: use social media users with strong followings to promote brands. A recent study showed that 52% of American marketers had used this tactic in 2014, nearly as many as those who used online display advertising (58%). This could be a trickier tactic to deploy but it definitely merits some trials considering the potential it has.
As an industry, we’re skipping around the surface of the potential of digital in Latam with light investments. It’s not about jumping on the bandwagon to be cool. It’s about adjusting our business practices to our audience habits. And that’s just good business.
Contact us to learn more about how we can spike your response in 2015 via mobile, programmatic, mobile programmatic, Facebook retargeting, social and a deeper dive into digital campaigns.