Latin America Brands Prep for Success at IAB Conecta 2018
After a long period of instability, consumers and brands in Latin American are regaining confidence in the economy. As a result, the marketing and advertising landscape in the region is becoming more fast paced and complex. To grow in this environment, companies must meet consumer demand for convenience and personalization and leverage digital strategies and innovation.
These were just a few of the takeaways from this year’s IAB Conecta, the largest digital advertising and interactive marketing conference in Mexico. The conference gathered experts from across the digital marketing industry to dive into the challenges and opportunities facing companies in the region.
Continued Challenges After a Recession
Pessimism over job prospects, spending, and the future of the economy persist across Latin America. According to the second-quarter 2018 Conference Board® Global Consumer Confidence Survey, which is produced in collaboration with Nielsen, consumer confidence declined last quarter to 86 points. In addition, 87% of consumers in Brazil, Latin America’s largest economy, feel the country is still in recession.
Consumers continue to keep an eye on savings, seeking greater value for their dollars and making increased purchases at discount stores and less-expensive formats. Fast-moving consumer goods (FMCG) sales are flat (2017 volume sales average growth +0.2%), and brands have had to adapt their offerings to accommodate buyers’ tight budgets.
Despite rising consumer product prices, economies are beginning to recover, and that, coupled with newly elected presidents, have given some consumers reason for cautious optimism. Digital analytics firm eMarketer forecasts that retail sales will grow 5.1% to $1.988 trillion this year, making the region the world’s fourth-largest retail market.
Marketing Effectiveness In Latin America
Digital switchovers, a rising middle class and growing smartphone adoption are all expected to affect marketing activity and ad spending. According to Nielsen’s Q2 2018 Quarter By Numbers and What’s Next in Innovation - Latin America reports, brands have several reasons to be optimistic.
1. Latin America’s Consumers Are Going Digital
Continued investment in digital infrastructure, improved mobile internet access, less-expensive data plans and rapid smartphone adoption have been key drivers for continued growth.
- Latin America has almost 250 million smartphone users, with Brazil having the largest share (84.5 million).
- Latin America is home to 284.1 million digital video viewers, the second largest base after Asia-Pacific.
- This year, for the first time, mobile will make up more than one-quarter (27.5%) of all retail ecommerce sales in Latin America, totaling $14.62 billion.
2. Digital Ad Spend is Significant in Latin America
- Digital ad spend in Latin America will increase by 20% to $10 billion this year, over 26% of total media spend.
- Latin America is the fourth-largest ad market in the world and will account for 6.1% of worldwide media ad spending this year.
- Paid media ad spending in Latin America will increase 8.7% this year as economies continue to stabilize.
- Traditional media (TV especially) will receive the largest share of overall ad spending in Latin America (73.7%) this year.
- Mobile’s share of total media spend in Latin America will reach 13.9% this year and climb to 25.8% by 2022.
3. Innovation is Imperative for Brands
Consumers need new incentives to purchase. They’re more demanding and cautious than ever. Brand innovation is a key factor for making businesses more resilient in this slower-growth environment. On the bright side, Latin Americans are among the most willing globally to switch to a new brand. They also are willing to pay premium prices for innovative products.
- 52% are willing to pay premium prices for innovative products
- 54% are generally willing to switch to a new brand
- 60% wish there were more new products on the market
Latin America’s Marketing Measurement Challenges
The rapid pace of change and growing complexity in Latin America have made marketing effectiveness increasingly difficult. Brands and agencies are reinventing themselves and trying to find new ways of measuring their results. The challenge is how to understand the effectiveness of each media channel and overall campaign performance to continuously improve ROI.
Marketing in the Digital Era
The digital era has changed many things for marketers. Perhaps the most significant is how it has revolutionized the way we interact with, connect to, learn from, cater to and measure the audiences for our marketing efforts.
During my IAB Conecta session, “ROI and Content in a Digital World,” I focused on the opportunities that new ways to reach consumers offer and the new methods needed to measure performance in the digital era.
I explained the current challenges shared by many brands: the use of accurate metrics; understanding how offline and online channels interact; tracking and de-duplicating individuals across channels and devices; and understanding consumer attributes and preferences.
Consumers today leave digital footprints behind that enable marketers to understand their behaviors and preferences. With that information, we are able to more effectively reach consumers with messaging that resonates with them as individuals. Using multi-touch attribution, we can also determine how effective those targeted marketing efforts were across our audiences.
The marketing landscape in Latin America—and around the world—is more complex than ever before: more channels, more choices, and consumers who get savvier every day. This year’s IAB Conecta helped prepare brands to maximize their marketing effectiveness in a challenging era to drive the best outcomes for their businesses.
For additional insight about how you can be a better marketer in the digital era, download our Crossing the New Digital Divide: Your Guide to Marketing Effectiveness ebook.