From Australia to India and beyond, more and more regions across the globe are emerging as budding performance marketing hubs. We spoke to an Argentina-based COO to get the lowdown on the Latin American market.
Santiago Darmandrail is the co-founder and chief operating officer (COO) of Buenos Aires-based business Vorcu.
The company is an affiliate network, 'much like zanox or Commission Junction', says Darmandrail.
“The main difference is that we are focused 100% in the Latin American market, and work almost exclusively towards driving traffic to e-commerce companies and CPA programmes,” Darmandrail said.
The company has been active, gathering advertiser interest and spreading its word since December 2012, but publicly launched its platform in March.
Although based out of Buenos Aires, Vorcu has corporations established in 11 countries in the region. It runs programmes for clients in Argentina, Brazil, Chile, Colombia, Honduras, Dominican Republic, Paraguay, Peru, Uruguay and Hispanic US.
We delved into the current Latin American landscape with Darmandrail, touched on the 'non-existent' online coupon sites and over-charging advertisers, and got his views on the 'healthy' European market.
Q: How would you describe the Latin American performance marketing/affiliate landscape?
A: Affiliate marketing is extremely new in Latin America, and for some reason it isn't closely related to e-commerce or CPA programmes yet. Most affiliate networks run branding campaigns for offline brands in a CPC or CPM basis. If you combine that with the relatively small amount of online transactions users are doing every year, it becomes pretty hard to get an affiliate to run a CPA programme. Coupon sites or special deal sites, that are one of the biggest traffic drivers in the US or Europe are practically non-existent. But this means that the opportunity is even bigger here than almost anywhere else. E-commerce is growing at a steady rate; we are confident that it will explode in the near future and with it, performance marketing. At Vorcu, we are working hard to bring back home some of the wisdom we've gathered from talking to first-tier affiliates from around the world.
Q: What are the affiliate marketing trends in Latin America?
A: For the last couple of years we've seen most of the commissions come from daily coupon sites like Groupon or LetsBonus that pay around $1 per lead. These and other lead-based programmes have been at the core of affiliate revenue. We are seeing a shift here, with companies realising that leads are not the best way to compensate their affiliates. From our perspective, 2013 will be the year in which performance really takes a stand and CPA programmes become more and more relevant. We believe that companies like 1&1, that know performance marketing and are seeing potential in the region, will dominate the affiliate space. Some of the biggest trends will be related to revenue share programmes in the travel, electronics, broadband and internet services, retail and clothing categories.
Q: What are the pros and cons in the Latin American affiliate marketing industry?
A: The cons are the ones you would expect: both affiliates and advertisers need to be convinced that the system works, users are not buying as much online as they should be and most players are happy over-charging advertisers and under-paying affiliates. But, these are also the pros. The company that finds a way to solve all these problems is in for a huge win, and we are confident that Vorcu will be that company.
Q: What are your views on the affiliate marketing/performance marketing landscape in Europe?
A: Unlike the Latin American market, Europe appears to have a very well established affiliate landscape. You have hundreds if not thousands of affiliates, that are not individuals but have maybe 200 employees. Companies like zanox, Affiliate Window or Webgains help create a healthy environment. We hope to do the same over here.
Q: What are Vorcu's goals and do you have plans for expansion?
A: From the moment when we started Vorcu, we knew that we wanted to distance ourselves from the way others are doing affiliate marketing in Latin America. Our main goal is to bring it back to what it's supposed to be - the standard in performance marketing. We want to put transparency back in the front seat, treat both advertisers and affiliates as our partners, help incentivise e-commerce in Latin America and build a company we can be proud of. As to plans for expansion, we aim at growing as organically as possible. Right now our energy is focused 100% on closing big deals with great companies like 1&1, assisting our current affiliates in generating sales and evangelise potential affiliates into the idea that performance marketing can be a great way to generate revenue.