When we spoke to a couple of industry veterans about the state of performance marketing in Latin America two years ago, the verdict was the industry still had some catching up to do. Since then, the region has boomed as a smartphone hub, with eMarketer attributing mobile-driven commerce for between 4% and 5% of the region’s economy in 2015.
As such, Latin America has some distinct characteristics that influence how marketers are conducting business there, so as the region continues to pick up speed on the global stage, PerformanceIN caught up with Brett Olson, sales executive for Latin America at performance marketing specialist Tune.
In the interview below, Olson sheds light on the latest trends driving the Latin American market, some of its major challenges and biggest opportunities.
To begin with, could you tell us what the performance marketing landscape looks like in Latin America today?
Brett Olson: Latin America is still largely dominated by desktop-based performance marketing. This isn’t to say that mobile is not being focused on, but that it’s a more difficult environment to work in with brands and advertisers.
The knowledge of technology in the space is a little behind where it is in Europe and the United States. Networks are a bit ahead of the curve as it relates to the advertising landscape. Time is spent not only running campaigns for brands and advertisers, but also on education around accurate tracking and attribution.
The opportunity for growth in Latin America is absolutely staggering. The amount of users with mobile devices and access to internet connections is massive; eMarketer predicts over 120 million smartphone internet users in Brazil alone in 2017. This provides a very big opportunity for growth and a lot of advertising dollars that will be spent in the region.
A big majority of that spend is still in branding or display. However, we’re seeing and experiencing a shift with our client base. Quarter over quarter, more and more performance based campaigns are launching in the region.
In 2014 we asked two experts how developed the Latin America market was, to which they admitted that it still had some way to go. Is this still the case?
BO: I think this is still the case. There’s a knowledge gap between brands and networks in Latin America, and misalignment in brand strategies.
Mobile is still new in Latin America. Although brands know they need to have a mobile presence and new users, they are not sure how to get them. They are also not sure how to accurately attribute the source of all the traffic and new users. Without understanding where users come from and who they are, you can’t accurately advertise to them and make sure you’re getting the most out of your ad spend.
Currently, advertisers are only asking about CPM. That’s an old school mindset and they need to start paying based on engagement and action rather than impressions alone.
Personally, I’ve spent a lot of time in Latin America giving talks on global insights within the performance marketing industry around the world. I’m trying to inject the technology and knowledge in Latin America to help the entire industry work together more easily and efficiently. The great news is that the response that we’ve seen from this has been resoundingly positive. Companies are beginning to understand the need for new technologies to make their own lives easier, and easier to work in a global capacity.
Has the emergence of the ‘Latin America prospect’ had much of an impact on TUNE’s priorities and strategies?
BO: Absolutely. Our priorities have shifted at TUNE, specifically with our HasOffers product. We’ve helped ad networks, agencies, and publishers work more effectively with advertisers in the region. We’re also helping them grow and scale their business outside of Latin America.
For global companies looking to enter the market in Latin America, with the right tools and technology in place there, everybody can work together and in an automated fashion. Since shifting to managing all of Latin America for TUNE on the HasOffers side, I’ve noticed the need for education in that region. Providing educational content and events have really paid off in helping both the industry and our client base grow in these countries.
Which elements of the performance marketing mix have evolved the most?
BO: Mobile, hands down. Without a doubt, mobile is top of mind when you talk to anybody in performance marketing.
Just two years ago, tracking mobile-based campaigns, or even the prevalence of mobile apps was just not there. Fast forward to now and you have marketing strategies around mobile, as well as actual results to share. Granted, Latin America is a little behind the curve compared to more mature mobile markets, but it has evolved nicely. Slowly but surely Latin America will mimic what India has seen with exponential mobile growth.
Which emerging trends in Latin America are you most excited about?
BO: I like seeing that brands understand they need more engaged users. They have put KPIs in place with their partners to make sure they are gaining the right users and customers.
Currently, there are no third-party software providers in Latin America that can help measure and quantify the numbers around these KPIs. HasOffers is changing that. We have a strong client base in Latin America, and the need for TUNE’s products and our people is high. Not only is this helping the industry grow, it’s helped us grow as well. We’re building some of the best partnerships and relationships I’ve ever had.
And what are the key challenges facing this region?
BO: I’d say Latin America is much slower moving than a lot of other regions in regard to performance marketing. The sense of urgency is not as high as I’ve experienced in the U.S. and Europe. It takes a long time for companies to make a decision on which direction they would like to go in terms of technology or strategy for advertising. Unfortunately, that can put the company further behind the curve. Aside from that, and the biggest key challenge would be the economy.
Global companies like TUNE have prices for products and services that may not translate well in a country with economic instability. I’m not an economist, but I do understand that these fluctuations in currency value can pose issues. When it comes to choosing hosted software with built-in monthly costs, the decision may not be an easy one. I think things will stabilise more as the region grows and matures. But for now, it’s something the people and companies that are doing business there deal with quite frequently.
Finally, what advice would you give an advertiser looking to sell within the market?
BO: Find the right tools and have the right tech in place to effectively work with your supply side partners. There are a lot of great solutions out there that make it easy to work with them, but understand the ecosystem and know what you need to be successful. Ditch the status quo of relying on your partners to prove the campaign results to you. Own that and show them yourself what results you’re seeing and where you think improvements can be made.
Don’t be afraid to look at all channels of marketing and own them yourself. This includes affiliate programmes for large advertisers. If you own and manage that channel, you can control the results better. Choose who you would like to work with and control the relationships and payout on a 1:1 relationship with your direct publishers and networks.