Over the past five years, the Latin America region has witnessed first-hand how advertising and the structure of its players – brands and agencies – have fundamentally shifted. Latin America is in a unique position since much of the region – minus Brazil – has Spanish as a common language, meaning there is an incredible opportunity for brands to regionalise their communications efforts across this very nuanced territory.
The challenge for brands is how to maintain local relevancy between each of these different countries. It has become commonplace to see global businesses such as Unilever, Procter & Gamble, Adidas, General Motors, Burberry, Total, Johnson & Johnson, The Clorox Company and Estée Lauder setting up regional client teams to work out of hubs such as Panama, which offers beneficial tax rates as a result of long-standing good relations with the US. Away from their Panamanian marketing hub, brands often favour working with agencies that have teams on the ground in countries such as Argentina and Mexico, to the extent that it is becoming common to see pitches and briefs come in from clients requesting this pan-continental agency set-up.
The gap that used to differentiate a Latin American operation with a US or European one is non-existent
In terms of infrastructure, it’s particularly important to understand how internet penetration and usage differ in Latin America versus the rest of the world – especially when considering how digital media campaigns should be planned. Latin America lags behind, with only 49 per cent coverage. Chile and Argentina have the highest internet penetration, with 67 per cent and 65 per cent respectively. On the other hand, Latin American users have the highest social media penetration and usage – Chile and Uruguay have higher rates than the US. A similar scenario can be found in mobile, where there are more devices than people in several Latin American markets.
This has laid the foundation for an anticipated network coverage solution: 4G. Agencies and brands need to think about how to leverage this faster connectivity. In addition, several demand-side and data-management platforms have entered the market, which are helping to scale up data-driven ad buying and targeting.
Brands, agencies, technology and media have evolved and it is time for us as digital marketers to put the pieces of the jigsaw together and unleash the potential that this region holds for global brands. The operational gap that used to differentiate a Latin American operation with a US or European one is now non-existent.
The challenge today is around consumer understanding, relevant messaging, upgrading and upscaling operations through budgetary barriers. However, we are optimistic that creativity and ingenuity – our biggest strengths – will be able to address the challenges of this beautiful and diverse region.
Federico Risso is the chief operating officer, Latin America at iProspect