What’s Holding Back Programmatic In Latin America?

victor-lopezData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Victor Lopez, programmatic media director at Affiperf.

Latin America is not usually in the spotlight for the latest ad tech happenings.

But as with many types of technology, developing countries are known for leapfrogging. Across each country in Latin America, programmatic is finding its way into an increasingly larger percentage of media plans.

This in and of itself is a success. Some countries, such as Argentina and Brazil, are living through tough economies right now, but programmatic investment in the region is set to increase nearly 600% in 2015.

Publishers and agencies alike are shifting more focus than ever toward programmatic, yet challenges, such as a small talent pool and lack of data, must be overcome before advertisers fully embrace programmatic as a key strategic channel.

Help Wanted

Pure programmatic talent is hard to come by, even in regions where programmatic is more prevalent. In Latin America, where only recently has digital become a staple of media plans, finding programmatic talent is nearly impossible.

To adapt, many agency trade desks have simply moved people from standard digital teams to programmatic. As I’m sure happened elsewhere, there is one difference that leads to my next point, which is about relationships.

Tested Relationships

To better understand why Latin America has lagged behind most of the world in adoption, we have to understand how business is conducted.

In Latin America, relationships with vendors and media are closely linked. Many people who used to be in standard digital planning have been working with the same publishers for years. If someone else offers better pricing or a better solution, such as programmatic, the account planner or director is reluctant to move or test. It is the “We have always done things like this” approach.

Often times, companies from the US or Europe wanting to do business in Latin America will have a difficult time because they do not understand this cultural norm. Taking the time to develop relationships is crucial in the region.

More Video And Third-Party Data Needed

The largest tactical challenge to date in Latin America is still video and third-party data. While today there is considerably more video available than there was three years ago, thanks in part to private deals, the numbers really decline the moment you start to segment audiences.

Of all the tactics used in programmatic, third-party data remains the most challenging. Most data providers from the US have limited data in the region, and only recently have third-party data providers emerged that explicitly focus on Latin America.

Conversely, many advertisers do not have not data-focused strategies because their first-party data is limited. Showing clients the value and importance of collecting and using first-party data has become a common theme in many agencies.

The DMP Makes An Entrance

As first-party data is used more frequently and third-party data becomes more readily available, another key component is also starting to take root: data-management platforms (DMPs).

Many well-known DMP companies are out of the price range for clients in Latin America due to lower media budgets. But local solutions and those imported from places like Spain are taking root.

Private Deals: Springing Up Everywhere

The basis for most of programmatic is standard display. In larger countries, such as Mexico and Brazil, having enough supply is usually not a problem. Mobile supply, while not as prevalent due to the high cost of data in Latin America and limited Wi-Fi spots, is still generally available, too.

But for many brand-conscious advertisers, serving on specific sites is still the preferred way to do digital. Private deals allow for that option and educate them on the benefits of programmatic.

In the face of these challenges, a lot of progress has been made in a short period of time. Publishers are offering more inventory programmatically, private deals are increasing, advertisers are implementing DMPs, more data and video inventory are being requested and more programmatic talent is being hired.

Recently, I served as a panelist for a discussion on video advertising in Latin America. Attendees included publishers, agencies and a few advertisers. This small intimate affair was, to my knowledge, the first of its kind for the region. The fact that the panel was created and attended is a testament to how far programmatic has come in recent years in Latin America.

Follow Victor Lopez (@programarketer), Affiperf (@affiperf) and AdExchanger (@adexchanger) on Twitter.

1 Comment

  1. Another challenge for programmatic growth is that many advertisers are still very focused on driving click-through rates and conversions.

    While advertisers in the US have been quickly moving to actually meaningful performance metrics like view-through conversions, multi-touch models, site traffic, CPC and viewability, there is a reluctance to value these in Latin America. This leads to many sticking with the same vendors that specialize in hitting those outdated metrics.

    Reply

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