When we discuss digital marketing in Latin America, we should immediately focus on mobile marketing. That’s because LatAm is one of the fastest-growing mobile markets in the world, with growth driven at least partially by the COVID-19 quarantines.
A 2020 report from GSMA estimates that by 2025 more than 80% of Latin Americans will own a smartphone. This will make the region’s use of mobile data go up by 5 times compared to 2019 (before the pandemic). The three countries expected to drive this massive surge in LatAm mobile data use are Brazil, Mexico, and Colombia.
Other interesting data from the GSMA report includes:
- By 2023, 60% of Latin America’s population will be subscribed to mobile Internet service
- In 2019, the mobile industry contributed to 7% of Latin America’s GDP
- The biggest mobile market in LatAm is — unsurprisingly — Brazil. In 2019 it had a smartphone adoption rate of 85% and a 70% penetration rate of subscription to mobile services
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The 2024 Latin America Forecast
AMI’s leadership team offers a 2024 economic, business and political outlook for Latin America, as well as a sector-by-sector analysis of 5 major trends in the region.
Given this, what kind of approaches should companies take when operating in Latin America in 2021? Beyond noting the mobile market growth, it’s crucial to get at driving factors, particularly behavior. As such, below we identify 6 key digital marketing approaches for companies to employ in Latin America and the study data that supports taking them.
#1 Focus on More In-App Advertising
During Q1 2021 there were more than 1.3 million mobile app downloads in LatAm on both iOS and GooglePlay, according to AppsFlyer. The report with this data point notes: “Mexico, Brazil and Spanish-speaking LATAM outpace the downloads market, seeing strong growth year over year — a huge opportunity for mobile marketers.”
80% of Latin Americans discover a new brand through Facebook, versus just 13% through TikTok.
Without a doubt, this offers great potential for focusing budgets on in-app advertising, particularly with games, social media, and messaging apps. Game app advertising make sense because of the massive popularity (612 million downloads in Q1 2021, as per AppsFlyer). Investing in in-app ads on social media and messaging apps will deliver powerful reach due to the number of active users on these: Facebook and WhatsApp are the number 1 and 2 apps in LatAm, respectively, in terms of users. However, TikTok is the app that currently is #1 in terms of downloads in markets like Brazil, Argentina, Mexico, Chile, and Colombia, according to 2020 data from Hootsuite.
#2 Prioritize Facebook and Instagram for Market Entry — Using Mobile Ads
When trying to introduce a new brand into Latin America, especially on the consumer side, recent data from Oracle suggests established social media players are a better choice than the upstarts.
According to Oracle’s 2020 Anatomy of Change report:
- 80% of Latin Americans discover a new brand through Facebook
- 60% of Latin Americans discover a new brand through Instagram
- 56% of Latin Americans discover a new brand through YouTube
- 13% of Latin Americans discover a new brand through TikTok
So, despite the burgeoning popularity of TikTok, the first two platforms appear to be much more effective for getting a new brand discovered by consumers in Latin America. The graphic below shows how particularly dominant Facebook remains in Latin America.
And where does this massive reach come from? According to Hootsuite data, between 97.5% and 98.9% of Latin American users access Facebook from their mobile phones.
#3 Take Advantage of AVOD… but Improve the Quality
The GSMA report ranked LatAm as the global leader in terms of the engagement among mobile services users, especially when it comes to consumption of entertainment and media. According to surveys done by the organization, 58% of mobile users in Brazil and 67% of mobile users in Mexico watch videos on mobile devices at least once per day. In contrast, in the U.S. only 39% of mobile users watch videos once a day.
70% of Latin America users do not feel represented in AVOD ad spots.
Based on this level of engagement, experts agree that advertising-based video on demand (AVOD) will continue to be a strong-performing channel in Latin America. With AVOD, users access free multimedia content in exchange for viewing ads. YouTube is the leader in this format, followed by videogame apps. Even the subscription-based streaming services that are so popular in LatAm offer these alternatives for watching content. In fact, GlobalPay, Brazil’s most popular video streaming service, already offers some free content through AVOD.
However, favorable figures are not helpful if the advertising spots are weak. Penthera’s recent report on Latin America’s video streaming, which covers Q1 2021, is based on survey data and indicates that 70% of Latin America users do not feel represented in AVOD ad spots.
As such, brands should factor in the following when using AVOD to target LatAm:
- 57% of Latin Americans don’t feel represented in AVOD ads because the products offered in the ads aren’t local
- 29% of Latin Americans don’t feel represented in AVOD ads because these are a translation from English or Portuguese
- Nearly 26% of Latin Americans don’t feel represented in AVOD ads because their native languages are being used in combination with others
- Nearly 28% of Latin Americans don’t feel represented by AVOD ads because the actors in them aren’t Latin American
#4 Design Ads in a Vertical Format That Fits Mobile Phones
ComScore’s 2021 report, Estado del social media en América Latina, indicates that:
- 65% of respondents consider vertical ads to be more innovative
- 84% of advertisers prefer vertical formats because they offer a higher percentage of engagement
- 58% of interactions are produced by vertical videos
In addition, it’s recommended to have permanent interactions by way of storytelling, which allows for meaningful connections with users.
67% of mobile users in Mexico watch videos on mobile devices at least once per day.
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#5 Work in WhatsApp as a Conversion Channel
If we’d like to determine which is the most-used instant messaging app in Latin America, we’d see that WhatsApp is #1, ahead of Facebook Messenger, Skype, Snapchat, Telegram, and others. In fact, we’d find that WhatsApp draws many more active users every month than Facebook Messenger.
It’s important to note that communication media, companies and even public institutions in Latin America are adopting WhatsApp as a direct communications channel to reach users. The impact of WhatsApp on LatAm is increasingly obvious, and as such, for marketers it has become an important conversion and loyalty channel.
That said, it’s important to clarify that WhatsApp doesn’t allow in-app advertising, so users can’t see ads while they chat or check for status updates. However, brands can leverage the app by using WhatsApp Business. They’d create a business profile and use that to show a catalogue of products, services, or rooms (in the case of hotels). This way, users who interact with a brand’s WhatsApp channel can see this catalogue and send a message indicating exactly which product or room they want. But they can’t buy products or make reservations — WhatsApp still doesn’t have a system in place for direct purchases.
More than 90% of Latin American users use WhatsApp.
On the other hand, on Facebook a brand can create ads to funnel traffic or get conversion going through WhatsApp. These ads appear in a brand’s Facebook feed with the button “Send WhatsApp message.” After clicking the button, the users are redirected to the company’s WhatsApp channel to interact directly with the brand or to look at its catalogue.
#6 Leverage More Influencer Marketing in LatAm
According to research published by ComScore in 2021, in 2020 influencer posts accounted for 6.5% of all posts made in Latin America. But an even more important data point is this: in Latin America in 2020, influencers were responsible for 52% of all interactions in the region.
Latin America has at least 12 million influencers, according to Influencity, a firm specialized in connecting brands with content creators that recently published a study on the region’s Instagram influencers. On that platform, Influencity’s study indicated that:
- 95.6% of people who create Instagram content in Latin America are nano-influencers (with between 1 and 1,000 followers)
- 3.7% of people who create Instagram content in Latin America are micro-influencers (with between 10 and 50 followers)
- 0.5% of people who create Instagram content in Latin America are medio-influencers (with between 50 and 200,000 followers)
- 0.1% of people who create Instagram content in Latin America are macro-influencers (up to 1,000,000+ followers)
- An even tinier percentage of people who create Instagram content in Latin America are macro-influencers (with 1,000,000+ followers)
Now, the most-recommended practice is to use small influencers by directly contacted them or using a platform like Influencity. Annette Sánchez, YouTube marketing manager for Latin America, indicates that when it comes to brand positioning, the content created by these small influencers is 4 times more effective than celebrity-driven content. Among the reasons for this, says Sanchez, is that the content produced by smaller influencers feels much more authentic.
Latin America has at least 12 million influencers.
That said, brands should evaluate the social media platforms that most impact their target audiences before developing partnerships with influencers. For example, TikTok has grown significantly in Latin America over the past year, spawning several famous TikTokers. However, 32.5% of the audience for TikTok are between ages 10 and 19, and the platform’s content is primarily entertainment. In contrast, Facebook, YouTube and Instagram are still the social media platforms most used by all age groups and genders.
FREE PRESENTATION
The 2024 Latin America Forecast
AMI’s leadership team offers a 2024 economic, business and political outlook for Latin America, as well as a sector-by-sector analysis of 5 major trends in the region.
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Contact us for a customized study of your target audience in Latin America to gain a more direct understanding of the best routes to reach it. We’ve conducted more than 600 market studies of Latin American consumers and could certainly give you the data you need to further refine your approach.
In addition, given the recent boom in e-commerce in Latin America, you may want to explore our LatAm E-Commerce Datapack, 2020-2024, to understand growth projections, product preferences, payment methods and more.
