Mobile marketing set to explode in Latin America

By Marcio Chaer, Director of Advertising Acceleration in Latam, Telefonica Digital

17 June 2013: Telefonica Digital has recently announced it will be the headline sponsor for the Festival of Media LatAm in September. This is a key regional advertising event and, as one of the leading mobile marketing companies in the region, we are excited to support it.

Latin America is emerging as one of the most exciting territories for mobile marketing in the world. Although the UK and US have traditionally been the pulsing heart of the mobile marketing industry, large cultural and technological shifts happening in Latin America are set to supercharge its adoption across this region.

Latin America already has more mobile connections than people, and according to recent research from Ovum, smartphone penetration in South and Central America grew by 170% between 2010 and 2012 to 34%, and is forecast to hit 84% by 2017.

Smartphone growth in South America will soon get another boost, as Telefonica launches Mozilla’s Firefox OS handsets in the region, which will offer consumers affordable smartphones based on the Firefox open mobile ecosystem to counter the price barrier that has held back iPhone & Android adoption.

It’s not just about device sales though. In a recent study carried out by WIN / GIA and the GSMA, Latin American consumer is also much more likely to regard their phone as helping them to make better purchase decisions than consumers in other regions. For example, 51% of Latin American consumers believe their phone helps them be a smarter shopper, compared to a global average of 37%. This suggests those in Latin America are much more open to receiving relevant marketing messages via their mobile devices than other regions.

With mobiles seen as such an aspirational product that can help improve everyday life, it’s unsurprising that mobile advertising is extremely welcome in the region. The research also found consumers in Latin America regard mobile advertising as valuable, with 38% of consumers welcoming mobile ads that are relevant to their interests and 25% favouring ads that can save them money.

This is partly owing to the rapidly growing middle-class in Latin America who consider advertising as an enabler for them to purchase traditionally unaffordable products at favourable prices. This is in stark comparison to the traditionally more affluent economies such as Western Europe, where there is a more pessimistic attitude towards mobile advertising with only 11% of users welcoming mobile ads and only 21% saying they find discounts and offers promoted via mobile appealing.

All these interlinked factors mean Telefonica Digital regards Latin America as an exciting region for mobile advertising growth where we can play a leading role in enabling our advertiser and agency partners to get closer to their customers with engaging, personalised marketing solutions. Indeed, we believe it very likely that mobile marketing in Latin America could grow even faster than in Europe.

Predictions by eMarketer support this view, with total mobile ad spend in the region set to grow to $581m in 2016, from just $79m in 2012 – an average annual growth rate of 65.5%.

To help drive this growth, Telefonica Digital is investing heavily in the region. We’ve already launched our mobile advertising business in Brazil, Argentina and Mexico, and we will be expanding into other Latin America countries over the next 6 months. I am personally also in the process of creating a larger Latam Advertising Acceleration Team who will focus on educating marketing managers and their agencies across the region on the benefits of permission-based personalised mobile marketing.

We are also conscious that feature phones still account for some 76% of mobile devices in the region. Although smartphone penetration is expected to grow rapidly, it’s also crucial that we develop mobile ad solution products that are tailored for the handsets consumers use today. Unlike the ‘one size fits all markets’ approach taken by most mobile advertising companies in US and Europe, Telefonica Digital is launching a range of ad products for both feature phones and smartphones.

For example, we already have been running demographically targeted SMS in all 3 countries for a while, and more recently in Brazil, our local operator brand, Vivo, launched a service offering their customers free call time in return for listening to a 15 second audio ad.

Latin America is at a tipping point with mobile advertising and Telefonica Digital is excited to be playing a central role in driving its development.

This article was also published in The Wall