This post is by José Luis Valdivielso, COO Affiperf Espana Latam. He spoke at the LATAM Festival of Media in Miami and regularly visits Latin America to promote the benefits of programmatic.
Until brands start demanding more automated inventory and agencies develop the necessary skill-sets, Latin America will always lag behind its European counterparts.
Last year, €878.4 million was spent on digital advertising in Spain. That's a 21% share of the overall advertising spend, second only to TV. This year, it's expected to rise again and could reach €1 billion by the end of 2014.
Two factors are driving this growth, more sophisticated programmatic buying and the proliferation of video. According to global research specialist IHS, programmatic video ad buying across the UK, Spain, Germany, France and Italy is growing at an average of 77% per year and could be worth a combined €627 million by 2017.
In the predominantly Spanish-speaking countries of Latin America however, it's a different story. Recruiting English-speaking programmatic experts is nigh on impossible, so agencies are having to train staff from scratch to use the automated platform.
Companies who sell third-party data don't exist in countries such as Peru, Colombia and Chile. Blue-chip global companies who have recently penetrated the markets of Argentina and Brazil for example, are cautious about handing over first-party data to their agencies. Even if the data exists therefore, it's not being used programmatically and brands are not seeing the associated benefits of data segmentation for performance enhanced marketing.
The brands will be the drivers of programmatic change. They need to trust the role of the agency, invest in programmatic technology and demand premium inventory from publishers.
Across the region, publishers are reluctant to supply inventory to existing exchanges because they believe it will cheapen their product. I believe programmatic ad buying should be a premium service due to its ability to optimise a campaign globally and in real-time. We should all be singing from this hymn sheet.
The fact is however, brands across Latin America are too localised, focused on generating only local ad impressions and building regional brand awareness, over and above analysing global data trends relating to the improvement of the customer journey.
We need to get Latin American brands to think in terms of dot.com because the value of a global impression on a site such as the Financial Times for example, is far greater than localised impressions generated from within Colombia or Argentina. Also developments in programmatic that make things faster and less complicated will help empower us to develop a more streamlined approach to analysing and sharing knowledge – like our Meta DSP.
Just as video is driving growth in programmatic advertising across Spain and other parts of Europe, the potential for video in a Latin American ad market, focused on brand awareness, is huge.
But there needs to be greater demand in order to generate supply. With demand will come more investment in training, and maybe even opportunities for Spanish-speaking experts. The Latin American publishers will respond with inventory if the market dictates that programmatic has a real future.
Affiperf Espana Latam is a Spanish programmatic pure-play, owned by Havas Media Group, allowing advertisers to take advantage of the unique opportunity that programmatic media buying creates.
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