MOZ research – compiled for the LATAM region
At the beginning of 2017, the economies of Colombia, Peru and Ecuador show unimpeded growth, Brazil and Chile are maturing from BRICs into bone-fida OECD powerhouses, and a genuine export stomping ground for many western manufacturers, JCB are a good example. Argentina in the meantime is waking up from its long deep sleep in the hands of donkeys. We have compiled this research in the interest of untangling the LatAm region for our UK/US counterparts from a digital marketing perspective. With all of the research on social media encompassing OECD countries it can be difficult to get a real idea of just where LatAm stands right now.
A couple of disclaimers and considerations. It was originally made by MOZ as a worldwide study but we have extrapolated data for the LatAm region. Therefore there are fewer responses than desirable, but the aim is give the reader some insight into the region and the opportunity it currently presents.
Also to note that the quantitative research provided by Moz may weigh more towards SEO and SERP, this is because that company is very grounded in that field and so its participants will naturally be from the same background. Also that any qualitative research that we use from our clients and partners in South America cannot be named sources due to sensitivity, and finally that the resulting research compiled comes from people and not from companies’ databases. So the responses may be based on understanding, not fact. And finally this post is intended to paint a clearer picture of digital marketing in Latin America at the start of 2017, a big year ahead. The respondents made up 55 people coming from the following countries.
The population had a lesser impact on the results than level of industrialisation. So the populous Brazil, boasting over 200,000,000 people delivers double the number of respondents compared to Argentina with a population four times smaller at under 50,000,000.
The industry is also more male than female in the LATAM digital marketing sector, and you can surmise what you will as the total percentage of women in the workforce across Latin America is 40%. Moreso, it is the young and vibrant minds that are filling the jobs, this is is most likely as the adoption and understanding of new technologies involved in this sector are used mainly by the under 35s.
As we mentioned earlier the majority of respondents from this research work in SEO. So it interesting to see that in second place is Inbound Marketing. Our experience in the region is that outbound and publishing are still the strongest agencies in Latin America and still hold the brand equity. The immature market is still opting for magazines and ad space, but digital is getting its foothold as clients become aware of the importance of SERPs.
And in fitting with the EU it is the nimble companies that are making the step across. The reason is explicit above. The brand equity held by the incumbents results in higher marketing costs for noobs and SMEs. As the results inevitably show digital bringing more efficient results, this will consolidate agencies’ positions and the cost will increase for digital marketing.
The statistic is also skewed by the number of SMEs in Latin America. Against the wider world the investment in marketing will inevitably be smaller, but the number of very small businesses with a marketing budget is a healthy sign. The current cost of ads in South America is around the same as it was in 2006 in the US, or between 20%-40% of the current CPC. The growth since 2014 of over 50% in CPC in the US market will also be seen in Colombia, Argentina and Peru (not so much in Brazil and Chile as they already maturing into quite high rates), so get in while the going’s good.
Many of the digital marketing agencies in South America have between 3 to 5 clients on their accounts. This statistic belies a model that spends time working hard on clients converted, but not looking outwards and investing in their own marketing. This is the agency equivalent of slitting your own wrists. It is also what we have seen as endemic throughout our years in the region. There is a discrepancy in the number of accounts vs the number of projects, does this mean that agencies have clients with projects on pause? Maybe so.
The digital teams are there but the market is as yet immature and partnership is required with US and EU agencies to offer the investment required for higher growth in the sector, to get the right clients that will knock out the incumbents.
With Google+ in third place we smell a rat. Once again we’re blaming it on Moz. The use of LinkedIn throughout non-digital sectors Latin America is prolific with over 22 million unique visitors a month.
Why do we think this important for marketing? Because to have a platform that can target individuals with ads at littleover $1 per click (it’s $4-$8 in the EU and US) is something that needs to be harnessed. The companies that want to use LinkedIn to get their businesses growing in LatAm have a huge opportunity that will diminish daily as the regional profits grow for the social networks.
So maybe more respondents would have given us a clearer picture but we are contrasting this against our own qualitative understating having been in the region for the last 5 years, and the results are reflecting what we know.
If you are looking to open business in Latin America do it now. Costs are only going to increase in ads, this is inevitable, so even if you don’t do it now do it quick.