2020 Latin America Report on Programmatic In-Housing

2020 International Report on Programmatic In-Housing 1


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Executive Summary

  • Programmatic advertising has been on a meteoric rise. Programmatic’s share of digital ad spend worldwide is expected to grow to 68% this year with Latin America not far behind at 63%.
  • The LatAm market, in particular, is poised for programmatic growth as mobile usage is rising dramatically. Mobile accounted for 63% of LatAm programmatic digital display ad spend in 2019.
    • As internet usage increases, video content is growing in prominence. Brazil, one of the largest markets for programmatic video ad spend, is projected to be 6th largest programmatic video ad market in the world this year.
  • Brands desire more control over programmatic, and we are seeing a trend towards brands in-housing some or all of this function. The majority of LatAm brands surveyed have moved some function of programmatic buying in-house. 16% of LatAm organizations have completely moved this function in-house, and almost half have partially moved programmatic buying in-house.
    • In-housing of programmatic allows brands more transparency over the operation, which increases cost efficiency and campaign effectiveness, allowing for better ROI attribution.
  • Within LatAm brand organizations that have brought their programmatic in-house, most are taking a hybrid approach and partnering with an agency on some elements of the operation.
    • Many organizations are either currently working with or would consider working with a partner on technology infrastructure and campaign analysis/optimization.
    • However, there are some functions, like algorithm creation and key performance indicator (KPI) development, that these organizations prefer to keep in-house.
  • The General Data Protection Regulation (GDPR) was implemented in the EU in May of 2018. However, LatAm has been late in enacting their own guidelines with only a handful of countries enacting legislation on data protection.
    • Nonetheless, LatAm organizations are very supportive of a stricter regulatory environment. The current guidelines, though, are nebulous, and most organizations are struggling with what constitutes compliance.
    • Earlier, there were concerns that regulations would negatively impact consumer trust for brands and limit brand profitability, yet those concerns have been largely unfounded. In fact, an unexpected benefit of regulations is that brands are now working with cleaner data. While regulations have culled down the number of customers who can be targeted, those that remain are more relevant and interested, resulting in a more effective ad spend.
  • The future of the regulatory environment continues to evolve, but the anticipated limit or disappearance of cookies and third-party data magnifies the need for companies to manage their own first-party data. Thus, the ability to implement effective programmatic advertising hinges on an organization’s ability to obtain and manage its customer’s data.
  • The digital ecosystem is constantly evolving through innovation and technological advancements, which will create new opportunities and needs within programmatic, both for brands and agencies.
  • The COVID-19 pandemic has impacted brands across the world, with many limiting or shutting down operations. As a result, short-term spend on advertising has decreased and/or been repurposed, though it is unclear what impact, if any, this pandemic may have on long-term advertising.
    • Some struggling brands, like those in hospitality or travel, have almost eliminated advertising. Others that are still operating, like grocers, Consumer Packaged Goods (CPGs) and telecommunications, are creating more relevant ads to reflect the current environment.

Read the report in Spanish