What: During the last months, there have been reports of Latin American economies resurfacing, with accelerated growth forecasted in 2018.
Why it matters: Growth acceleration means opportunities for investors and marketers. Amnet's Cristian Figoli, Group M's Cynthia Evans, and ComScore's Iván Marchant explain what this means for marketing services.
1. GDP is Growing at a Strong Pace
Cristian Figoli, Amnet Argentina, Dentsu Aegis
Marketers and economists agree that there are unequivocal signs of recovery in several Latin American economies. For Cristian Figoli, head of Amnet Argentina, "the signs are definitely there, especially tied to higher investments and bets from global companies in the region". Companies have their eye on Latin American countries because, as Focus Economics explains, the economy in these regions is accelerating at a great pace: the strongest recoveries are expected in Argentina thanks to various reform efforts and a healthy global backdrop, and Brazil is expected to benefit from lower interest rates and a recovering labor market.
The LatinFocus Consensus analysts see regional GDP growing 2.4% in 2018. In 2019, growth is seen rising modestly to 2.7%. According to Cynthia Evans, director of insights at Group M Latin America, the signs are hard to miss: "GDP is stable, advertisers are planning with a slight uptick in budgets, and currencies are more stable."
2. Digital Growth Will Continue to Influence Marketing
Iván Marchant, VP at ComScore Mexico, Colombia, and Peru
A big sign of recovery, according to Iván Marchant, VP at ComScore Mexico, Peru and Colombia, is the growth of the digital industry: "We can see growth not only in the audiences on the internet but in the usage of different devices," explains Marchant. "Every day people are using more and more mobile devices. In terms of advertising, investments in digital are also rising. In almost all countries in the region, the growth in digital advertising is around 10 times the growth of their national GDP."
When things change, the opportunity to improve communication is larger.
Digital transformation is moving really fast, which should mean something for marketing and media services. For Marchant, "When things change, the opportunity to improve communication is larger." According to Amnet's Cristian Figoli, "stronger economies are developing technology to improve marketing services, which is beneficial for the full marketing ecosystem."
3. How to Prepare for Political Risks
The main threat to economic balance in Latin America in 2018 will be the unstable political environment. The presidential elections in Costa Rica, Cuba, Paraguay, Brasil, Mexico, Chile, Peru, and Colombia mean that about 80% of the population in Latin America will be choosing new rulers this year, which makes investors wearier.
Cynthia Evans, Director of Insights at Group M
Other reforms, such as renegotiations of Free Trade Agreements, as well as energetic reforms, rend it necessary for marketers to prepare for possible unforeseen risks. Group M's Cynthia Evans strongly recommends to "Hold some budget for opportunities and plan around presidential election or World Cup events, when the consumer's attention is diverted." And as ComScore Iván Marchant points out, "A lot of the advertising investments will be moving towards the government category; this year the demand for marketing services will benefit from this environment."
4. Which Marketing Services Will Prevail?
In 2017, we saw digital spaces gain more importance than ever, and so we should expect digital to continue growing in 2018. As Iván Marchant explains, "[Mobile] devices will be leading the efforts from all marketers and media devices. Automation services like programmatic media selling/buying will be also consolidating its pace in the market."
As digital needs evolve, we'll see that certain marketing services are in demand. In particular, we should keep an eye on "measurement, ROI, and performance, including viewability, transparency, and proof of performance," says Cynthia Evans. "Trading and negotiation is a strong thread especially as digital business models evolve."
5. 3 Lessons From 2017 to Apply in 2018
For Cristian Figoli, the most valuable lesson is that we are in a moment of transformation and innovation. "People live digital lives and expect more from brands," he asserts. "They expect to engage and transact with just a click, and companies need to adjust to this new paradigm to emerge on top."
However, the path that marketers have been following so far has brought them success. According to Cynthia Evans, it's all a matter of "Continuing building multi-platform, multi-media, multi-country synergies, integrating media, and synchronizing [the right] measures and language."
Finally, Iván Marchant's advice has to do with brand safety. "We saw a big number of brands whose advertising was displayed in contexts that were not appropriate," he points out. "Now technology allows us to take care of the brand's value by avoiding to display advertising in the wrong context." The signs of recovery are clearly there; it is up to brands and marketers in general to make the most of them.
Janet has worked as a translator and editor for magazines and publishing houses including Expansion and Grupo Planeta since 2014. She is part of the Portada editorial team, and her main interests include literature, traveling, and exploring new cultures. Follow me on Twitter!