How Marketing Is Evolving in Latin America
How Marketing Is Evolving in Latin America
Latin America is a modern marketer’s dream, and not just because of its size. By 2020, nearly one out of every 10 dollars in the world economy will come from Latin America. The region will soon represent 10% of the global population and 9% of global GDP, with 640 million customers. It also has the fourth-largest mobile market in the world, with social media adoption even surpassing that of the United States. Positioned at the forefront of digital and mobile adoption, Latin America provides an interesting look into how new marketing trends are taking hold on a global scale.
At HubSpot, we conduct an annual global survey on the state of inbound marketing, which involves capturing customers’ attention with valuable content discoverable through social media and organic search — a more efficient approach to lead generation in the internet era than traditional “push” marketing efforts. As part of this omnibus research effort, we surveyed 2,700 marketers who reside in Latin America, where inbound marketing is seeing a wave of growth. We also spoke with several Latin American businesses that are practicing this new way of marketing to hear about what it’s like to undergo this shift. Our research reveals that inbound methods are a particularly good fit for small and medium-sized businesses, which are plentiful in Latin America, that have traditionally struggled to compete with larger companies and their marketing budgets. A few highlights show how marketing is evolving in Latin America—especially when it comes to inbound techniques:
Inbound marketing is commonplace in Latin America. The vast majority (86%) of Latin American marketers surveyed were familiar with inbound marketing, and 60% said they practice it today. (Since this was the first year we had a large sample size from Latin America, we won’t have comparison data until next year.) Roberto Madero, the CEO of GROU Crecimiento Digital, a marketing agency in Mexico, explains that Latin America is following the lead of business leaders in the United States and Europe. “Financial pressure is forcing companies to become more efficient, and more Latin American executives have started shifting some of their marketing dollars to search engine marketing. It’s more measurable, targeted, and effective than traditional advertising,” Madero said.
These sentiments are echoed by Andre Jensen, director at Agência Inbound, a marketing agency in Brazil. He sees inbound marketing as a way to gain a strategic advantage over local competitors and explains, “Inbound marketing provides a considerable competitive edge for companies wanting to increase win rates while shortening their sales cycles.”
Marketing automation software is not prevalent yet. More than one in every three companies in North America purchase some type of marketing automation software. These tools do some of the heavy lifting for marketers by automating processes such as sending e-mail campaigns to segments of a database, guiding them to marketing offers, collecting their data, and adding them to workflows.
By comparison, very few companies in Latin America use marketing software today, and only 3% of respondents listed automation as their top priority for software features. Instead, these marketers are more focused on other areas, such as content creation and SEO. Why so? Generally, leads that come to salespeople from inbound techniques, in which someone is already searching for a solution, tend to be highly qualified and close more rapidly than leads obtained from outbound methods.
The cost of acquiring leads is lower for companies that use inbound marketing. Companies in Latin America that are using inbound techniques spend 63% less to acquire new leads than those that do not. This is likely because inbound marketing focuses a marketer’s efforts on reaching buyers at the time they are already searching for something. Outbound techniques are far more expensive, and often involve flooding the market, including those who are not necessarily interested, with messages in an effort to lure buyers out of the woodwork.
In fact, some businesses, such as Samba Tech, a video hosting company in Brazil, have redesigned the entire marketing function in response to the inbound trend. A year and a half after moving toward an inbound-led strategy, they reported impressive results. “Inbound marketing has helped us close four times more clients than in the previous year,” explained Pedro Filizzola, the company’s CMO. In short, Samba Tech has found what many other companies are discovering: inbound marketing costs less and leads to more revenue.
Other types of marketing are getting more expensive. In the past, paid search was an inexpensive way to reach customers in Latin America. However, costs are rising slowly over time, as there is more competition from companies trying to out-bid each other. Even though the price hikes have been gradual so far, budgetary constraints are causing more businesses to move toward less costly inbound approaches. Javier Morales, co-founder and director of Leads Rocket, a marketing agency in Chile, pointed out, “As pay-per-click grows in Latin America, we have found that our clients do significantly better when we complement it with content, social media, and other tactics.”
Visual and video content are more important in Latin America. When asked about their top priority projects, 17% of marketers in Latin America reported prioritizing visual and video content, compared to 11% of their North American counterparts. With higher adoption of mobile and social in this region, it makes sense that this type of content would be prioritized. Latin America has been picking up steam for online video consumption for a while now, with countries likeChile leading the way.