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According to the eMarketer Latin America Retail Media Advertising Trends 2023 Report, Latin America’s retail media market boasts some of the highest return on ad spending in the world. Let's summarize the main ideas:
Latam region
The meteoric rise of ecommerce has had dramatic implications for consumers. Studies show that shoppers tend to favor retailers’ marketplaces when researching products and that advertisements on these platforms have considerable influence. With the phasing out of third-party cookies, advertisers are being compelled to locate where data and customers are. Thus, turning to retail media networks (RMNs) is becoming a natural choice; they provide targeting, measurement, and attribution capabilities necessary in this fractured digital landscape. Further incentivizing investments in RMNs is their particularly high return on advertising spending (ROAS) found in countries like Brazil and Mexico.
Retailers were among the fastest-growing digital advertising players in 2022, according to the report estimation. Three of Latin America’s most prominent retail and ecommerce players—Mercado Libre, Falabella, and Walmart Mexico—were among the leaders.
The region is surging past $1 billion in retail media ad spending. The format will grow to represent 16.5% of ecommerce marketing spending in the next two years.
As seen with other trends, Latin America could potentially follow a growth trajectory similar to that of the US, where the format will top $45 billion this year. The survey estimates that retail media accounted for 7.7% of digital ad spending in Latin America in 2022 and that’s on par with retail media’s 8.3% share in the US four years earlier, therefore the US retail media boom could be an easy preview of what’s to come.
According to the latest estimates from Statista Digital Market Insights, the Latin American and Caribbean e-commerce market reached a value of US$125 billion in retail sales in 2022. By 2027, this figure is expected to almost double and exceed US$243 billion. Dollars. Both values would be the highest recorded for this sector, which continues to grow year after year and increase its participation in national economies.
Why now?
Today, 8 in 10 product searches are performed directly on an eCommerce site. After the emergence of search engine ads in the 2000s and the eruption of social media in the 2010s, retail media is now a key tool for those seeking an efficient sales strategy.
Consumers are changing the way they discover and purchase products, and choose brands. The fact that 70% of product searches are generic can be read as an opportunity for brand positioning in a context where consumers have a purchasing mindset.
Retailers’ digital properties are incredibly influential. In Brazil, more than 4 in 5 digital buyers have been influenced by a retail media ad they saw while shopping online, per an August 2022 Opinion Box and Americanas Advertising survey. The study found retail media to be an effective driver of sales among consumers of all ages.
Through dynamic ad formats like native advertising or sponsored content placements embedded within relevant online spaces frequented by customers in Latam countries, eRetail Media offers businesses an effective means of creating brand awareness and driving overall sales growth even amid challenging circumstances.
Capitalizing on retail media
- Choose the right retail media network. Each platform has varying reach, audience demographics, and ad offerings that can greatly impact the overall performance of a particular marketing campaign. Whether it’s to target consumers regionally, locally, or within a particular category—like grocery—advertisers are not short of options. Ultimately, they should select the retailers whose networks best align with the advertising goals and objectives they’re looking to achieve.
- Diversify the retail media mix. Marketers must integrate their advertising efforts across different touchpoints on the path to purchase, including on-site, off-site, and in-store. Doing so will help them deliver consistent brand messaging on each of these channels, all while improving the advertising experience for customers as shopping habits become more fluid.
- Personalize campaigns with retailers’ first-party data sets. The imminent loss of third-party identifiers will increase advertisers’ reliance on first-party insights to tailor content product recommendations and offers based on individual shopper preferences and behaviors. When done right, this personalized approach will help marketers boost customer engagement and drive conversions at the onset of the buyer journey.
