“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Martin Kogan, CEO at Headway Digital.
Emerging markets represent a bright opportunity for brands seeking to expand their market share.
Nearly 80% of the world’s population lives in a region considered emerging, and each year their collective economic output accounts for a larger share of the GDP. According to the International Monetary Fund, 2013 will be the first year in which emerging markets account for more than half of world GDP based on their purchasing power. What’s more, these markets will likely grow at two to three times the rate of the developed world in the years ahead.
Rapid economic growth has given rise to middle classes all over the developing world, including Latin America, Africa and Asia. Consumers are eager to spend their wealth on automobiles, electronics and packaged goods, as well as to sign up for services like Netflix, Spotify and LinkedIn Premium.
Agencies and brands in the US, Europe and Australia, now accustomed to the efficiencies of programmatic marketing, are asking if they can leverage RTB in the emerging markets. It’s a critical question given that few (if any) have direct relationships with publishers in these countries.
Here are five things you should be thinking about:
#1: Expect a mixed buying model
Lots of publishers are selling inventory via RTB, but make no mistake, it’s still in its infancy. Programmatic marketing will get you the audiences you want, but not at scale. Plan on augmenting your media plan with direct deals with local publishers, and partner with a local expert who can optimize the direct deal portion of your campaign throughout its execution.
#2: Concentration on the right scale
Doubtless you can get plenty of emerging-market inventory from the US ad exchanges, but it might not be the right scale. Take Latin America as an example. Many of the region’s biggest publishers have never heard of Rubicon, BrightRoll or AdX, which makes them reluctant to open their inventory up to these players. At the same time, their sites have the mindshare of their country’s consumers, which means you need your messages to appear on them.
Publisher reticence will change in countries like Mexico and Brazil, but it will take a year or two. After all, publishers in the US and Europe warmed up slowly to RTB, and are only beginning to offer their more premium impressions into exchanges now.
#3: Tune in to local language and cultural nuances
We've all heard the one about a Chevy Nova marketing debacle in Latin America (no va means "doesn’t go" in Spanish). The story is a myth, but it’s an instructive one. All marketers should pay very close attention to the language used in every market where their ads will appear.
And I mean local. We all know that most people in Latin America speak Spanish, but that doesn’t mean they all speak the same Spanish. In Argentina the word for swimming pool is pileta; in Mexico it’s alberca; almost everywhere else it’s piscina.
In many ways, language is the easy part. Cultural sensitivities are harder to know about beforehand, and can do far greater damage to a brand if a message inadvertently offends a local community.
#4: Know how your target audiences access the Web
In established markets, advertisers have a great deal of insight into how their target audiences access the Web; this knowledge lets them develop highly effective display, mobile, video and social buying strategies. Those strategies might not apply in emerging markets.
In some countries, smartphone penetration is small. Others, like India, have a huge number of Internet cafes, which serve as a primary access point for many consumers. In such cases, demographic targeting may be less effective, since an adult male and a tween female may use the same computer in the same hour.
Today’s buyers certainly have the expertise to tailor campaigns to local conditions; the trick is getting detailed insight as to what those conditions are.
#5: Data quality and quantity are not what you’re used to
In many -- but not all -- emerging countries, publishers are just figuring out how to monetize their inventory; they haven't even begun to monetize their audience data. That means quality audience data isn't widely available.
(Don’t expect to get emerging market audience data from the BlueKais and eXelates of the world. Due to low demand and high storage costs, the big US providers haven’t invested in these markets.)
But that’s not to say that data isn’t available. It's key to create direct Latin American publishers to access and package their audience data.