By Edmardo Galli, Managing Director, IgnitionOne LatAm
Brazil has always been promising. As a kid, I repeatedly heard the expression – “Brazil is the country of the future.”
So when I started working in digital marketing close to 20 years ago (how time flies!), the expectation was that the Internet would finally push Brazil into the future.
Well, it took a long time – longer than I expected, for sure – but the digital space has lived up to its promises. Aside from all of the chronic structural problems of this country (don’t even get me started), we actually have been able to make a profound shift. And it’s only the beginning.
Brazil has officially entered into the programmatic era – artificial intelligence and big data are transforming everything, from how we think and do business, to the way we interact with each other.
Marketing is undergoing an incredible change itself. Through real-time systems and algorithms automating the delivery of targeted and relevant experiences to consumers, our marketing efforts are becoming even more efficient.
A Brave New Brazil
Brazil signed on to the digital world and a second wave of tech companies disembarked into the Land of Samba. You could almost compare it to the dot-com boom back in 2000 (if it wasn’t for the fact that we actually had business going on this time – you know, cash changing hands, trade of goods and services, blessed commerce, etc.).
We currently have a gold rush in Brazil, and one of the most enticing fields is programmatic media buying. The promise of yearly double-digit growth rates has led many Demand Side Platforms (DSPs) to open their operations in Brazil, and we have experienced a rapid influx of tech vendors since then.
One doesn’t need to be a genius to predict what’s next in this industry within Brazil: a big consolidation wave.
as in the US, we will soon see several digital companies merging or being acquired (and some just disappearing altogether). And what is going to lead this consolidation wave – besides the gain of market share and competitiveness – is the dire need for integration within the digital market. There are too many companies that are siloed in their own vertical, creating a highly fragmented landscape.
It’s inevitable that agencies and tech companies will work together. Agencies have always dominated media buying in Brazil and created a vicious pricing structure, where a huge part of their revenue is paid by the big vehicles, in the form of rebates, bonus on volume, etc. In times of algorithms making the buying decisions (in substitution of the old manual media plan), agencies are seeing programmatic as a threat to their wallets. Agencies will need to take advantage of programmatic to continue dominating and ad tech companies won’t survive without partnering with agencies.
Therefore, both parties must partner to create a new pricing structure for media buying. This is an important step for us to see programmatic really flourish in Brazil.
Et voilà: Programmatic Brazil…
Yes, we seem to be getting to our dreamed future, and ad tech is leading the way, slowly changing the archaic digital structures. However, we still need to fix a few things for our plan to work. Brazil is indeed a very singular market – think of a mix of digital, samba, cachaça and the best soccer in the world.
Viva the Programmatic Brazil!