Ad-ding up

Strong advertising growth in LatAm looks unlikely to be repeated in 2023.

The advertising market in Latin America will close 2022 with 11% growth, with total advertising spend in the region reaching USD 22 billion according to IPG Mediabrands, a global media agency. Chile will register the highest growth, 15%; followed by Peru, 13%; and Colombia, 13%.

An advertising executive in Colombia commented, “2022 has been a year of good growth: budgets have grown and advertisers’ investment has grown, allowing creative agencies and media agencies to grow too, often with high levels of recruitment. The outlook for 2023 is less encouraging as many people are fearing a recession. Competition is also fierce – in digital advertising you are fighting for a tenth of a second of user attention!”

“2022 has been a year of good growth: budgets have grown and advertisers’ investment has grown, allowing creative agencies and media agencies to grow too.”

Advertising executive, Colombia

In such a competitive sector, Loup is one of the leading agencies in Chile. In Peru, DataTrust is the main reference for digital marketing, and Paxzu, in Colombia, is reputed for its multidisciplinary approach and network throughout the broader region. The common denominator of these agencies is the young talent thriving in the advertising and marketing sectors in the region, which offer an unmatched knowledge of new trends and local preferences.

The Colombian executive continued, “At the moment, data analysis and digital strategies are very important for companies, so agencies have focused on recruiting young talent in these areas to provide more and better solutions for their clients. Latin America has a particular strength in digital advertising and the region has been exporting talent to North America and Europe.”

“Latin America has a particular strength in digital advertising and the region has been exporting talent to North America and Europe.”

Advertising executive, Colombia

Latin America is facing a generational change which has seen a boom in digital advertising and retail e-commerce leading to companies trying to adapt to consumer’s omnichannel behaviours.

“Over the past few years, advertisers have changed the way they work,” explained a chief marketing officer for a retail brand, “previously large companies would use one agency to deliver their entire strategy. Today, even small companies use teams of agencies that are being forced to work together. Also, multi-national advertisers are also now taking a more regional approach which has benefited the Latin American advertising industry enormously.”

“Multi-national advertisers are also now taking a more regional approach which has benefited the Latin American advertising industry enormously.”

Chief marketing officer, retail brand, Mexico

The continued high growth of retail media advertising and digital marketing in the region led to the closure of notable deals, such as McKinsey’s acquisition of LOBO, a leading digital commerce agency in Buenos Aires, to double the size of its digital commerce operations in the Americas. In September, WPP plc. acquired JeffreyGroup, a US independent corporate communications and public affairs company, with offices in Mexico City, Brasilia, Rio de Janeiro, São Paulo, and Buenos Aires. The company, with clients which included Amazon, Bayer, Marriott International and TikTok among others, will join WPP’s Hill+Knowlton Strategies network in one of the main moves in the Americas in 2022.

“Beyond M&A,” the advertising executive commented, looking to the future, “we see a need for agencies to look for new platforms and new business models to reach the new consumer that is out there. Some people are dismissive but we are starting to see some interesting projects in the Metaverse using new technology and predictive analytics.”

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