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The Programmatic Globe: Mexico

Sociomantic's Head of Global Advisory Services goes deep on the state of programmatic and e-commerce in one of Latin America's leading markets


Here at Sociomantic, we’re lucky enough to get to work with marketers in over 70 markets, helping them from our 22 offices around the globe to take advantage of the many benefits of programmatic advertising technology powered by local market expertise.

In working across these diverse regions, one thing has become crystal clear: when it comes to e-commerce and programmatic marketing, no two countries are alike. And no one has a better view on the differences and eccentricities of these different markets than our VP Global Advisory Services, Lothar Krause.

That’s why we’ve invited him, with support from each of our local teams, to share unique, market-specific insights about the ins-and-outs, the ups-and-downs, the triumphs and challenges of programmatic advertising in each of the countries or regions that we are stationed. Next up: Mexico!

When we talk about Latin America—LATAM—it’s common to think only about the Spanish-speaking countries, although we all see Brazil as part of the region in the maps. Developing the entire LATAM region is one of our strategies, which is why we have a team to cover both the Portuguese and the Spanish speaking markets.

Mexico, Colombia, Chile, Argentina…the list is big (more than 20 territories), and the countries really differ from each other in terms of food, culture and language, for example. Right after Brazil, Mexico has the largest numbers when we think about digital advertising and e-commerce, which is why we’ve chosen to feature it next in our series.

Mobile Leadership

Mexico is often placed as the leader in Latin America when it comes to mobile usage. In addition, 30 percent of internet users in Mexico own a tablet (2014)—the highest percentage of any country in the region. This scenario is helped by government efforts to expand the number of mobile providers and create lower-cost plans.

In 2014, the total ad spend in mobile platforms represented 30 percent of the total investments in online advertising, a growth of 113 percent compared to the previous year. In 2015, this number was expected to be $391.4 million (5.21 billion pesos), making up 32.6 percent of the year’s total digital ad spending. According to eMarketer, mobile’s share of digital ad spending will be above Latin America’s average through 2019, quadrupling in value to approximately $1.70 billion and rising to more than two-thirds of Mexico’s digital ad spending.

Mobile content aggregators were the leading industry for the share of mobile display ad spending in 2014 (47 percent), with telecom next at 22 percent. Even though they do spend a lot on digital advertising in general, consumer packaged goods and retailers are still conservative when it comes to mobile investment.

Still, brands in Mexico are now learning how to reach these customers in every touch point and are starting to explore more ways to reach them on mobile.

Unique Payment Types

Mexican online payments are dominated by local payment methods, while online purchases can be paid with both online and offline methods. As with boletos in Brazil, buyers in Mexico can purchase online and choose to pay offline with cash-on-delivery services such as Oxxo, a payment service that can be found in pharmacies, 7-eleven and other convenience stores. These payment points are the preferred method for 44 percent of Mexican digital buyers.

And there are also the online methods: credit card, debit card, PayPal, bank transfer, MercadoPago (from the marketplace MercadoLibre), Safety Pay. Yet, even with all these options, Mexicans are still concerned with payment types and possible issues, with 51 percent of digital buyers admitting to having abandoned a cart because their preferred payment method was not present.

According to a research conducted by AMIPC (Associación Mexicana de Internet) and comScore, in 2015, credit cards are the preferred payment method by 52 percent of the digital buyers purchasing via smartphones. The same research found that 23 percent of them prefer an offline payment method, even buying with a smartphone. As we can see, even with credit cards being massively preferred, cash on delivery (COD) and other offline payment methods remain essential in this market.

Buying from all over the world

One of the advantages of online purchases is the ability to buy from different countries and have the package delivered home. It seems that Mexican consumers take this advantage quite seriously!

According to comScore, six of the top ten retail sites visited in Mexico in Q1 2015 were US-based, while China’s Alibaba ranked eighth. Mexican consumers make 39 percent of their purchases on foreign websites, with 26 percent of them in US-based websites—the highest number for foreign purchases of any market worldwide.

It’s well known in the market that Mexicans have a strong affinity for US brands, and that’s one of the reasons why they often buy from American online stores. As to why, 80 percent of online buyers say they get lower prices and 71 percent buy from abroad because of attractive promotions. And what, exactly, do they buy? The list varies: from clothing and accessories, to footwear, to books, CDs, DVDs, videogames and many other things—even cars!—are bought from abroad.

So what can retailers learn from this? The combination of an appealing offer, great service, preferred terms of payment, competitive pricing and a broader range of products can be the key to earning sales from Mexican customers for a foreign website—or for keeping sales inside the country for a Mexican e-shop!

From a Local

Our Commercial Director LATAM, Moritz Wolff, has worked across the region, and his work with Mexican e-commerce stores specifically has revealed many specifics of the market:

“Programmatic advertising is setting a path for success in the region, but there is a lot of work to be done and each market is very different. To ensure that all dots are connected, it’s important to have a strong knowledge of the digital advertising ecosystem int he market and especially to understand the specifics of typical customer behaviors in those markets. In Mexico, as the market is still quite young and programmatic is just now starting to take off, companies have a great opportunity to start with the right attribution model from the very beginning—looking not only at last-click sales but across the entire customer journey.

Want to learn more about using programmatic display to drive sales growth and in LATAM? Be sure to reach out to our LATAM team or sign up for our LATAM Spanish newsletter to get the latest market news delivered to your inbox.

Check out previous posts in the Programmatic Globe Series:

  1. United Kingdom
  2. France
  3. Turkey
  4. United States
  5. India
  6. Russia
  7. Brazil
  8. Germany
  9. Poland & CEE
  10. Benelux
  11. Spain