Advertisers want to promote their products using digital media, and agencies have registered an increase in these services.
Staying at home due to the 2020 pandemic resulted in e-commerce growth skyrocketing along with an increase in internet advertising.
According to the 15th Study on Online Advertising Investment in Mexico (2021), 69% of Mexican SMEs have used their official Facebook page to promote their products, 54% have paid for social media platform advertising, 48% have used their official Instagram page, and 38% have used WhatsApp.
Last year, electronic commerce registered growth of 81%, reaching 316 billion pesos. Daniel Saavedra, Marketing & Business Intelligence manager at IAB Mexico, an organization representing the digital advertising and interactive marketing industry worldwide, said this represented 9% of retail sales made in Mexico.
“Many people probably weren’t in the habit of buying online, but the pandemic changed that,” he explained during a presentation of the 15th Study on Online Advertising Investment in Mexico (2021).
Saavedra mentioned that there was a clear increase in the purchase of ads shown on digital channels, meaning that the investment in traditional advertising has gone down and that there has been a gradual migration.
In a survey of 46 advertisers on digital advertising, 6 out of 10 participants said they had decreased their overall investment in ads while 2 out of 10 had increased their investment in ads because they saw a very specific opportunity in the context of the pandemic.
The internet also has a broader reach now. More and more people in rural and urban areas now have access to the internet through different devices, and this increases market possibilities. In 2019, it was 67%. By 2020, that had risen to 70% nationally.
Alexia Moreno, Marketing & Business Intelligence coordinator at IAB Mexico, added that, according to a survey of 22 participants in the sector, investment in digital advertising increased by 2.25% in 2020 compared to 2019.
“79% of advertising investment was focused on display advertising, with $32.353 billion pesos spent in 2020 compared to $32.017 billion in 2019. This remained similar to previous years. In terms of formats, video retained 58% of market share, while the second most used format included banner ads, rich media, and social ads. Other formats such as digital audio, sponsorships, and influencers are also growing, but to a lesser extent.”
There is an optimistic outlook regarding the increase in investment into internet-focused advertising, despite the fact that the new Transparency in Advertising Contracting Law is expected to be approved in the coming months.
There are still some doubts regarding the law’s content and adaptations that will need to be made, coupled with the reconfiguration of audiences as a result of the removal of third-party cookies, explained Moreno.
The digital services section, in which 39 communications, marketing, and advertising agencies participated, highlighted that media management, creativity and strategy, social media, content production, and web design and development services were the five areas with the highest demand.
“The results of the study show that we saw stability in 2020 based on billing for digital services, both for agencies (which grew by 1%) and for publishers (which grew by 4%),” explained Daniel Saavedra.
While the growth is modest, the trend for the next few years is for more creativity and strategy-related services to be sold.
Among the dominant marketing schemes in the inventories of advertising agencies, cost per click is ranked first in 2020, at 19%, followed by cost per lead at 15%, and cost per action at 14%.
Meanwhile, content production dominates at almost 50% among publishers, followed by creativity and strategy and social media. These are often offered as part of media management packages.
The participants agreed that the sector faces many challenges: perhaps the most important ones are joining the digital transformation, communicating with much more specific brand marketing, as well as continuing to sell, the implementation of new technologies, and a growing need for data analysis to measure results and provide greater control.
The Marketing & Business Intelligence manager of IAB Mexico added that “there’s a clear trend toward the growth of new technologies. Advertisers are developing in-house teams and are professionalizing their digital areas. It’s important for agencies to go further and build strategic value and assist advertisers through this digital transformation.”