Are Cell Phones The Key To Reaching Latin American Consumers?

I am back from beautiful Cartagena, Colombia where the ESOMAR Latin American 2010 conference was held. In addition, last week, I met with media and advertising professionals focusing on the Latin American market in Miami at the annual Portada Panregional Advertising and Media Summit. At both conferences, a consistent theme resonated throughout all the talks — the Internet is a powerful vehicle for Latin American consumers to connect with peers and even companies; however, the digital divide still persists in Latin America.

We find that, on average, 56% of metropolitan consumers in Brazil and Mexico are not online. Therefore, companies are still unable to reach a significant number of consumers through social media tools. Does that mean that if you have identified that the majority of your target audience is not connected that you are on the sidelines and unable to harness the “power” of social media? I think the answer is no.

Companies with a presence in Latin America need to incorporate cell phones into their media allocation mix. With more than 75% of metropolitan Brazilians and Mexicans owning a cell phone, there is huge potential to connect with the majority of one’s target audience. However, the challenge lies in finding the right applications and tools that are a fit for this market. Only 5% of mobile phone owners in Latin America go on the mobile Internet at least monthly or more, and only 8% of them own a smarpthone. If your tool is sophisticated and/or requires the Internet, you will still hit only a small part of the market. I’ve come across one company so far that can help marketers overcome this challenge: Bubble Motion. The company offers a voice-based Twitter-like service called Bubbly,and it works on all types of cell phones. In a market that we know is interested in social, Bubbly is an innovative way to harness the power of social media through a device that most consumers have. And, it isn’t limited by the uptake of the mobile Internet.

Even though the digital divide does exist and will remain a significant barrier for some time, cell phones are an integral part of a Latin American’s life and can be a platform that companies can successfully use to connect with their target audience. I would love to hear your thoughts on how critical a role you think cell phones play in Latin America. Are there other options out there that provide similarly compelling solutions?

Comments

smart phone use in Latin America

Smart phone use will be extremely critical for companies wanting to reach consumers in Latin America. The user interface is evolving, but things like augmented reality (when it matures more) will be key in making the Internet "more real" to many users down here. The time horizon is probably 3 years, but this will be an important shift in usage patterns (mcommerce will evolve, also).
A few years ago, nobody would have predicted that so much of the population (e.g., street cleaners, taxi drivers, etc.) would use a cellphone. A unique and interesting thing has happened in that these users are starting to see the cellphone as a status symbol which is much more within their grasp than a luxury car or house.
The biggest obstacle to this scenario accelerating even more is the lack of good local content (yelp, foursquare, etc. with enough latam businesses, etc.).

RE: Smartphone use in Latin America

Alan,

Thank you for your comment. Yes, I agree that smartphones will be a critical component for companies to connect with their target audience. For companies to succeed, they will need to incorporate a mobile strategy into their mix and not solely focus on the Internet. However, companies need to be mindful that a main factor for the increase in mobile adoption is due to the success of pre-paid plans. Smartphones are still extremely expensive for the majority of Latin Americans as well as data access plans. Therefore a mobile strategy needs to work on all types of mobile phones so that the reach is not limited to a core set of consumers. The next 3 to 5 years will be very interesting to see how the market shifts and how companies respond.

Roxana

Cell Phones

Cell phones are already playing a significant role in reaching very mobile hard to reach 18-24 year olds in the US.

Stands to reason cell phones will be key in reaching people without landlines or internet connection. Cell phones will become critical part of sampling plans in market research.
Marcus Turner
http://www.rddfs.com/

RE: Cell Phones

Marcus,

Thank you for your comment. Yes, I definitely agree that incorporating mobile phones into market research sampling plans for Latin America will be critical over the next few years. We currently use a face-to-face methodology with our offline data collection to ensure that we are reaching all consumers irrespective of what technology they own. However, if face-to-face methodology is not an option, mixed methodology will need to be incorporated where the mobile phone will be a critical component to ensure a representative sample of consumers are reached. Now the question is how can we execute a similar survey across different methods - especially over the mobile phone - without affecting data quality. A very hot topic being addressed currently in the MR world.

Roxana