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Search, The South American Way

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With over 80 million Internet users, Latin America offers attractive opportunities for search marketers who take time to understand its unique search landscape.

A special report from the Search Engine Strategies Latino conference, July 10-11, 2006, Miami, Florida.

With such a significant market, Latin America has finally landed its own Search Engine Strategies Show. Danny Sullivan moderated a veritable all-star line up at the SES Latino session "Search Landscape: Latin America."

The Big Three

If there is one thing Gonzalo Alonso is sure of, it is that search engine marketing is poised for growth in Latin America. As General Manager of Google Mexico, he asserts this belief in a fashion that leaves no room for doubt: "We will get there." Alonso expects the total Internet advertising to grow from $111 million to $337 million over the next few years.

His presentation, like many others, is reminiscent of early search evangelists' in the United States. Hard data points were balanced with case studies, such as that of Corpo Perfeito. One of the first AdWords clients in Latin America, Corpo Perfeito personally thanked Google in yes, a Google Video, for increasing business 50%.

If Alonso is Latin America's search engine marketing's cheerleader, Yahoo is its coach. It is Guiherme Ribenboim's job to educate and proselytize advertisers and their agencies, which the firm has deftly segmented according to varying levels of sophistication. Yahoo proudly notes that it has over 500 million keywords appearing in its Latin American network and that its most successful advertisers run between 1 and 50,000 keywords. Ribenboim also reminded the audience that his firm has recently merged with Telemundo, the Spanish-language broadcast powerhouse.

Finally, Maria Teresa Arnal represented Prodigy/MSN, which is undoubtedly in an awkward position. Given that the software giant only recently launched its U.S. AdCenter platform for search, the MSN-Yahoo relationship still endures in Mexico.

To compensate, Arnal focused on the fact that "the game is just beginning" and shared colorful online data that clearly outline unique attributes of her audience. For example, keyword queries in Mexico tend to be single words, and the peak time is 10am to 4pm, suggestive of the importance of workplace access to the web. This point is reiterated by the fact that search queries drop 50% on weekends. Ending on a hopeful point, MSN does aim to launch AdCenter for Spanish-speaking markets in 2007.

Market Challenges

A few years ago, the U.S. based search engine marketer spent much of his time demonstrating that search influences both online and offline purchases. In Latin America, this is even more so the case, as, ecommerce is hindered by three forces:

1) Many consumers don't have easy access to credit cards
2) Broadband penetration is in the early stages of growth
3) The postal and shipping infrastructure can be somewhat unreliable.

Acknowledging these issues early on, the panel pointed immediately to how search influences offline purchases. For Alonso, this became reality when he came home to find a print out of a refrigerator on his bed marked "buy this." Apparently his wife had spent the week searching online for a new appliance before coming to her decision and ultimately having her husband make the purchase offline. This says just as much about search as it does about the cultural nuances of decision making power in the Latin American home.

Erika Schmidt of iProspect reiterated the broadband point as she walked through data points and her firm's experience with international clients. She then shifted to search engine market share, clearly noting that the region favors Google. It should be noted that while Spanish and Portuguese are the dominating languages for obvious reasons, there are definitely English language searches abroad.

The Future to Come

Marcelo Sant'Iago, president of the IAB Brazil, closed out the session with a numbers-packed presentation. Not only does Brazil have over 30 million online users, but they are spending 17 hours a month online. 40% have broadband, and due to a unique local offering, 95% submit their tax forms online. This clearly makes Brazil an outlier among emerging markets.

Sant'Iago points out that search makes up 15-20% of online media, not too far of the U.S. rule of thumb. And while the retailers lead in paid search, big brand marketers are now coming to the table. Just as with the U.S. a few years ago, keyword prices are lower, and so inventory is wide open.

For these reasons, it is clear why engines have invested heavily in this show. Its audience is clearly the face of the future as the engines cross boarders in pursuit of continued growth.

Sara Holoubek is a free agent consultant for the interactive advertising sector and its investors. She can be reached at [email protected]

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