Latin American organizations are increasingly investing in digital marketing practices, and with the ubiquitous use of mobile devices, social networks have emerged as the key to developing digital marketing strategies. Indeed, 94% of the companies surveyed in a study conducted by MIT Technology Review and NTT Data in the region believe the same.
The digitalization boom has made digital marketing an essential part of any strategy that seeks to improve brand positioning, reduce costs, and increase profitability for Latin American companies. Investment is another crucial element in the growth of digital marketing: According to the statistics portal Statista, investment in digital marketing in the region reached US$ 11,000 million and is expected to exceed US$ 15,600 million by 2024.
Indeed, 10% of the companies surveyed that claim to have increased their investment in digital marketing in the last year allocate more than 60% of the marketing department's investment to digital marketing, a figure expected to exceed 85% in the future. There is no doubt that investment is growing: 28% of the organizations surveyed stated spending between 1 and 10% of their annual investment in digital marketing initiatives, and 70% said they had increased their investment in the last year.
Although the Latin American region is improving its digital marketing practices and adapting to consumer reality, the constant market evolution requires organizations to remain to leverage its benefits and respond to an ever-changing market. For 48% of organizations, the main objective is the conversion or acquisition of customers, with short-term profitability in mind. In second place, with 20%, organizations focus on customer loyalty and retention, strengthening the relationship and consolidating it in the long term. The third goal is to improve brand awareness (17%); they want their brand to be recognized.
This scenario, of course, has its challenges. One of the main challenges remains omnichannel: only 10% of the companies surveyed placed customers at the heart of their business by combining online and offline channel strategies, disappointing 78% of customers who expect to have an omnichannel shopping experience, aligned with digital and physical channels and, if possible, automated. For this, companies must adapt to changes in the marketing industry and invest heavily in integration and a unified customer vision providing a unique value offer.
Another major challenge is to connect the collected data from the different platforms to enhance their use in digital marketing campaigns. Data is crucial, so it is essential not only to collect it but to make intelligent use of it and its potential to influence decision-making. While 86% of customers are willing to share data in exchange for compensation, this is a significant challenge for companies to comply with privacy and data protection regulations.
On the other hand, the capacity to be agile and flexible to generate profitability in the strategy is crucial. In an ever-changing business ecosystem that demands dynamism and readiness, agility remains an ongoing challenge for many companies in Latin America and an essential capability. Adopting agile marketing processes fulfills marketing managers' desire to make their strategies faster and more responsive, giving companies benefits in reducing time-to-market and improving prioritization, productivity, analytics, and evaluation capabilities.
These challenges, which must be addressed to improve digital marketing practices, involve a set of trends leading organizations in an increasingly digital marketplace. Space computing, for example, is one such trend. The new devices launched by technology giants such as Apple and Meta allow extending reality by creating new services and immersive and interactive content for customers.
TikTok, the fastest-growing digital media network, emerges as an opportunity for brands to strengthen their relationship with their audience, taking advantage of its algorithm and features, which differentiate it from other social networks. Also, thanks to new technological tools, it is possible to create personalized experiences for each customer, allowing new interaction methods to improve the user experience, which leads to increased customer conversion and retention rates.
Finally, Generative Artificial Intelligence (GenAI) is the fastest-growing technology today. Still in the early stages, but it already demonstrates enormous disruptive potential with significant implications for the digital marketing industry, primarily in content production, customized and adapted to each individual, bringing us closer to the promise of hyper-personalization.