Is there a need for a U.S. Hispanic – Latin American Online Ad-Exchange?

An online ad network and an online ad-exchange are not the same thing. An ad network is a third party that websites partner with to serve ads on their site in return for part of the revenue generated. An advertising exchange, e.g. Yahoo’s Right Media, is a marketplace that attempts to optimally match publishers' available inventory with advertisers' desired campaigns. In many cases, some of the buyers include ad networks.

While there are many U.S. Hispanic and Latin American online ad-networks, until recently there was not a single Latin American–specific ad-exchange. Last winter, Miami-based U.S. Media Consulting started Jumba Ad Exchange with the objective to bring more transparency, accountability and efficiency to the process, according to Jumba partner Ignacio Roizman: “This is largely an industry plagued with dubious ad networks with low quality inventories, running campaigns only as blind channels where advertisers do not have control on where their ads appear.” According to Roizman, “Most of the publishers in Latin America have a tremendous need to monetize traffic. wAt the same time, they need to keep their brand at reasonable distance from adware campaigns, multilevel marketing, and most of the CPA/Affiliate-based programs available today.”

This is what other industry players had to say about the need for a Latin American-U.S. Hispanic advertising exchange:

Paul Meyer, VP Digital Media at Publicitas “I do think that it would be very beneficial for our space, but it will be a few years before the Latin American and US Hispanic market's media buyers fully embrace it. There is currently a lot of hype in the total market, but the acceptance has been very tepid. Ad Exchanges have a problem with transparency of publisher's names, technological limitations and a lack of understanding from the industry. But once the market matures, it will be a sizeable revenue source for the publishers and a great marketing tool for advertisers.”

Alicia Morga, CEO of Consorte Media: Our understanding of Ad Exchanges is that they are most focused on trade efficiency which tends to mean self-service and this often translates into remnant inventory and very low CPMs. There is definitely a place for exchanges in the Hispanic/Lat Am market, although we're not focused on this.  But anything that addresses this hugely underserved market is a very good thing.”

Danny Allen, president of AdMixture: “That’s an interesting idea.  I think it might work in Latin America.  In the US, I don’t think there’s the volume, at least not yet.  The important thing for any exchange is liquidity.  That liquidity is provided when you have a large volume of buyers and sellers.  You need both to get an exchange going, and you won’t get one without the other.  It’s a real chicken and egg problem.  In the US Hispanic market today, I don’t think there’s the volume on either side to support an exchange.

The other thing an efficient exchange needs is good information.  It does you no good to buy Hispanic ad impressions on an exchange if you don’t know anything about the site you’re buying on.  Right now the Hispanic market is not developed enough that people know anything about the websites that are out there.  Hispanic media buyers still need the educated and experienced service provided by Admixture and some of our competitors to help them understand what’s out there besides Univision.com, Terra, and Batanga.”

Margot Bradley, COO of Hola Networks: “No not particularly. US Hispanic and Latin America are two very distinct markets with very different cultures. Most clients have separate departments and budgets for each.”

Related Article: 

Online Consumer Behavior Front and Center at Day 1 of Ad-Tech Miami (June, ’08)


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