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Eric Tourtel

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Ad_BlockingAlmost $22 billion in global ad revenues have been blocked so far this year, representing about 14% of all global ad budgets, according to a study by Anti Ad-blocking firm PageFair. Outstream Video Advertising Firm Teads, recently published a manifesto for sustainable advertising attempting to unite the advertising and marketing industries to engage (not enrage) consumers. What is the state of Ad-Blocking in Latin America and what is being done against it?

1. How extended is Ad-Blocking in Latin America?

LatAmA recent report found that about 16% of users in the U.S. block ads. Globally, there are nearly 200 million people stopping ads, 181 million of whom are on the desktop.  These are obviously facts to worry about . But  how extended is ad-blocking in Latin America? According to Eric Tourtel, ‎Senior Vice President, Latin America at Teads.tv, “Although research on ad blockers is still limited we do know that 4 countries in Latin America fall into the top 30 countries in the world with ad blockers for video. Colombia is at #20 with 28% of video time ad blocked. Chile and Mexico come in right before the U.S. with 26% ad blocked video time and Argentina and Ecuador both count with 23%. These numbers are alarming because they pertain to desktop alone, now factoring the mobile ad blockers on iOS and Android, the number could easily double. With a high adoption of ad blockers, advertisers and publishers are both at risk. The time is now to raise mass awareness and come together to seek better alternatives that sustain brands, publishers and users alike, before ad blockers become the standard.”

Four countries in Latin America fall into the top 30 countries in the world with ad blockers for video: Colombia, Chile, Mexico and Argentina.

2. Is Ad-Blocking higher on mobile than on desktop?

Yes, ad block adoption in general is definitely higher on desktop right now. The above referred study by anti-ad blocking firm PageFair in partnership with Adobe found that “mobile ad blocking is still very underdeveloped,” a situation that may change following Apple’s recent support for ad blockers in iOS 9.”When you think of Ad blocking your first thought is desktop. Latin America is mobile-centric, the communication dynamic between a brand and consumer vastly differs compared to the United States or any other market, making it difficult to draw a parallel between each of them,” says Mike Villalobos, Head of U.S. Multicultural and Latin American Sales at Virool.

When you think of Ad blocking your first thought is desktop. Latin America is mobile-centric.

3. How will Latin America’s rapid adoption of smartphones impact ad-blocking in the region?

Photo: Esther Vargas. CC Licence.
Photo: Esther Vargas. CC Licence.

The rapid adoption of smartphones in LatAm may have increase the use of ad-blocking technologies in the region.  As Teads’ Tourtel notes “following Apple’s recent announcement allowing ad blockers on Safari, a slew of ad blocking apps are expected to make their debuts in the market which will likely boost ad blocker adoption on mobile as a whole. Latin America specifically is one of the fastest growing regions for smartphone adoption. eMarketer predicts the region will have around 220 million smartphone users in the region within the next 3 years up from the current 150 million users this year. As mobile becomes the primary screen for internet usage, we may see a shift in ad block adoption from primarily desktop to more mobile.”
Key drivers for users to block ads include the quantity and quality of ads and, in mobile, the extra load time, and the resulting hits on battery life and bandwidth charges.

4. Are Latin Americans aware about the role of advertising revenues in supporting media?

advertising.megafono-285x346One key issue that audiences who use ad-blockers need to know is that if the content is not subsidized by advertising it will have to be bought by the end-consumer, in other words the audiences themselves, in order to make it economically viable. However, many consumers underestimate the role of advertising in supporting media. A Teads study mentions that 68% of consumers underestimate the role of advertising in supporting media properties. Is this figure also valid for Latin America? According to Eric Tourtel, “this number can be applied generally for any region. At Teads we are pushing globally for the education of consumers about the value of advertising because many don’t realize that advertising funds the online content and services they love and use daily. Considering 4 Latin American countries are amongst the top ad blockers users in the world, this number could potentially increase.”
Latin America, with its huge lower and lower-middle classes, has traditionally been a region with a very large amount of the media landscape being supported by advertising revenues. Open TV networks have an ad market share that is higher than 50% in many Latin American countries.

5. What type of advertising can be blocked which one cannot be blocked?.

“The ads that can and can’t be blocked depend on the ad blocker application itself but these third-party software companies have the capabilities to allow users to block all kinds of ads from banners to video ads. One of the key factors in ad block adoption is the use of intrusive advertising like pop-ups, overlays and pre-roll video,” says Eric Tourtel
from Teads. “The latest software is even blocking paid social and paid search ads!.”

 

6. When buying video programmatically is there a way to take out the audience that blocks the ads?

Man finger pushing interface use of innovative technologiesAccording to Tourtel, “When buying ads, there is no way to know which user has ad blockers set up or not. This is a big risk for advertisers as they are paying more for impressions without guaranteed views. Some publishers such as The Washington Post are asking users to subscribe to content in an effort to combat lost revenues from ad blockers. Others like The New York Times do not allow users to view content if they have ad blockers enabled. There are anti-ad blocking companies that try to come up with new software to reverse the ad block.”

The New York Times does not allow users to view content if they have ad blockers enabled.

7. What technologies are there to distribute advertising more effectively?

Seamless ads that are designed to enhance online media are the industry’s best defense against the proliferation of ad blockers. According to Virool’s Villalobos, “advertisers can overcome ad-blockers if the content is authentically created, has relevant messaging and efficiently distributed through appropriate mediums.”Tead’s Tourtel agrees “as an industry, we need to adopt less intrusive ad formats such as outstream formats like Teads’ inRead, to slow the use of ad blockers. Native advertising of this kind is less intrusive and more accepted by the user.”
A technology that allows a more seamless and non-intrusive integration of ads into the user experience are outstream video ads,
a category generally described as ads that run within text dominant Web pages or streamed within copy on mobile phones. Ad-Tech firms Teads and Virool have outstream video ads, and Yume recently unveiled outstream ads  as well.

Says Mike Villalobos, “Virool alleviates ad blocking concerns by strategically distributing content, in a manner that is organic to the audience on the receiving end. The best example is Virool’s Inline/ unit that is compatible on both mobile and desktop. Virool also run sub-campaigns before, during, or after distribution to quantify authentic emotional engagement through facial a viewers facial reaction, the tool is called eIQ. With these innovative tools we provide are able to facilitate a solution, and an experience that will improve the overall creative and campaign delivery.”

CHECK OUT: Online Video in Latin America: What 6 Experts Have to Say
Will Online Video Take Money Out of the Huge LatAm TV budgets?

Will mostly U.S. based Online Video and Advertising Technology providers really be able to deliver the goods when it comes to the Latin American Online Video Market? What are the main challenges ahead? In order to find out more about the evolution of Online Video in LatAm, we asked major experts what online video formats they see growing the most in 2015. Below, their answers.

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Jorg Nowak, Head of Latin America, YuMe

“Video Advertising has arrived in Latin America and is certainly nothing new. At YuMe, our IAB and MMA Award winning ad units such as “Ngage” and others transform the traditional 30 second TV Spot/Pre-roll into an experience that engages the audience and create the brand recognition advertisers are asking for”.

The enormous opportunities presented by the Latin American and U.S. Hispanic online video landscape will be examined in-depth by major experts of the brand marketing, agency, media and measurement world at Portada’s Latin Online Video Forum on June 3 in Miami (part of #Portadalat.) Check out the evolving agenda and register!

Chris Stanley, CEO, Alcance Media

38859b2“Overall, I expect video to continue its strong growth as more advertisers see the benefits. As for the formats, pre-roll will be number one, but as more offerings become available in mobile pre-roll this should see strong growth as well”.

Mike Downs ‎VP, Hispanic & LatAm at TubeMogul

“Pre-Roll is the format growing most consistently, with the majority of that growth driven by mobile devices, and we believe that both will continue to develop in 2015. We work with advertisers looking for innovative solutions to deliver brand messages and will continue to do what’s best for them”.

Eric Tourtel, SVP and General Manager Latin American, Teads

iWl5-mjI_400x400“Pre-roll within a quality environment will not grow, quite simply because there are not any more inventories available (producing video content is expensive hence why there is not too much availability and it tends to be sold out immediately). Pre-roll within user-generated content may grow if advertisers prefer price over quality. Hope for users and advertisers mid-rolls and post rolls will not grow either since that would have a negative impact on the way people perceive brands (no one likes to be forced to see an ad while consuming video content).
I am convinced, thanks in part to our conversations with many brands and agencies, that Outstream formats will grow, and that inRead will soon be a commoditized format. Finally, 2015 will be the year of mobile! According to eMarketer, Latin America is the second fastest growing region for mobile phone internet user growth, ranked 2nd worldwide behind Central & Eastern Europe. eMarketer predicts Latin America will have 322 Million Mobile Phone internet users by 2018, a jump of 194M from 2014 (a 65%+ increase in 4 years alone).

In Mexico 94.7% of the mobile traffic goes through Wi-Fi

Research firm eMarketer expects  a very high growth rate of  mobile internet ad spending in Latin America, growing to US$2.24 billion  by 2018 from US$334 million  in 2014. One very important point to consider is that since the quality of mobile broadband’s is extremely low, people tend to use Wi-Fi on their devices all the time, to the direct detriment of the broadband quality available on mobile devices. For example, in Mexico 94.7% of the mobile traffic goes through Wi-Fi, which means we can deliver a lot of video on mobile. In our view the major growth in mobile formats will come from inRead and mobile-friendly formats”.

There will be a rapid increse in mobile internet ad spending, growing to US$2.24B by 2018 from US$334M during 2014

Manny Montilla Sales Director at Adap.tv

Manny_0165(1)“Although I think mobile video will grow tremendously in 2015, I think the more compelling growth to keep tabs on will be centered around publishers concentrating their efforts in generating more medium and large player inventory. The saturation of small player inventory and the increasing negative user experiences associated with them are making advertisers more and more prone to targeting away from small pre-roll inventory sources and concentrating their spends toward larger sized pre-roll sources”.

The opinions are manifold. As 2015 moves on, we should have a clear perspective on the format that best meets advertisers’ needs as well as users’ habits.

CHECK OUT:
10 things you need to know about the Latin American Online Video Advertising Market

Will Online Video Take Money Out of the Huge LatAm TV budgets?

The enormous opportunities presented by the Latin American and U.S. Hispanic online video landscape will be examined in-depth by major experts of the brand marketing, agency, media and measurement world at Portada’s Latin Online Video Forum on June 3 in Miami (part of #Portadalat.) Check out the evolving agenda and register!

The Latin America media and advertising markets are almost ruled by huge TV budgets. In this context, non-linear TV properties (e.g.  native digital properties as well as digital properties of magazines and newspapers ) have a tremendous opportunity to capture some of these TV advertising monies.

Lorena Hure contributed to this article.

GC_2008_400x400Guido Conterno, executive director at GDA, a consortium of major Latin American newspapers including Argentina’s La Nacion and Mexico’s El Mercurio,  says that  “newspaper and print based sites are rapidly incorporating video as a substitute of photos; once the processes are in place, and  robust webTV sites set, they will get a share of those investments.”

An important aspect that will greatly contribute to channel TV ad investment to the digital environment, is the technology provided by supply side platforms (SSPs).

2a39571According to Jorg Nowak, Head of Latin America at YuMe “This is certainly a global trend that is an important topic in LatAm as well.  Reason being is that clients request a faster turn around time to measure the ROI of the campaigns and that puts pressure on everyone in the campaign life cycle to work faster, as well as becoming even more detail oriented when it comes to categorizing the inventory by the various demographics. The latter can only be achieved by automating the process”.

An important aspect that will greatly contribute to deriving TV ad investment to the digital environment, is the technology provided by supply side platforms (SSPs).

However in Latin America, not so much in the U.S., it may take a while until traditional TV advertisers decide to transfer their budgets to digital video. For now, other experts tell Portada, most of the growth of online video comes from monies exiting display advertising (banner ads). Free TV ad and Pay-TV ad budgets, while much bigger budgets, are only threatened by online video in the medium and long terms.

066e2d4 As Carly Bellis, Co-Founder & CSO at Impaktu suggests: “I do not see this happening in the short-term, but it is possible that the shift will happen in the medium term, most likely via private marketplaces.  Right now the SSPs with inventory available in Latin America tend to have lower quality, non-local content at lower prices. From recent studies we also know there is a high incidence of fraudulent sites.  Local LatAm publishers with high quality, brand safe content do not want to lump in their content with the existing content and seemingly devalue their inventory.  The same is true in the U.S. with most premium publishers.  However, I do think that private marketplaces will be more readily adopted in the medium term, giving publishers more control over the buyers, the pricing and how their inventory is bought.”

Programmatic Video’s Latin American Infancy

Manny_0165(1)Manny Montilla, sales director at Adapt.tv (photos left), takes a similar position to Bellis: “I do see publishers adopting sell side platforms. However, I think it will happen in the medium term. Programmatic video is still largely in its infancy in Latin American markets. Right now there’s a lot of ‘toe dipping’ happening where publishers are brokering deals for their video inventory with a multitude of 3rd parties (mostly ad networks) who in-turn are trying to activate that inventory across programmatic partnerships and attract significant demand volume. As the comfort and education around transacting video increases and reasonable understanding is attained I think publishers (especially the larger ones) in Latin America will be losing out on major revenue if they don’t consider partnering with programmatic video solutions directly. The advantages of doing so are too compelling to ignore, especially as publishers establish their own private exchanges and start offering buyers more interesting slices of their inventory than would be available in a public market place.”

Major publishers in Latin America will be losing out on major revenue if they don’t consider partnering with programmatic video solutions directly.

What lies ahead?

The fact that implementing this technology would contribute greatly to deriving investment to the digital environment is confronted with the resistance publishers are confronted with.

iWl5-mjI_400x400As Eric Tourtel, General Manager for the Latin American market at Teads.tv (photo), says: “We also see some publishers that are a bit concerned about losing control of their inventory or their pricing, with some people incorrectly thinking that programmatic means ‘bought cheaply’ when in fact it means ‘bought automatically’. It is, however, simply a matter of training and sharing experiences”.

Programmatic does not mean ‘bought cheaply’ but ‘bought automatically’.

In short, even if everything shows TV ad investment will eventually be derived to the digital environment, there are a few challenges to be overcome first. So far, users are giving a positive sign to publishers with regards to their consumption habits; however, the implementation of the right technology to enable digital advertising in lieu of TV, might take some time.

The enormous opportunities and the evolution of the Latin American online video landscape will be examined in-depth by major experts of the brand marketing, agency, media and measurement world at Portada’s Latin Online Video Forum on June 3 in Miami (part of #Portadalat.)

CHECK OUT: 10 things you need to know about the Latin American Online Video Advertising Market

What: Video advertising technology company Ebuzzing has opened an office in Mexico to strengthen its presence and respond to demand in the region. Isela Abarca ,who has been appointed as Ebuzzing  Business Director, will run operations in the Mexico office.
Why it matters: Video advertising companies are expanding into the Latin American and U.S. Hispanic markets as these markets have an important catch-up potential compared to the U.S and Latin audiences over-index in online video consumption.

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Ebuzzing, the video advertising technology company, has opened an office in Mexico to strengthen its presence in LatAm due to the extraordinary demand in the region.

Additionally ,the company has launched its Hispanic network within the United States, which implements ip targeting, that allows to reach 20.8 million Hispanics living in the US and support LatAm publishers to earn revenue from US traffic.

Basically, ip targeting technology makes it possible to identify Spanish-speaking users within the United States and deliver them Spanish language campaigns.
 

Ebuzzing already has 15 offices globally including an office in Miami, which opened in September 2013 and acts as the hub for pan-regional campaigns and LatAm operations.

It has run over 150 campaigns across 20 countries including the US, Argentina, Mexico, Brazil, Chile, Peru, Puerto Rico,Panama, Colombia and Venezuela, exceeding targets by +50% last year. Consequently, the LatAm operations has quickly expanded in the last six months and based in Argentina and Mexico. LatAm campaigns are carried out independently by the LatAm team. The company has worked alongside global leading brands, including P&G, Samsung, Chanel,Puma and Citgo.

Operations in Mexico will be run by Isela Abarca, who joined Ebuzzing as Business Director from Impaktu earlier this month. With over six years of experience working in start-ups within the advertising industry, She has been appointed to oversee Ebuzzing’s growth in Mexico.

Eric Tourtel, General Manager LatAm explained: “Ebuzzing have been pioneers in video advertising since 2006. Our outstream format proposition is what made the company leader in Europe . I am confident we can achieve our ambitious expansion plan in the LATAM region. Opening an office in Mexico will allow us to provide our customers with the best service and enable us to significantly grow our publisher network.”

Isela Abarca commented: “I am very excited to have joined Ebuzzing, especially at such an interesting time for the company. My first focus is to develop a strong team whowill be similarly dedicated to our Mexico based clients.”