The Rise of Delivery Apps is at the Heart of the Mobile Advertising Boom in Brazil

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Kevin Ford

December 5th, 2019

Latin America is in the midst of a mobile advertising boom, driven by an explosion of delivery app usage across Brazil. While we are used to stories about world-leading programmatic advertising innovations coming from Silicon Valley, what is currently happening in cities like Sã Paulo shows how technology and creativity are playing their part in emerging markets too. 

August saw the reveal of a brand-new programmatic advertising campaign that’s been hailed for its creativity and boundary-breaking real-time bidding innovations. It wasn’t launched by one of the world’s tech superpowers, though, but by Brazilian firm Isobar Brazil.

The ad was a QR code appearing in the O Estado de São Paulo newspaper under the headline ‘Can you guess to which brand this ad belongs to? It all depends on where you are, and what time it is.’

Credit: Isobar Brazil

 

The ad’s innovation was behind the QR code. It offered personalized ads served to whoever scanned it based on their profile, geolocation and the time of day. They could be served ads from either McDonald’s, Burger King or Subway.

Isobar’s chief creative officer, Rui Branquinho, explained the revolutionary thinking behind the idea. “If an advertiser releases an offer at 8:30 AM and, within hours, realizes that it has been losing ground to more aggressive deals from the other brands, its offer can be adjusted to become more competitive.

“The second phase (and ‘evolution’) of this new product envisions that participating brands can come up with ‘more appealing’ offers, even if they are not the closest or most convenient ones to the reader.”

On its own, it’s a brilliant idea and a smart innovation in the programmatic space. It says much more than that though; this ad is a pointer not just to Brazil’s mobile advertising boom, and how the fast-food industry exemplifies its growth.

What does Brazil’s mobile market look like?

Brazilians are some of the most connected people in the world. More than two in three Brazilians have access to smartphones and the internet and are connected for more than nine hours a day – amongst some of the highest usage rates in the world.

While they love social media and streaming services such as Facebook, Instagram, YouTube, Netflix and others, Brazilians have become especially enamored with home delivery services, especially those providing food delivery.

Three of the most popular food delivery apps include Uber Eats, iFood and Rappi. Uber Eats is connected with 1,700 restaurants and deliver across 30 cities in Brazil and has seen 200% annual growth in the country since its launch in 2017.

Credit: McKinsey & Company

 

Despite Uber Eats’ global presence, iFood’s numbers eclipse it in Brazil alone. They make 390,000 deliveries a day, have partnered with 50,000 restaurants, employ 120,000 deliverers and are available in 480 Brazilian cities. iFood also saw a 109% growth in deliveries across 2018 and attracted $500 million in fresh investment last year.

Rappi is also popular. It’s available in 15 cities, has over 800,000 users, and attracted $220 million in investment last year. There are, of course, other food delivery apps available in Brazil; little wonder with such amazing growth in the food delivery sector.

They’ll have to work hard to keep up with iFood, though, who are currently investing their capital in an autonomous workforce.

Food delivery innovation in Brazil and its effects on eCommerce

Such has been the explosive growth in Brazil’s food delivery industry that iFood has been working with São Paulo company Synkar to test four-wheeled delivery robots, set to be tested as early as January 2020.

They’re designed for shopping malls and condos, to reduce waiting time for food by taking items from the food court and delivering to customers in controlled environments (so delivery drivers don’t have to worry just yet).

Foreign companies, too, have also noticed Brazil’s desire for speed and convenience, and are investing in technology to streamline shipping between Brazil and other markets. China’s AliExpress is investing in new technology to reduce delivery times between the countries by 50%, as well as offering a fully traceable service and reducing shipping costs.

The thinking behind this and other moves is that, as the food delivery boom shows, a large number of Brazilian consumers are extremely connected and are investing a lot of their time and energy into eCommerce; so much so that Brazil has grown to become Latin America’s largest ad market.

A view of Rio de Janeiro: home to almost 7 million Brazilians

 

Research by Magna Global Intelligence suggests that $30 billion was spent on digital ads in Brazil last year, with Brazil accounting for approximately half of Latin American spending on paid advertising and online ads. Brazil also accounts for around half of the total display spend across the region.

And that’s only set to grow, with Latin America predicted to account for half the world’s smartphone users over the next three years (currently it’s less than a quarter). Advertisers across the world are looking to join this booming market and get in front of audiences with programmatic ads, but they’ll have to plan properly to achieve success.

Advertisers will need to have patience with Brazil

Despite the overwhelming positives of the market, its incredibly fast growth is working against it in some ways. Despite high smartphone penetration in Brazil, there are still large internet access disparities stemming from social class issues across many Brazilian regions.

That lack of infrastructure and slow internet speeds highlight how the country is becoming a victim of its own online success in a way, which will naturally affect the way eCommerce company’s do business in the region.

eCommerce penetration is still low and many categories are still burgeoning. At the same time, while the average Brazilian loves to spend time online on their

 

Kevin Ford

2019-12-05

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