Brazilian Companies are still in the infancy of Digital Marketing
Digital Marketing: Brazilians have increasingly connected with the company, but not so much. On Facebook, Instagram, Youtube, and other social networks, Brazilians spend up to nine hours a day surfing the web – 50% more time than the average American.
Ecommerce Bomb. Data from Kantar Ibope for the third quarter of 2017 shows that 46% of connected Brazilians made online purchases and 70% banked through digital channels. However, the companies operating in Brazil could not exploit this potential.
We have just completed an unprecedented survey of 79 companies representing ten sectors of the national economy. The result is startling: 80% of them are still new to digital marketing. This means companies don’t know how to properly segment their campaigns to reach specific audiences, and it’s difficult to measure the impact of marketing investments on their sales.
A large part of this lack is related to the lack of processes, culture, and people with the necessary skills in digital marketing. That is, companies have even managed to adapt offline operations, but they are not yet able to bring about sustainable structural changes and install a digital culture.
While marketing teams are quick to embrace buzzwords like “data-driven,” “artificial intelligence,” and “advanced analytics,” 80% of companies still perform those analytics on an ad hoc basis.
Even if they can collect customer data, they reduce their potential for insights because they don’t know how to extract it and leverage it with other sources. Only 2% of the companies surveyed are actually able to reconcile 360-degree data about their customers and integrate information about purchases, customer service, and customer surfing behavior.
Another alarming number: only 1% of companies are able to measure the impact of their brand investments on sales, taking into account all channels and the delay between the action of a brand promotion and the actual purchase by the consumer. Digital native companies are among the few that are good at measuring.
They are able to create marketing campaigns at a granular level for each stage of a customer’s purchase intent – the so-called sales funnel – and even measure the ROI in real-time. In traditional companies, the biggest challenge is to stabilize this fluid digital culture.
The segmentation requires that they have multidisciplinary teams that put the customer at the heart of operations. This is only possible with a clear change in mentality in the internal public. We believe that only after they lay these foundations will companies be able to move forward with data and technology. Digital marketing already accounts for 27% of advertising investment in Brazil.
Everything leads us to believe that we will follow in the footsteps of countries like the United States and the United Kingdom, where digital investments already account for 49% and 64% of the total, respectively. Investments in digital media in Brazil increased by 400% between 2011 and 2017. Investments in traditional media fell by 22% over the same period.
As companies struggle with digitization, the advertising pie is not only being redistributed, but it is also growing. Reaching digital marketing maturity will be crucial for companies looking to remain competitive in a connected market like Brazil’s.
Heitor Martins is a Senior Partner at McKinsey and Head of Digital McKinsey Latin America. Marcelo Tripoli, Co-Partner and Head of the Digital Marketing Competence Center in Latin America.