Performance-driven ad formats dominate Latin American retail media markets

In Latin America, ad buys on ecommerce channels consist of lower-funnel actions like sponsored product ads. Although brands are shifting spending to more upper-funnel formats, such as sponsored display and video, these performance-driven formats will remain the cornerstone of marketers’ retail media strategies in the near term.

This was especially true in Mexico, where more than 80% of all ad buys on Amazon’s official country site were for its sponsored ad format, according to client activity tracked by DataHawk in Q4 2021. Sponsored video and other ad buys paled in comparison.

Businesses’ overwhelming reliance on sponsored product ads is not surprising, given that it was one of the first ad formats Amazon launched in Mexico back in October 2018. However, DataHawk found that format allocations differed depending on the size of each company’s monthly budget for Amazon ads:

  • Those that spent over $100,000 per month employed a much more sophisticated mix of ad formats to reach consumers on Amazon.
  • Conversely, those that spent less, or that had much smaller budgets to work with, tended to stick with one or two advertising solutions—most notably, sponsored product ads.

Advertisers also made “similar” allocations on Mercado Libre, Rubio said. “Mercado Libre is one of the most-used product search engines in Latin America,” and ad formats, like product ads, "allow brands and sellers to increase their visibility, exposure, and boost sales on the digital shelf."

Since sponsored product ads are also seamlessly integrated into retailers’ UX, “there is tremendous opportunity to increase the number of product ad placements on their digital properties without negatively affecting, or disrupting, the customer experience for shoppers,” said Grégoire Flatin, head of retail media solutions at RelevanC.