Having been to the ESOMAR Congress in Istanbul, walking into the welcome reception at ESOMAR LatAm in Buenos Aires I’m struck by how much smaller and more intimate it feels. I had heard beforehand that the atmosphere at this conference is very friendly which certainly felt true: before I knew it, I had been invited to a dinner with a group of delegates from Mexico, Ecuador and Argentina!
On the first day several presentations talked about economic situation and societal changes in Latin America and the rise of the middle class in particular. Marita Carballo from VOICES! Argentina kicked off the day by telling the audience that middle class now accounts for 30% of the population in Latin America; while in the past there were 2.5 times more poor people than middle class, their numbers in society are now roughly similar. However, there are still two Latin Americas: one that enjoys the benefits of economic growth and another one that observes the development from the side lines. The growing awareness of shortcomings in economic, political and social systems are resulting in more demands for democracy as well as more extreme reactions such as riots. Such rapid changes in the local environment also require agile solutions from marketers and market research, as demonstrated by a case study by Coca Cola and Brainjuicer: during the “Brazilian spring”, real time analysis helped the client to understand what was happening and create a new campaign to adapt to the changed situation.
However, despite the common trend of a growing middle class, the countries of Latin America represent a blend of cultures and a huge diversity. Nowhere is this diversity more evident than at the bottom of the pyramid, as Scott Rencher from Euromonitor International told the audience. Even though marketers’ focus has been shifting to the emerging middle classes, there is ample opportunity to tap into the lower end of the market which, if taken together, represents a sizeable part of the Latin American economy. The number of low-income households varies considerably per country and reaching these consumers may require companies to re-think their business models as strategies from advanced economies or even other emerging markets may not work: for example, within the lowest earning 10% of the population, ownership of something as basic as a refrigerator can vary from 80% in Venezuela to less than 10% in Peru and Bolivia! With spending patterns of disposable income for both the middle and lower classes varying from one country to another, in-depth understanding of each market is crucial.
As a great example of such knowledge, a presentation by SKIM tested 21 different types of promotions across four Latin American countries and pitted them against principles from behavioural economics to understand what underlying behavioural biases and heuristics might be affecting the success or failure of each promotion. Unsurprisingly, the most aggressive price reductions (BOGOF and 3-for-2) were most attractive across the board but locally effective alternatives exist: for example, free samples are particularly attractive in Brazil and Argentina while instant prizes appeal in Colombia. The results also suggested that there are definite differences between the countries with sweepstakes being an appealing option in Brazil and a complete no-go in Argentina, which again highlights the importance of local knowledge.
The guest speaker of the first day, Esteban Socorro from Coca Cola, then talked about the transformation of marketing and the evolution of the market researcher. Many people now think marketing is dead, and in Socorro’s opinion the biggest reason for that is its inability to solve the dilemma of 3 I’s: integration, influence and integrity. Marketing is struggling to link its activities to the bottom line such as brand equity to actual firm equity, and is overly focused on metrics such as likes, tweets and followers at the expense of generating genuine business growth. In Socorro’s words: trending topics are great, but what’s in it for me? Marketing is also struggling to influence people: far too few brands start from the reason why people should buy a product but instead focus on what they are offering to consumers. Integrity is also a growing issue with all generations but particularly with younger generations who are more likely to perceive marketing as something aimed to deceive them instead of communicating product benefits. All of these issues have implications for our industry, too: for example, we should look at integrating metrics and focus on return on investment, increase the speed of evaluation as well as begin to understand the social, economic and cultural impact that companies have.
The first day wrapped up with the Netquest networking dinner overlooking the stunning Puerto Madero docks. It didn’t take long for the first delegates to hit the dance floor, and before the night was over, there was even dancing on the tables!
The second day of ESOMAR LatAm dawned with a focus on how technological advancements are causing big changes in the region. The number of mobile devices is rising sharply and changing the landscape for marketers and market researchers alike. However, what truly woke up the audience was the refreshingly different presentation on the life of a sport fan in Latin America from ESPN and Omnicom that kicked off with a video clip of the presenters being interviewed in a “sports programme” on their project before taking to the stage decked out in sports shirts and throwing a football between them when taking their turns to speak.
Following in those creative footsteps, Carola Verschoor from groh! and Peter Van Hende from Belgacom talked about how to enhance the usability of research through strategic creativity and shared several examples taking research findings from a standard report to more practical, shareable visually appealing formats that have stronger potential to influence decision making across different stakeholders in client organisations by helping them to see the bigger picture and connecting multiple research reports. As the perfect finishing touch to the string of creative presentations, closing keynote Orlando Hooper-Greenhill from JWT in the UK asked what data can tell us about creativity through the lens of Cannes Lions awards. The what and where of creativity is rapidly changing with a proliferation of channels from just two (TV and press) after 2000 to a broad range of media. The geographical geographical focus is also shifting from the US and UK after years of domination to new hubs of creativity particularly in Brazil and Australia. The gap in creativity (as measured in Cannes Lions) between developed and developing markets is closing fast – he predicted that by 2025 the roles will switch and developing markets will begin to dominate the global share of creativity. While Brazil has been dominating the LatAm share of creativity so far, smaller countries are catching up fast: Orlando showed a great example from Costa Rica where advertising was used to change attitudes towards work through changing the lyrics of a well-known song that subsequently became a number one hit across the country. The changing landscape of creativity also poses challenges for the market research industry: how well are we prepared to evaluate these new forms of creativity?
The conference also saw the inauguration of the new ESOMAR Foundation by its President, Gunilla Broadbent, who introduced the new initiative and awarded its first local initiative grant to the Tzedaka Foundation in Argentina to support disadvantaged young people to enter university and break the cycle of poverty for themselves and their families.
Overall, the quality of papers was very high and all the presentations were incredibly polished compared to many conferences I’ve attended in Europe (if you ever get to present here, hire a graphic designer). Despite my long-standing interest and extensive travel in Latin America, I felt I learned a great deal about the markets in the region which are much more varied than one might expect from a European perspective (although it’s good to remember that, geographically, Argentina alone could fit most of Europe inside it!). Interestingly, presentation styles are much more serious and passionate compared to Europe with tenser body language – jokes or self-depricating anecdotes were only seen in the presentations by Europeans. My guess is that this has to do with perceptions of credibility: a formal presentation style is a signal of credibility here whereas in Europe, and especially in the UK, it might be interpreted as taking oneself far too seriously and result in more negative perceptions of the presenter.
However, even more valuable than the presentations themselves was speaking with the local researchers in person. The local conditions of everyday life of a market researcher in these markets are challenging to say the least, with Argentina being the most extreme at the moment due to its economic climate. For example, the rampant inflation means project costs from even a couple of months ago are not comparable which is difficult to explain to clients outside the country. Prices of goods are changing sometimes within weeks so keeping a tracker up-to-date is a nightmare as are staff salaries – in Europe, a raise of 25% would be worth celebrating whereas in Argentina it’s less than the unofficial inflation rate.
While speaking to a researcher from Brazil, I also caught a glimpse of the challenges in defining social grades in a rapidly changing country: their current social grading system is partly defined by items owned in the household which is proving to be a debatable basis in a country where the government is encouraging the purchase of expensive goods through cheap credit which, in turn, is potentially inflating the figures of what constitutes as middle class for market researchers. As a European I’m used to working in a relatively stable society and can’t imagine many consumer projects that would require such extensive understanding of the impact of various economic and political factors, so juggling such details on a daily basis certainly gets my respect!
I also found it surprising was that many of the researchers appeared to have a background in either psychology or sociology, which was often mentioned during presentations. In my experience, in the UK researchers tend to come from a range of backgrounds which are often less focused on these two academic disciplines that historically underpin much of our industry and I couldn’t help wondering how that has influenced the industry in this region.
Just to wrap up a great conference, the local ESOMAR representative Susana Marquis organised a dinner and drinks for everyone that was still around so we all packed into taxis, zoomed off to the chic Buenos Aires neighbourhood of Palermo and tucked into steaks the size of a small pizza. Having experienced Latin hospitality at its best, I look forward to attending the next ESOMAR LatAm conference!
Elina Halonen is a founding partner of the Irrational Agency and editor at InDecision blog.