From target to audience: change of advertising strategy for Mercado Livre

The advertising business unit of Mercado Livre Brazil was created in 2009 to provide solutions to platform sellers, allowing them to take advantage of their inventory, which currently reaches 40 million unique site visits, generating 4,000 searches and 100 purchases by second. From a solution mainly reserved for sponsored links, the largest e-commerce site in Latin America has improved its advertising strategy over the past three years by focusing on a new goal: to enrich the user experience throughout the journey. ‘purchase. Originally posted on ExchangeWire Brazil.

Beyond volume, technology has become essential in helping to understand individual user behavior when making decisions – researching product information or making a purchase – across 28,000 product categories. With the implementation of the full-stack Google publisher package in 2016, integrated with the DoubleClick ad server, it became possible to use the rich data available to combine different attributes and access information about each user’s profile.

“We have a large volume of information about users, such as lifestyle and device used, among others. Several other editors do this, but our difference is that we can know what the user is looking for at the moment. of the purchase, ”said Alexandra. Mendonça, manager of Mercado Livre Advertising.

The advertising orientation has shifted from the target to the audience, thanks to the depth of the information obtained. Thus, not only market sellers started to benefit from the available inventory, but also brands and advertisers who do not sell on the platform. With this arsenal of information available, the advertising offered by Mercado Livre is geared towards both performance and branding.

The Mercado Livre Advertising business unit grew by 93%, in collaboration with agencies and advertisers, and by 153% in the long tail, between January and November 2016, compared to the same period in 2015. In specific advertising segments, the highlight was the 1050% growth in telecommunications. and technology growth of 280% in the first half of 2016, compared to the same period in 2015. In an interview with ExchangeWire Brazil, Alexandra Mendonça comments on Mercado Livre’s advertising strategy and the factors that led to this performance.

ExchangeWire: What has changed after this major technology investment?

Alexandra Mendonça: It changed our way of seeing the results of the campaign. Before, we worked by focusing on the category. With the adoption of technology, we have gained a holistic view of user behavior. We stopped focusing on the individual target, and instead focused on understanding the audience, and it worked. Previously, we were limited to users with a certain profile. For example, in an automobile campaign, the target was: “Male, class AB, married, etc.” With this clustering (creation of niches), we reach certain audience profiles, like other possible car buyers. We have increased our revenues a lot and we have started to act in different segments. Today, we have large clients who do not sell on our platform, such as banks, automotive companies, services; but they can run campaigns aimed at certain audiences.

What was the big leap in programmatic media for Mercado Livre last year?

We started to work very hard on the programmatic issue and moved from preferred deals to guaranteed deals; and we are moving more and more towards that. Our goal is to take advantage of the increased investments in programmatic in Brazil, as we have everything on hand (audience, traffic and technology) and offer maximum inventory for brands. We can also create value by adding to the user experience and showing the content as the user purchases.

What was the stake of this strategy?

Our challenge is to make brands understand that we can focus on branding and performance – and do it in the same environment. Our goal is to bring more branding campaigns to the platform, this is where we can make an effective impact. The consolidation of this came on Black Friday last year, when we had branding exercises. We have achieved a very high direct sales percentage, which is difficult for any publisher. Brands must also position themselves through their brand image, and not just in retail.

What vision does the company want to show to brands today?

Brands came to us wanting only the last step in the funnel. Why not integrate the positioning and brand awareness into the platform on which the user purchases? Ultimately, this translates into added value to the shopping experience. On the other hand, we have a better understanding of the needs of brands – marketers find it difficult to run branding campaigns without being able to see results. But we bring them a proposal to rework the positioning and deliver results.

What is the level of maturity of the market?

Advertisers and agencies already know the importance of programmatic and what to do; but, at the beginning, we saw a difficulty of execution. So over the past six months we’ve brought in a specialist to look at the whole chain – PSS and DSP, not just deal negotiations. Now I see the market as much more mature, with more knowledge on how to operate; and, on our side, we have an optimization in the workflow.

How is Mercado Livre positioning itself in terms of programmatic?

We don’t think we’ll be 100% programmatic because we have the other side of working on the user experience when purchasing. Today, we have enough technology and inventory to be well positioned in the segment. But this other work that we are doing is also a trend. No one in the market today is talking about actually examining this conversion funnel, creating user-driven strategies at all stages and on a single platform.

How does the dynamic work between the different business units?

They operate in an increasingly integrated fashion, both from the point of view of the end user and the seller. And advertising is in the middle of it all: we want to deliver the best advertising because our ads have always been native. We don’t sell data, but use technology to understand user behavior. The marketplace unit has access to sales data and we work seamlessly with BI focusing on one end goal: to make our salesperson’s store sell more – and those who don’t necessarily sell here can too. take advantage of this information.

You point out that the proposed formats are native, what was the result?

Our formats have been designed for the areas of user experience and in order not to interfere with the consumer’s journey. Native advertising is not invasive for the user. Some advertisers ask for formats like “the one that supports the homepage” – we haven’t used them, and we won’t. The formats that are most in tune with the identity of Mercado Livre are the most efficient, because they follow user behavior. In the past we’ve had some really cool experiences, but only from a brand perspective – from a user perspective, it’s cool when the ad is native. It’s part of that context.

What advertising trends are you betting on for 2017?

Mobile and video are the pillars of our strategy to provide the best user experience and also offer the best opportunities for advertisers. Today, Mercado Livre is already 100% mobile first; and we’ve followed that trend, launching new mobile ad formats, and we think we’ll ride that wave even more. Video is already a reality for us, but we are going to dwell on it even more.

How is e-commerce advertising evolving?

It has a lot to do with the issue of targeting and personalization of the offer; it is about leaving the target and going towards the public. No one wants ads that get in the way of browsing, and keep chasing you and giving you something you don’t want. The user wants more and more fluid navigation, independent of the device. On the advertiser side, some brands are already mature and can understand the e-commerce movement and the importance of showing the right message, to the right person, in the right context. E-commerce has enormous potential in Latin America – today only 4% of the region’s retail trade is digital. Meanwhile, we have a population with a huge appetite and digital engagement. The challenge we have set for ourselves is to show our case studies to brands and attract new segments – and we are increasingly prepared for it.