Latin American Search Market Poised for Growth

At Search Engine Strategies Latino in Miami last week, Gonzalo Alonso, Google’s general manager for Spanish-speaking Latin America, shared a hopeful message of untapped potential in the Latin American search market.

“When we see Latin America, we see growth,” Alonso said. “In the last 12 months, Latin America has become a number-one priority for Google.”

A special report from the Search Engine Strategies Latino conference, June 18-19, 2007, in Miami, Florida.

Earlier this year, Alonso was elevated from his role as GM in Mexico to his new position, based in Buenos Aires, Argentina. He joked that the country had its advantages in food and wine, but also had an exceptional talent pool, strong e-commerce presence, and a growing population of online users.

While the market in Central and South America is growing faster than the U.S., Asia, and most of Europe, it still faces some challenges that need to be overcome. According to Alonso, these include establishing online payment methods, increasing the number of e-commerce players, getting businesses to build indexable Web sites, and getting the government involved in closing the Internet gap.

Brazil, Mexico, and Argentina are the largest online markets, with Chile and Colombia catching up. While Internet penetration in all of Latin America is low, cell phone penetration is not, so one way to increase the Latin American online population is by building sites that are easy to use via a cell phone, he said.

“If we find a way to connect people in the right way on a cell phone, that will increase the penetration by 300 percent, overnight,” he said.

Challenges to Online Growth

Latin America is a complex ecosystem, Alonso said. Besides getting more users online, there are four main challenges to growth in online marketing in general, and search marketing specifically:

  1. Payment methods: Credit card penetration is low, and the banking system is not ready to face the challenges presented online. “We have to find a new, creative way to get money, especially micro-payments,” Alonso said.
  2. E-commerce: While certain areas are growing faster than others, the Latin American market in general needs more e-commerce players, he said.
  3. Building Web sites: Latin American businesses need to be educated about basic SEO, so that they can build sites that Google and other search engines can index. Earlier this month, Google launched a version of AdWords Business Pages for the Latin American market, giving businesses a free landing page hosted by Google, to which they can point their AdWords ads. Google has offered a similar service to advertisers in the U.S. since December.
  4. Government participation: Google and other Internet companies want to help close the Internet gap, with money and resources, but they need the governments to step up and create programs and infrastructure for these companies to support.

Expansion of the search market is also manifesting as a shift inside companies, Alonso said. Search is gaining a bigger piece of the marketing budget, and Google is talking to more people on the business side, he said. “Once we prove to them that search marketing is important for them to get their quotas, a whole other conversation starts happening,” he said.

One problem for searchers, and for search marketers, is the lack of quality Spanish-language content (or Portuguese-language content, in Brazil) that gets surfaced by Google. Often, the content exists, it’s just that many of the sites are not built in ways that allow Google to index them, so they don’t show up in search results.

“It’s not only about building a Web page, but it’s about building the right Web page,” he said.

The search market is also in need of more research, so that search marketers can show businesses why they should be spending money on search. Governments are not doing it, Alonso said, so it’s up to Google and the search marketers themselves to step up and fill the void.

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