Mercado Livre’s advertising revenue grew 73 percent year over year in the first quarter of 2026, a number that says less about advertising itself and more about what marketplaces have quietly become. Hugo Galvao de Franca Filho, founder and director of Enjoy Pets, describes the shift plainly: platforms that used to be sales channels now run as media channels first, and sellers who treat ads as optional are competing with one hand behind their back.
That distinction changes how a pet listing earns visibility. A strong product with good reviews used to climb organic search results on its own merit over time. Increasingly, that climb gets interrupted by sponsored placements from competitors willing to pay for the same search term, regardless of how the two listings actually compare.
What changed in how marketplaces make money
Sponsored placement used to sit alongside organic results as an extra option for sellers chasing a launch boost. As ad revenue has become a larger share of what marketplaces report to investors, that placement has moved closer to the center of how search results get built, not the edge of it.
Marketplaces now build recommendation and search systems that weigh paid signals alongside organic performance, using automated tools to diagnose why an ad underperforms and suggest fixes to pricing, images, or targeting. The infrastructure exists specifically to make advertising a bigger part of every seller’s outcome, not a side option for the few who opt in.
Why organic ranking alone stops being enough
A pet listing with strong reviews, fast shipping, and a fair price still ranks on merit inside the organic results. The problem is that fewer buyers scroll far enough to reach it, since sponsored listings now occupy more of the space above the fold on any competitive search term.
That squeeze hits categories with several strong sellers hardest. Pet food, litter, and grooming supplies all have multiple established competitors bidding on the same searches, which means a seller relying purely on organic strength is effectively ceding the first screen to whoever bids instead.
What this looks like for a specific pet listing
A cat litter listing with a five-star average and years of sales history can still lose the top of the search page to a newer competitor’s listing with a mediocre rating, simply because that competitor is paying for the placement. The buyer sees the paid listing first regardless of which one would actually serve them better. Hugo Galvao de Franca Filho states that this gap does not close on its own. Reviews and turnover still matter for conversion once a buyer clicks, but they no longer guarantee the click happens in the first place.
Where ad spend actually earns its cost back
Hugo Galvao treats ad budget as tied to margin per product rather than a flat percentage applied across the whole catalogue, since a low-margin bag of litter and a higher-margin supplement can absorb very different levels of sponsored spend before the math stops working.
That product-by-product approach keeps ad spend concentrated on listings where the extra visibility converts into profit, instead of spreading a fixed budget evenly across items that were never going to earn it back at the same rate.
What early adapters are doing differently
Sellers who still think of ads as a temporary boost for a new listing are working from a version of the marketplace that no longer exists. The ones adjusting fastest treat advertising as a permanent line in the operating budget, reviewed and reallocated as regularly as pricing itself.
The shift is not about spending more on every listing. It is about accepting that visibility now has a cost attached to it everywhere and building that cost into how a catalogue gets planned instead of discovering it one underperforming listing at a time. Hugo Galvao sums up the adjustment as less about chasing every trend and more about refusing to treat this particular one as optional.