Panregional Survey:High Growth Rate propelled by Brazil and Digital, New Regulations…

What to expect from 2012 in the Latin American panregional advertising and media space?  MagnaGlobal expects 2012 advertising revenues to grow by+12.4% in emerging economies, with Latin America leading the charge (+13.0%). But what about the panregional space? In other words, the space that buys Latin America media from ,mostly, the U.S? Portada asked major panregional executives on the agency, media and client side about their expectations for next year.

Latam: Propelled by Brazilian Growth…
Everyone agrees that Brazil is going to be the strongest country in the region as far as growth is concerned.

Fernanda Mariano (photo), Business Development Manager of Multimediausa says:  “I expect there to be major growth in Brazil as its recent financial boom is nearly unprecedented when compared to the "competition". Brazil has been undergoing a phenomenal shift in its position as a global decision making superpower and clients and agencies who take advantage of this will see measurable results in terms of brand exposure, increased revenue, etc.”

Tomás O Farrell (photo), Partner & VP of Datam, Fnbox, agrees with Mariano and expects higher growth “Mainly in Brazil and Chile. Growth will be strong in Latin America in general, thanks to the penetration of residential broadband along the region and because of the increased use of shared environments -such as Internet cafes or universities-, home and office connections.”

Natalia Vasco (photo), Client Service Director Latin America of Havas Media: “We know for sure that Brazil will continue driving the economic development of the region, while other countries will focus in consolidation of their economies and structures. For that reason, we believe the Pan Regional Media market has some potential opportunities on those markets where penetration of some key media is growing rapidly.”

…but other countries too…

Beth Uyenco Shatto Global Research Director of Microsoft Advertising expects that Argentina will grow considerably too.  Guido Conterno Executive Director of GDA expects higher growth in Argentina, Colombia, Mexico and Peru, while Roberto Ricossa, Marketing VP and Channel Director of Avaya answered Brazil, Mexico and Argentina. Raquel Solorzano, Regional Media Manager, Diageo thinks Mexico and Brazil will be the strongest countries  and Carolina Sintes, Marketing Director of Sony Pictures Television that answered Brazil and Colombia. 

For her part, Cynthia Evans , Managing Director at GroupM / Mediaedge said “On percentage basis on real dollars spent - Colombia, Peru and Mexico. On inflation dollars: Brazil, Venezuela and Argentina.”

…who will benefit from a very high digital media growth.

According to most executives digital media will, by far, be the medium with the highest growth rate, although mobile platforms and Pay TV are also going to thrive.

Giuliano Stiglitz , Global Sales Director, Orange Advertising Network at France Telecom Group thinks digital will be the strongest media. However, he sees “innovation” in general as a challenge.  

Jose Costa (photo), Vice President of Marketing for Latin America and Caribbean at Burger King Corporation expects cable and digital to  be the strongest media types “ The biggest opportunity for marketers in the region is to capitalize on the growing adoption of digital and mobile platforms. Consumers are increasingly connecting with brands around the clock and it's critical to communicate in a relevant, differentiated and timely manner. At Burger King we are leveraging consumer insights and technology to develop online and mobile tools that enable us to build a more authentic brand experience with our guests”, said Costa.

Tomás O Farrell said “Definitely, digital will be the strongest. The migration of ad spending from traditional media to the online world is clear evidence of this fact. According to e-marketer, online ad spending in LATAM will more than double over the next four years, growing from $2 billion in 2010 to $4.2 billion in 2014. Mobile is starting to appear in the radar, although it´s still years away from being mainstream. The main challenge for the growth of the industry is to change the mindset of old school media planners and marketers and adjust it the new available tools, platforms and channels. Additionally, turning the digital campaigns´ business practices more transparent and accountable, both for ethical issues and optimization of the activities are key going forward.”

Fernanda Mariano also sees a resistance to change among executives as the main challenge: “Since it hasn't been around as long as traditional media, digital media sometimes is put aside by companies who may be relying on the habitual practice of solely valuing print or TV because of their familiarity with it.”

Helber Diaz (photo), Media Director of Mediabrands thinks that Outdoor and Print, besides digital and Cable, are going to be the strongest type of media. The challenge will be on the client side for Helber Diaz “Markets Synchronization and Leverage Media Agencies: Efficiencies and Differentiation (creativity) Media: Rate Policy Clarity”

Matias Comella (photo), Manager, B2B Online Marketing for  Latin America & Caribbean of Symantec Corporation says “Digital should in theory represent the highest growth, accompanied by the growth of sales of new devices in the region (tablets, smartphone’s and netbooks). Emerging markets in the region showed resilience vis-à-vis of the global recession while multinational corporations and global investors sought refuge in them. The main challenge to advertising in Latin America would be a deepening of the global recession that could affect the advertising budgets of multinational corporations. In such a case, media could seek more local advertisers (small and medium sized corporations operating locally) to make up for the retreat of the bigger accounts.”

Roberto Ricossa expects that TV and Digital Media will continue being the strongest types of media for advertising in our region as it has been during 2011. In relation to the challenges agrees that “Without any doubt the global economic environment has represented a challenge for the growth of any region including LatinAmerica but there is also a great opportunity for us and it is something that Latin American businesses are already leveraging.”, said Ricossa.

Paul Suskey (photo), co-CEO of Media 8 anticipates a “Flat to small growth throughout the region, perhaps accelerated growth in Brazil, Colombia, and Mexico. Digital will continue to uptick across all countries and the challenge will be the global economic pressures on economic stabilities and regional investment.”

 

The new regulations: The big question mark

Natalia Vasco thinks “Pan Regional media has been growing at high rates during the last years, driven mainly by commodity prices and economies of scale when compared with buying some media locally. However,new regulation in local laws, a re-valuation of the pan regional product in terms of advertising rates and a natural growth of digital media shows an interesting mix of behaviors. The Pan Regional market will experience both growth and contractions at the same time, depending on what media we are looking at. The new laws regulating the Cable TV commercialization in countries as Mexico or Brazil will definitely impact the growth this media has experienced during the recent years. But at the same time, the penetration of this media is growing at important rates in the rest of the region. Digital media -for sure- will continue its unstoppable growth”.

Guido Conterno: “Digital panregional sites will grow and the challenge for panregional ad budgets is the migration of budgets to the region which is increasing due to finance reasons (value added taxes) as well as local budgeting vs panregional budgeting among global brands.”

Carolina Sintes and Raquel Solorzano also see the main challenge in the local country laws as well in the diversification of allocated budgets and inflation. Alfonso Cueto, Director of Ad Sales of ESPN said the challenges are “Local laws and minute restriction in Mexico and local agency protection laws in Brazil.”

María Carrasquillo, Senior Marketing Manager for Latin America, Oster, answered: “Radio is growing because consumers are spending more time in the cars mornings and afternoons (price more affordable), meanwhile digital reaches people 24/7. Outdoor decrease in some countries due to some implementations restriction, although the agencies are using other outdoor areas (buses, buildings, movies). TV is losing budget to digital and radio at least this is the trend in the appliances industry.  Digital is growing, however it is more difficult to measure and link to sales. But it does give you the opportunity to filter your target in many ways. Another challenge are media rates going up to an average of 30% in countries like Peru, Brazil and Argentina when at the same time media (budgets) of companies are decreasing.”


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