Analysis: 5 Questions and Answers about the Panregional Advertising Market
What is the Panregional Advertising market? Our just published report defines the panregional advertising market as advertising placements bought in two or more Latin American countries by buyers outside of those countries. The advertising is usually bought out of so-called panregional media buying hubs, most notably South Florida (Miami).
Below 5 questions and answers about the Panregional Advertising and Media Market from Portada's Editorial Team. Caveat: You will learn something, but to know more you will have to buy the report! (;-), (you can buy it here at a 25% discount by entering the code NEW-YEAR 25.
- Does the Latin American Panregional Advertising Market have any relationship with the U.S. Hispanic Advertising Market?
Generally speaking, not much as the clients and agencies generally target one market or the other. However, some agencies target both markets as the target audiences of both markets can have important commonalities (e.g. Mexican audiences and Mexican Americans in the U.S). Monica Gadsby, who in November 2009 was appointed CEO of Starcom Media Group's Hispanic and Latin American units, said at the time that “there is a lot of possible overlap between U.S. Hispanic and Latin America."
There is another overlap between both markets: In the digital world, the connection is much bigger. Many new digital advertising technology - placement ventures (e.g. Digilant, Turn, Pulpo Media, Batanga, GDA and Medula Network) have a strong presence in both markets.
- How big is this market
Portada estimates Panregional Advertising to grow from an aggregate volume of US $340 million 2011 to US $466 million in 2017 at an annual compounded growth rate (CAGR) of 6.4%. So this market is relatively small, but it cannot be emphasized enough that while the panregional market amounts to a small share of the overall Latin American advertising market, approximately 1%, panregional media buying decision-making has a far larger impact on overall Latin American media buys as regional media planning decisions taken in Miami or other centers very often are implemented on the national Latin American country level.
- Where are the main decision makers?
Since the eighties when panregional cable buys and a little bit later print buy strategies started to be implemented out of Miami, South Florida has developed as the main panregional media buying hub. Lamac (Latin American Multichannel Advertising Council) and media placement firms reduced the complexity of buying media in Latin American countries by providing one-stop-shop solutions. In addition, they were able to offer substantial discounts for their cable feeds and large print buys. However, over the last decade and with the strong growth of the Latin American economies, Latin American based panregional media buying hubs have emerged. These include Mexico City, Buenos Aires (Argentina) and Sao Paulo (Brazil). Major agencies and clients are based in those locations.
- Does the share of the different media types (Cable, print, digital etc) in the panregional advertising market reflect the overall structure of the Latam Advertising and Media market?
No. Cable TV advertising has traditionally had the main share of panregional advertising, while in the overall Latin American advertising market open TV clearly leads and Cable is relatively minor. In addition, the share of digital advertising does not surpass a 10% share of the overall Latin American Advertising market, at best, while digital media's share in panregional advertising lied at 21% in 2011 and is expected to surpass 36% by 2016. A major factor explaining the emergence of digital media on a panregional basis is that agencies that buy media pan regionally tend to be more open to digital innovation.
- What's all the fuss about the regulations?
Panregional Media buying depends on the ability to buy media from outside the country the media is placed in. Many Latin American countries, most notably Brazil, have recently introduced new laws that make it compulsory to use local media agencies to buy media. In addition, some countries are also promoting the local production of TV spots by taxing spots that have been produced outside of the country.