Portada’s editorial team analyzed Advertising Expenditures, Population and GDP ratios in BRIC countries (Brazil, India, China and Russia) as well as in developed countries like Japan and the U.S. They are shown in the table below. The conclusion is that the advertising markets of Mexico and to a lesser degree Brazil have a substantial growth potential.
These are the most striking implications of the data in the table below.
1) In the U.S., the largest advertising market, in the world, is where corporations spend the most advertising dollars per consumer.
2) China’s ad market is already bigger than Japan’s, although on an ad spend per person basis Japan has a much higher ratio ($38,200 versus $4,000). Among other reasons, this is because GDP per capita is much higher in Japan. However, Japan’s GDP per capita is roughly five times higher than China’s, and ad expenditures per person are 10 times higher. The data points to a sizable catch up potential for China’s advertising levels.
3) Using a similar reasoning as under 3, it can be said that the relationship between the GDP/Capita and Ad spend/person ratios is close to 1 in the U.S. and Japan. For Brazil and China this ratio lies at approximately 0.5, pointing to a substantial growth potential in both ad markets. For Russia the ratio is 0.36, while Mexico shows a substantial growth potential with a ratio of only 0.3 . India’s ratio is very low (0.1).
Note: The ad expenditures levels in these countries depend on other factors in addition to GDP and population such as GDP growth rate, institutional stability, legal framework, media market structure, age pyramid , etc.
Table: A look at Advertising, Population and GDP ratios
Source: Portada (US Hispanic Ad Market figure is from AHAA). 2010 data