eMarketer and Starcom MediaVest Group (SMG) have together released a new report that establishes a credible dataset for brands to use in order to more effectively penetrate emerging and mature global media markets. Today we take a look at their study on the Latin American Market.
eMarketer predicts consistent growth in Latin America of about 6% to 9% annually through 2014.
Measured-media advertising spending fared better during the recession in Latin America than in any other region of the world. eMarketer estimates that total media ad spending declined by 1.5% in 2009 to $25.6 billion. 2010 will bring a rebound of 9.4% growth, the second-strongest increase in the world after the Middle East and Africa.
ZenithOptimedia expects growth to accelerate in 2010. Zenith considers Brazil and Mexico to be the largest markets, accounting for 58% of the total advertising spending in the entire region in 2009. TV will retain the majority of ad dollars through 2012, accounting for 61.4%.
Online ad spending is expected to remain at 3.5% of the total in 2012 because of lower internet penetration across the region compared with more developed regions like North America and Western Europe.
Marketers are following the population online as media usage in the region becomes more concentrated on the internet and mobile devices. Online ad spending in Latin America proved resilient in 2009 as it grew 13.3% despite the recession to reach $1.7 billion. eMarketer expects double-digit growth through 2014, when online ad spending in the region will top $4 billion. Latin America will increase its share of the worldwide online advertising market from 3% in 2009 to 4.3% by 2014.
Based on eMarketer’s projections, online will rise from 7.1% of total Latin American ad spending in 2010 to nearly 11% in 2014.
Other researchers agree on the positive outlook for online ad spending in Latin America. MAGNA expects Latin America to see $3.4 billion in total online ad revenues by 2015, or about 3.3% of worldwide spending. The researcher predicts that it will be the fastest-growing region in the world in online ad spending, maintaining a compound annual growth rate of 13.3% over the next five years.
PricewaterhouseCoopers (PwC) also predicts online advertising will spearhead growth in total media spending for Latin America, with double-digit increases in the market through 2014. It expects the two largest markets, Brazil and Mexico, to maintain their hold on the bulk of spending, but smaller markets should catch up as internet access spreads beyond urban centers.
According to eMarketer estimates, the number of internet users in Latin America has been increasing at about double the rate of population growth, steadily increasing penetration across the region. But broadband penetration, dependent on a competitive market and consumer base with disposable income, remains low. This will stifle widespread adoption of the internet, but the popularity of and competition in the mobile phone market will increase mobile internet access. For many countries in the region, about half the population had internet access and at least two-thirds had mobile phones by 2009.
Ipsos’ “Estudio General de Medios (EGM)” (“General Media Study”) and TGI Global country studies point to consumers in the region increasing their adoption of mobile phones, the internet and pay TV. Mobile phones have quickly become the most popular or second most popular consumer electronic device in all the countries surveyed, followed by TV. The print industry has seen the largest decrease in consumption, with most markets experiencing double-digit declines in readership, but newspapers tended to fare better than magazines.
The one exception was Venezuela. The TGI Global “Venezuela Study” indicates that all media except magazines and radio saw an increase in penetration. This could be because of the reliance on large government subsidies for the media industry keeping access costs low, but the long-term sustainability of this remains in question. Media usage demographics across the region remained fairly consistent on a country-to-country basis. However, from 2005 to 2009 (when the EGM and TGI studies were conducted), digital and mobile media saw adoption broadening and early adopters aging into different segments. Gender splits were relatively even in 2009, showing that females closed the gap in digital and mobile categories from 2005.
Brazil, which has the region’s largest population and economy, also has the largest and most mature overall ad market. Its online ad market is likewise the biggest in the region. Mexico, which has the second-largest population and economy, suffered more during the recession and trails Brazil significantly in ad spending.