CONTENTS. A Growing Consumer Class: The surge of the class C. Media Penetration in Latin America

Transcription

1 LATIN AMERICA S MEDIA MARKET 2013

2 CONTENTS A Growing Consumer Class: The surge of the class C Media Penetration in Latin America Internet: Audience size, future growth, sites with most reach, user attitudes toward Internet advertising, average CTRs in region and in major markets Social Media: Use, most popular sites, reach, influence on consumer purchase decisions Ad Spend Projections for Latam: 2013 and 2014 Online Videos: The audience, consumption trends and advertising potencial Print: Market Indicators of Growth TV: Trends in Ad Spend & Pay TV Penetration E-commerce: Total sales for 2012, growth since 2003, projected growth in key Latam markets, most popular products Mobile Market: Penetration of mobile phones, smartphones & tablets, the triple-digit growth of mobile Internet in Latin America and response to mobile advertising

3 A GROWING CONSUMER CLASS: THE SURGE OF CLASS C

4 In the past decade, more than 50 million people have joined the middle class in Latin America. 1 in 3 Families in Latin America are middle class Source: The World Bank, Economic Mobility and the Rise of the Latin American Middle Class

5 LATIN AMERICA S MIDDLE CLASS (CLASS C) HAS BECOME A SIGNIFICANT PORTION OF THE POPULATION IN SEVERAL KEY MARKETS. 60% 50% 47% 55% 52% 40% 30% 20% 10% 0% 33% 31% 32% 28% 21% 13% 7% 7% 3% Argentina Brazil Chile Colombia Mexico Peru Classes AB Class C Sources: 1 United Nations, 2 World Bank, 3 Cetelam report O Observador Brasil 2012, 4 Consultora W, 5 Departamento Administrativo Nacional de Estadística, 6 Asociacion Mexicana de Agencias de Investigacion de Mercados y Opinión Pública, 7 Asociación Peruana de Empresas de Investigación de Mercados, 8 Novomerc Chile

6 PARTICULARLY IN BRAZIL. WHY? FIRST, IT S GROWING RAPIDLY. 40,000,000 Brazilians joined Class C between ,000,000 Brazilians were Class C in % of the population In % of the population will be Class C Source: Cetelem BGN Observador Brasil, Fecomercio SP, Data Popular

7 SECOND, CLASS C IS SPENDING HUGELY: 2012 R$1.089 trillion 2015 R$1.4 trillion* *more than classes A and B combined! Sources: IPC Target, FecomercioSP

8 MEDIA PENETRATION IN LATIN AMERICA

9 TV, OUT-OF-HOME AND RADIO HAVE THE DEEPEST PENETRATION IN MANY LATIN AMERICAN COUNTRIES BUT INTERNET IS GROWING SIGNIFICANTLY. Penetration by Medium, 2011 Free TV Pay TV Radio Newspapers Magazines OOH Internet Argentina 95% 71% 68% 43% 21% 91% 54% Brazil 97% 35% 76% 34% 40% 86% 44% Chile 99% 60% 73% 48% 35% 90% 64% Colombia 94% 78% 68% 39% 32% 91% 63% Costa Rica 97% 58% 77% 81% 13% 94% 41% Ecuador 98% 24% 80% 65% 41% 99% 55% Guatemala 85% 63% 86% 74% 8% 99% 26% Mexico 97% 36% 54% 27% 27% 98% 48% Panama 94% 50% 62% 69% 12% 70% 51% Peru 98% 64% 84% 69% 23% 100% 60% Puerto Rico 87% 54% 84% 73% 22% 97% 44% Source: IBOPE Media Book 2012

10 AD SPEND PROJECTIONS FOR LATAM: 2013 AND 2014

11 LATIN AMERICA IS THE WORLD S FASTEST-GROWING REGION IN AD SPEND. Zenith Optimedia projects 10% growth in ad spend for Latin America in 2013 twice the growth of North America and triple the growth of Western Europe Latin America 10% 9% North America 4% 5% Western Europe 3% 3% Central & Eastern Europe 9% 9.9% Asia Pacific 7% 8% Middle East, North Africa 2.8% 2.3% Rest of World 9.3% 10%

12 LATIN AMERICA S AD SPEND IS GROWING STRONGLY IN ALL MAJOR MARKETS. Argentina: up 19.6% in first 9 months of 2012, 31.6% growth in all of Brazil: up 10.7% in 2012, 9.8% projected growth in Chile: 10.4% increase in all of Colombia: 8.8% growth in Mexico: up 14% in all of Panama: up 7.7% in all of Peru: up 9% in Uruguay: up 5.6% in all of Sources: 1 Cámara Argentina de Agencias de Medios, 2 WARC, 3 Asociación Chilena de Agencias de Publicidad, 4 Asomedios, 5 Confederación de la Industria de la Comunicación Mercadotécnica, 6 IBOPE Media Panamá, 7 Compañía Peruana de Estudios de Mercados, 8 Asociación Uruguaya de Agencias de Publicidad

13 AND BY 2014, BRAZIL WILL BECOME THE #5 AD MARKET IN THE WORLD. Rank Country #1 United States #2 Japan #3 China #4 Germany #5 Brazil Ad Spend in 2014 (billions) 173,593 53,434 48,755 27,548 22,216 Source: Zenith Optimedia

14 ARGENTINA AD SPEND SHARE BY MEDIUM, % 6.1% 3.2% 5.0% 4.8% 35.0% 37.4% 9.4% Free TV Pay TV Newspapers Magazines Radio OOH Cinema Internet Source: Cámara Argentina de Agencias de Medios

15 BRAZIL AD SPEND SHARE BY MEDIUM, 2011 OOH 3% Radio 3.% Pay TV 4% Internet 5.1% Cinema 0.3% Guides 1.1% Magazines 7.1% Newspapers 11.8% Free TV 63% Source: Projeto Inter-Meios

16 CHILE AD SPEND SHARE BY MEDIUM, % 4.6% 6.2% Free TV 1.9% 8.6% Newspapers Radio 6.8% 44.9% Magazines OOH Cinema Pay TV 26.6% Internet Source: Asociación Chilena de Agencias de Publicidad

17 MEXICO AD SPEND SHARE BY MEDIUM, % 6% Free TV 8% 7% 56% Radio Print Internet 8% Pay TV OOH Source: Confederación de la Industria de la Comunicación Mercadotécnica

18 PERU AD SPEND SHARE BY MEDIUM, % 3.5% 12.1% 49.68% TV Newspapers Radio 16.5% Internet Not specified Source: Compañía Peruana de Estudios de Mercados y Opinión Pública

19 VENEZUELA AD SPEND SHARE BY MEDIUM, 2011 Free TV 8.5% Internet 12.2% 26.9% Pay TV Newspapers Magazines 10.2% 6% Cinema Radio 1.5% 5.6% 23.5% 5.6% Direct mail OOH Source: Comité Certificador de Medios ANDA-FEVAP

20 PRINT MEDIA IN LATIN AMERICA

21 PRINT IS STILL A STRONG MEDIUM THROUGHOUT LATIN AMERICA. MARKET INDICATORS THAT SUGGEST THIS INCLUDE: Latin American newspapers will grow in revenue by 5.5% per year through 2016 to reach a total of US$10.4 billion 1 Newspaper circulation went up by 5% in Latin America between 2006 and In 2009 magazine ad spend dropped in every region EXCEPT for Latin America, and it s forecast to grow through Latin American newspaper revenues went up by 65% between 2006 and Newspaper circulation in Brazil grew by 1.8% in all of 2012 and in 2011 grew by 3.5% to reach 4.4 million copies, a new record % CAGR growth is forecast for newspaper ad spend in Argentina through Magazines grew 33.7% in ad spend in Argentina in Newspapers grew by 50% in circulation in Peru between 2007 and Sources: 1 PriceWaterhouseCoopers Global Entertainment Media Outlook , 2 WAN-INFRA,, 3 Instituto Verificador de Circulação, 4 KPMG

22 PRINT ALSO COMMANDS A MAJOR PORTION OF AD SPEND IN MANY LATAM MARKETS. Print's Share of Ad Spend in Key Latam Markets, % 36% 29% 29% Print ranks #1 in ad spend share in Argentina and #2 (after free TV) in Brazil, Chile, Colombia, Ecuador, Peru and Venezuela 18% 17% 10% Argentina Brazil Chile Colombia Ecuador Peru Venezuela Sources: Cámara Argentina de Agencias de Medios, Projeto Inter-Meios, Asociación Chilena de Agencias de Publicidad, Asomedios, Ipsa Group Latin America, Compañía Peruana de Estudios de Mercados y Opinión Pública, Comité Certificador de Medios ANDA-FEVAP

23 TV IN LATIN AMERICA

24 FREE TV RULES AD SPEND IN MOST OF LATIN AMERICA Percentage of TV s Ad Spend Share, 2011 Free TV Ad Spend Share in Major Latam Markets, % 45% 49% 56% 47% 54% 37% Argentina Brazil Chile Colombia Mexico Peru Uruguay Sources (left to right): Cámara Argentina de Agencias de Medios, Projeto Inter-Meios, Asociación Chilena de Agencias de Publicidad, Asomedios, Confederación de la Industria de la Comunicación Mercadotécnica, Compañía Peruana de Estudios de Mercados, Asociación Uruguaya de Agencias de Publicidad

25 BUT PAY TV PENETRATION REACHED 50% IN ALL OF LATAM IN FEB 2012 AND IS GROWING RAPIDLY. Percentage of TV s Ad Spend Share, % pay TV penetration in Latam by million 90% 50% of homes in Brazil will be subscribed to pay TV by 2018 potential audience of 173 million 2 Projected penetration of pay TV in Mexico in homes in Argentina have pay TV service million homes in Colombia have pay TV service 5 Sources: 1 Dataxis, 2 Anatel, 3 Centro de Investigación en Innovación en Telecomunicaciones, 4 LAMAC, 5 IBOPE

26 INTERNET IN LATIN AMERICA

27 AS OF 2012, INTERNET COMMANDS A HUGE AUDIENCE IN LATIN AMERICA: 232 MILLION. Percentage of TV s Ad Spend Share, 2011 Argentina Bolivia Brazil Chile Colombia Costa Rica Dominican Republic Ecuador El Salvador Guatemala Honduras Mexico Nicaragua Panama Paraguay Peru Puerto Rico Uruguay Venezuela 1,985,970 28,000,000 9,086,000 25,000,000 2,000,000 4,000,000 4,000,000 1,200,000 2,200,000 1,000, ,000 1,500,000 1,523,000 9,900,000 1,698,000 1,855,000 10,900,000 40,600,000 85,000,000 Sources: Internet WorldStats, comscore, Subsecretaría de Telecomunicaciones, Asociación Mexicana del Internet

28 BY 2015, THERE WILL BE 60% INTERNET PENETRATION IN LATIN AMERICA AND 120 MILLION ADDITIONAL USERS. 1 Percentage of TV s Ad Spend Share, 2011 Growth projections for specific markets: Brazil 168 million by 2014, up from 85 million in Chile 16.4 million by 2015, up from 9 million in Ecuador 7.5 million by 2015, up from 4 million in Mexico 65 million by 2015, up from 40 million in Paraguay 3.4 million by 2015, up from 1.5 million in Sources: 1 LACNIC, 2 Comitê Gestor da Internet, 3 Pyramid Group, 4 Latin America & Caribbean Network Information Centre, 5 Comisión Nacional de Telecomunicaciones de Paraguay

29 HERE S WHERE TO REACH LATIN AMERICA S INTERNET USERS. Percentage of TV s Ad Spend Share, 2011 Types of Web Sites with Deepest Reach among the Region s Internautas: 97.5% 96.3% 96.7% 96.4% 86.3% 85.3% Portals Search Entertainment Social Media News Community Source: Futuro Digital, comscore, March 2012

30 LATIN AMERICANS IN KEY MARKETS ARE WELL- DISPOSED TOWARDS INTERNET ADVERTISING. 67% of female shoppers in Brazil use the Internet as a source before shopping for products and services 1 95% of Brazilian consumers look for information online before buying a car 2 68% of Brazilian Internet users say that online ads influence their purchasing decisions 3 57% of Brazilian Internet users say that Internet ads motivate them to buy the products that are advertised 4 75% of Mexican Internet users stop to view online ads 5 83% of Mexican Internet users recall online ads 5 Product categories with highest recall include computer products (50%), movies (46%), mobile phones (45%), banks (32%) and software (32%) 5 53% like seeing ads on social media sites and 61% recall ads they see on social media sites 5 Preferred online ad formats for Colombian Internet users are banners (37%), videos (35%) and sponsored links 6 7 out of 10 Colombians check opinions and recommendations on social media before buying a product 1 Internet is the #2 medium that motivates Colombians to buy products 6 Sources: 1 Oh! Panel, 2 IDG, 3 Deloitte Media Democracy, 4 IAB Brasil, 5 Asociación Mexicana de Internet, 6 Estudio Colombiano del Internet 2011

31 LATIN AMERICANS HAVE SIGNIFICANT HIGHER CTRS THAN NORTH AMERICANS FOR STANDARD BANNERS AND ALSO FOR RICH MEDIA. Average Click-Thru Rate Latin America North America Standard banner (overall) 0.14% 0.10% 728X % 0.09% 120X % 0.07% 160X % 0.08% Mobile banner 0.48% 0.86% Rich media 0.34% 0.15% Source: MediaMind Global Benchmarks Report H1 2012

32 IN SEVERAL KEY LATAM MARKETS, FLOATING ADS PERFORM WELL & 300 X 250 STANDARD BANNERS GENERALLY HAVE HIGHER THAN AVERAGE CTRS. Average Click-Thru Rate Argentina Brazil Central America Chile Colombia Mexico Peru Standard banner (overall) 0.13% 0.14% 0.15% 0.12% 0.13% 0.15% 0.19% 728X % 0.15% 0.13% 0.13% 0.14% 0.13% 0.25% 120X % 0.13% 0.10% 0.12% N/A 0.10% N/A 300X % 0.15% 0.17% 0.23% 0.19% 0.17% 0.21% 160X % 0.12% 0.17% 0.23% 0.17% 0.17% 0.18% Rich Media 0.42% 0.22% 0.45% 0.25% 0.72% 0.44% 0.58% Enhanced std. banner 0.07% 0.11% 0.09% N/A N/A 0.09% N/A 728X90 N/A N/A 0.08% N/A N/A 0.08% N/A 120X600 N/A N/A 0.06% N/A N/A 0.06% N/A 300X % N/A 0.17% N/A N/A 0.17% N/A Polite Banner 0.18% 0.11% 0.15% 0.17% 0.16% 0.15% N/A Floating Ad 1.93% 0.44% 2.59% N/A 3.23% 2.59% 1.01% Expandable Formats 0.43% 0.31% 0.54% 0.23% 0.61% 0.53% 0.68% 234X % 0.55% 0.69% 0.50% 0.96% 0.69% 0.86% 728X % 0.40% 0.48% n/a N/A 0.43% 0.99% 160X600 N/A 0.23% 0.32% n/a N/A 0.32% N/A 300X % 0.20% 0.55% 0.43% N/A 0.56% 0.36% PushDownBanner 0.36% 0.17% 0.27% n/a 0.26% 0.27% 0.26% Source: MediaMind Global Benchmarks Report H1 2012

33 BREAKDOWN OF 2011 ONLINE AD SPEND, BRAZIL 3% Display 42% Search 55% Other Source: IAB Brasil

34 BREAKDOWN OF 2011 ONLINE AD SPEND, CHILE 51% 49% Search, Directories, Social Display Source: IAB Chile

35 BREAKDOWN OF 2011 ONLINE AD SPEND, COLOMBIA 2.50% 1.16% 1.01% 8% Display Search 17% Social media Video 70% Mobile marketing Source: IAB Colombia

36 BREAKDOWN OF 2011 ONLINE AD SPEND, MEXICO 12% 28% 61% Display Search Classified Source: IAB México

37 BREAKDOWN OF 2011 ONLINE AD SPEND, PERU 47% Display 53% Search Source: IAB Perú

38 BREAKDOWN OF 2011 ONLINE AD SPEND, URUGUAY 3% 3% 2% 5% Display Search 19% 36% Production of materials marketing Mobile 35.60% Services Other Source: IAB Uruguay

39 SOCIAL MEDIA IN LATIN AMERICA

40 Social media have deep penetration and heavy engagement in the region. 95% 50% 28% Of Latin American Internet users are on social media 11 Growth in Facebook users in 2011 in Latin America: more than 168 million users around the region 2 Of total time spent online in Latam is spent on social media sites 1 Sources: 1 comscore, 2 Socialbakers

41 Social media influence the purchase decisions of 62% of Latin Americans. 73% of Latin Americans regularly read comments about brands on social media 66.9% trust these comments 62% say these comments influence their purchase decisions 58.9% of Latin Americans go on social media to find product information 36.8% of Latin Americans follow brands on social media 78.6% follow brands to learn about new products offered by that brand Source: Oh! Panel study, May 2011

42 Facebook is Latam s America s most popular social media site but other sites have grown hugely in the region. Increase in Unique Visitors, November 2011 to November ,000% 2,500% 97% 86% 43% Source: comscore

43 ONLINE VIDEOS IN LATIN AMERICA

44 Online video consumption has spiked significantly in Latin America million videos watched every month in Argentina, Brazil, Chile and Mexico 96%: online videos have the deepest reach in Argentina, followed by Chile (92%), Brazil (84%) and Mexico (81%) 172 online videos a month are watched by Chileans, while Mexicans watch 155 per month, Brazilians watch 125 per month and Argentines watch 117 per month Source: comscore

45 Besides growth, online video offers major opportunities for ROI. Average growth of 37.5% Brazil is the 6 th largest market in the world for In online videos watched in Argentina, Brazil, Chile and Mexico between 2011 and Advertisers fail to reach 30% of the audience via just TV but can gain 16% of effective reach by combining TV and online video advertising 1 in terms of videos watched 2 In 2011, video views on YouTube grew 67% in Brazil 2 Sources: 1 comscore, 2 YouTube

46 E-COMMERCE IN LATIN AMERICA

47 E-COMMERCE IN LATIN AMERICA HAS GROWN BY 27 TIMES SINCE E-commerce sales in Latam in 2003: US$1.6 billion E-commerce sales in Latam in 2011: US$43 billion 26% projected growth in 2012 US$69 billion Projected e-commerce sales for Latin America in 2013 Source: América Economía & Visa Latin America E-Commerce study, 2012

48 OVERALL, CLOTHES ARE THE PRODUCT THAT LATIN AMERICANS BUY THE MOST ONLINE. A 2012 comscore e-commerce study of Latin America revealed the most popular products among online shoppers in the region: 1 Clothes 6 Entertainment tickets 2 Computer electronics 7 Vacation/travel 3 Music, movies or videos 8 Health and beauty care 4 Appliances 9 Books and magazines 5 Computer hardware 10 Sports and fitness Source: comscore

49 BRAZIL IS THE LEADING E-COMMERCE MARKET IN LATIN AMERICA 59% US$11 billion 2012 e-commerce sales in Brazil 2 The percentage of e-commerce sales in Latin America that are generated in Brazil 1 US$14 billion Projected 2013 e-commerce sales in Brazil 2 Sources: 1 América Economía & Visa E-Commerce Study, Latin America, 2012, 2 e-bit

50 BUT OTHER LATIN AMERICAN MARKETS ARE POSTING STRONG E-COMMERCE NUMBERS. Mexico #2 e-commerce market in Latam 1 US$6.2 billion in sales in 2012, 46% growth 2 Top 5 selling products are (#1) plane/train tickets, (#2) tickets to shows, (#3) hotel reservations, (#4) electronics, (#5) clothes 2 Chile US$1.7 billion in sales in % growth compared to Argentina US$3.3 billion in sales in 2012, 32% growth compared to best-selling products are (#1) smartphones, (#2) women s clothes, (#3) car accessories, (#4) men s clothes, (#5) home decor 3 Colombia US$2 billion in sales in Sources: 1 América Economía & Visa Latam E-commerce study, 2012, 2 Asociación Mexicana del Internet, 3 Cámara Argentina de Comercio Electrónico, 4 Cámara Colombiana de Comercio Electrónico,

51 LATIN AMERICA S MOBILE MARKET

52 MOBILE PENETRATION IN LATIN AMERICA IS AT 105% AND WILL REACH 130% BY Mobile & Smartphone Penetration in Major Latam Markets 142% 140% 124% 129% 120% 100% 100% 101% 89% 98% 80% 60% 40% 20% 0% 30% 20% 20% 14% 7% 10% 11% Argentina Brazil Chile Colombia Costa Rica Mexico Peru Mobile penetration Smartphone penetration Sources: 1 GSMA, Comisión Nacional de Comunicaciones de Argentina, Anatel, Subsecretaría de Telecomunicaciones, Ministerio de Tecnologías de la Información y las Comunicaciones, Ministerio de Ambiente, Energía y Telecomunicaciones, Superintendencia de Telecomunicaciones, Pyramid Research, Superintendencia de Telecomunicaciones, Unión Internacional de Telecomunicaciones, Everis, Oficina de Desarrollo de las Telecomunicaciones de la UIT, El Ministerio de Transportes y Comunicaciones, Instituto Nacional de Estadísticas, Comisión Nacional de Telecomunicaciones, Vision Mobile, Google, 3D Chile, LG Mobile Colombia, IDC, Futuro Labs

53 TABLET ADOPTION IS LOW COMPARED TO OVERALL POPULATION BUT SALES ARE SPIKING IN SEVERAL LATAM MARKETS. Argentina: 43% increase in tablet sales in 2012: 340,000 units sold 1 Brazil: Tablet sales reached 3.1 million in 2012 and are projected to reach 5.1 million in Chile: 27,300 tablets sold in first quarter of 2012, 11.5% share of portable PC market in the country 3 Guatemala: 40,000 tablets sold during Jan-June 2012, 52% more than Jan-June Peru: Tablet sales increased by 334% in the first half of Mexico: Tablet sales reached 2.2 million in 2012 and will reach 4.3 million units by Sources: 1 IDC, 2 IT Data, 3 GfkChile, 4 Gremial de Empresas de Informática, 5 Dominio Consultores

54 MOBILE INTERNET IS GROWING HUGELY IN LATIN AMERICA. 421% 194% 107% Growth in Brazil s mobile broadband subscribers, Increase in Argentina s mobile broadband subscribers, México s growth in mobile broadband subscriptions, % 69% 60% Chile s growth in mobile broadband connections, Increase in Colombia s mobile Internet use, Uruguay s growth in broadband connections in Sources: 1 Huawei, 2 Convergencia Research, 3 COFETEL, 4 Ministerio de Transportes y Telecomunicaciones, 5 Nokia, 6 Unidad Reguladora de los Servicios de Comunicación

55 LATIN AMERICANS ARE SHOWING STRONG RESPONSE TO MOBILE ADS. Of Latam mobile device users respond favorablly to geo-targeted ads 1 33%.48% Average CTR for mobile banners in Latin America, higher than that of Australia, Eastern Europe and most of Asia 1.60%.56%.61%.52% Mobile ad CTR for Colombia 2 Mobile ad CTR for Mexico 2 Mobile ad CTR for Brazil 2 Mobile ad CTR for Argentina 2 Sources: 1 MediaMinds, 2 Hunt Mobile Ads

56 Brazil s Media Market 2013 Key Trends, Data Points and Impact on Consumer Purchase Decisions

57 CONTENTS Ad Spend in Brazil , fastest-growing media, future projections Internet in Brazil: growth, usage, influence of Internet ads on purchases Media Penetration in Brazil E-commerce: buying patterns and hottest-selling products Print Media in Brazil: growth and consumption Social Media: usage, top sites, influence on consumer purchase decisions TV: growth, usage and penetration Radio: penetration, listener profile, reach Online Video: Brazil s audience, video consumption and potential for advertisers Mobile Market: Shopping habits and attitudes towards mobile ads of Brazilian smartphone users

58 EXECUTIVE SUMMARY Ad spend has grown over 100% since 2005 and Brazil will be the #5 ad market in the world by 2014 Internet and Pay TV are the fastest-growing media in ad spend: they have grown by 15% and 13% in 2012 Print is NOT dead in Brazil print media growing in circulation (4.4 million in % gain in 2012), penetration and earning record revenues (magazines earned 1.3 billion reais in 2011) TV and radio retain strong penetration and influence, and pay TV will have 90% penetration by 2018 There are 85 million Internet users in Brazil 68% of Brazilian women research online before buying products 68% of Brazilians say Internet ads influence their purchases and Internet affects their views of products Brazilians are shopping online more than ever and buy 4 key products the most Mobile penetration is 130%, 2.5 million tablets sold in Brazil in % of Brazil s 27 million smartphone owners view mobile ads and over 66% make mobile purchases

59 A GROWING CONSUMER CLASS: THE SURGE OF CLASS C

60 CLASS B IS RESPONSIBLE FOR THE MOST CONSUMPTION IN BRASIL D, 4% E; 0.1% A1, 3% C2, 9% A2, 16% C1, 17% B2, 26% B1, 25% Source: FecomercioSP

61 BUT CLASS C IS KEY FOR MARKETERS. WHY? FIRST, IT S GROWING RAPIDLY. 40,000,000 Brazilians joined Class between ,000,000 Brazilians were class C in % of the population In % of the population will be Class C Source: Cetelem BGN Observador Brasil, Fecomercio SP, Data Popular

62 SECOND, CLASS C IS SPENDING HUGELY: R$1,089,000,000,000 Class C will spend $1.089 trillion reais in 2012, then Source: IPC Target

63 THIRD, CLASS C WILL SPEND A LOT MORE, VERY SOON. R$1,460,000,000,000 By 2015 Class C will spend R$1.46 trillion, more than classes A and B combined Source: FecomercioSP

64 Ad Spend in Brazil

65 BY 2014 BRAZIL WILL BECOME THE #5 AD MARKET IN THE WORLD Rank Country #1 United States #2 Japan #3 China #4 Germany #5 Brazil Ad Spend in 2014 (billions) 173,593 53,434 48,755 27,548 22,216 Source: Zenith Optimedia

66 IN JUST 3 YEARS, AD SPEND IN BRAZIL WILL GROW BY 45%: US$15.3 BILLION TO US$22.2 BILLION Source: Zenith Optimedia

67 IN THE FIRST 6 MONTHS OF 2012, INTERNET WAS THE FASTEST-GROWING MEDIUM IN AD SPEND IN BRAZIL Newspapers 2.93% Out-ofhome 6.7% Radio 8.8% Free TV 13% Pay TV 15% Internet 15.46% Source: Projeto Inter-Meios

68 Cinema Guides Magazines Newspapers Radio Free TV Out of Home Pay TV Internet INTERNET AND PAY TV GREW THE MOST IN AD SPEND IN 2011 MORE THAN TWICE THE AMOUNT OF FREE TV % 17.80% 19.60% 15.00% 12% 10.00% 9.10% 5.00% 3.48% 3.80% 3.90% -6.30% -2.50% 0.00% -5.00% % Source: Projeto Inter-Meios

69 BUT FREE TV LED 2011 AD SPEND SHARE IN BRAZIL. OOH 3% Radio 3.% Pay TV 4% Internet 5.1% Cinema 0.3% Guides 1.1% Magazine 7.1% Newspapers 11.8% Free TV 63% Source: Projeto Inter-Meios

70 2012 Media Penetration Rates in Brazil Source: IBOPE Media Book 2012

71 Print Media in Brazil

72 Newspapers are surging 1.8% 3.5% BRAZILIAN NEWSPAPERS CIRCULATION GROWTH, BRAZILIAN NEWSPAPERS, CIRCULATION GROWTH, % OF BRAZILIANS READ NEWSPAPERS 2 Sources: 1 Instituto Verificador de Circulação, 2 Secretaria de Comunicação Social da Presidência da República

73 and so are magazines 39% 45% 13.7 MILLION AVERAGE CIRCULATION BRAZILIAN MAGAZINES 2011 NEW RECORD 1 GROWTH IN MAGAZINE PENETRATION, 2011 TO BILLION REAIS 63% MAGAZINE PENETRATION CLASSES AB 2 38% MAGAZINE PENETRATION CLASS C 2 Sources: 1 Instituto Verificador de Circulação, 2Estudos Marplan EGM Next Gen 2012 REVENUES FOR BRAZILIAN MAGAZINES IN 2011, A NEW RECORD 1

74 TV in Brazil

75 Free TV commands a huge audience in Brazil 175 MILLION BRAZILIANS WATCH TV REGULARLY 90% OF BRAZILIANS SAY TV IS THEIR PREFERRED NEWS SOURCE 1 5 HOURS 28 MINUTES Average time spent watching TV in Brazil 3 Sources: 1 Datafolha, 2 Instituto Brasileiro de Geografia e Estatística, 3 IBOPE

76 but pay TV is growing strongly MILLION BRAZILIAN HOUSEHOLDS SUBSCRIBE TO PAY TV: 90% will have it by % 15% Pay TV ad spend increase in Pay TV ad spend increase in % OF PAY TV SUBSCRIBERS ARE CLASS C Sources: 1 Agência Nacional de Telecomunicações (Anatel), 2 Projeto Inter-Meios, 3 Associação Brasileira de TV por Assinatura

77 Radio in Brazil

78 Radio has deep penetration in Brazil. Radio is present in 9 out of 10 Brazilian homes 1 75% of Brazilians say they have listened to the radio in the past 7 days, which ranks radio #3 in terms of media consumed in Brazil 2 49% of Brazilians with cell phones that allow them to listen to the radio, do so 2 Sources: 1 Levantamiento Sócio Económico do IBOPE Media, 2 Target Group Index do IBOPE Media

79 Brazilian radio delivers a range of interesting market segments. 80% of the 29.9 million cars in Brazil have a radio 1 In cars, most listeners are men of AB classes between 25 and 54 (32%) 2 Most radio listeners are women CDE classes (36%) 2 On public transportation, 63% of radio listeners are young people Fontes: 1 Instituto, 2 IBOPE

80 Internet in Brazil

81 The Internet audience in Brazil grew by 157% between 2006 and 2012 and will nearly double 2 years from now. In 2012 there were 85 million Internet users in Brazil 1 By % of Brazilian households will have Internet access 2 This means Brazil s Internet audience will reach 154 million 2 Sources: 1 comscore, 2 Comite Gestor da Internet

82 Other key data points to consider: 15 million access the Internet via mobile devices or Lan Houses 1 70 million Brazilians are active Internet users accessing from either home or work million Brazilians visited travel sites to plan travel in July % increase from July Brazil will have 73 million mobile broadband subscribers by the end of % growth compared to Sources: 1 IBOPE, 2 comscore, 3 Teleco

83 Internet ads hugely influence the purchase decisions of Brazilians. Here s why: 67% of female shoppers in Brazil use the Internet as a source before shopping for products or services 1 95% of Brazilian consumers look for information online before buying a car 2 Sources: 1 IDG, 2 Oh! Panel

84 Internet also helps close the sale: 68% of Brazilian Internet users say that online ads influence their purchasing decisions 1 57% of Brazilian Internet users say that Internet ads motivate them to buy the products that are advertised 2 56% of Internet users in Brazil say that Internet ads motivate them to visit online stores 2 56% of Brazilian social media users say they use social media to buy products 3 Sources: 1 Deloitte Media Democracy, 2 IAB Brasil, 3 Oh! Panel

85 In addition, offline media drive the effectiveness of online campaigns in Brazil. 79% of Internet users in Brazil search for products after being impacted by offline media Top offline media that drive Brazilians to search products online are TV (51%), print (35%) and Out of Home (27%) Source: Iprospect & Google Brazil

86 Top Activities Among Brazilian Internet Users: 1 - SHOP 31 million Brazilians visit e-commerce sites every month 1 2 LOOK FOR DEALS Coupon sites in Brazil grew by 379% between May 2010 and May SOCIAL MEDIA 97% of Brazilian Internet users are on social media 3 4 READ BLOGS Blogs have 96% penetration rate among Brazilian Internet users*** and 91% penetration rate among Brazilian executives 4 5 PLAY GAMES Brazilians spent $2 billion playing online games in WATCH VIDEOS Brazil leads Latam in number of online videos watched and in number of unique viewers 3 Sources: 1JWT, 2IBOPE, 3comScore,4CDN, 5Newzoo

87 E-Commerce in Brazil

88 E-commerce in Brazil grew in 2012 to reach US$11 billion and will reach US$14 billion in Top categories with Brazilian online shoppers: - Electronic appliances (15% of sales) - Computers (12% of sales) - Electronics (8% of sales) - Fashion & accessories (7%) 79% of Brazilians surveyed by Mobile Entertainment Forum in 2011 said they use their cell phones in some phase of purchase process 72% of Brazilians surveyed in 2011 by Associação Brasileira das Empresas de Cartões de Crédito e Serviços had a credit or debit card Source: e-bit

89 Social Media in Brazil

90 Social Media have deep penetration and brand engagment. 97% 77% 58% of Brazil s online population is on social media 1 of Brazilians who have a Facebook account interact with a brand online 2 of Brazilians who use Twitter read posts from their favorite companies 2 Source: 1 comscore, 2 ExactTarget

91 Social media also significantly impact the purchase process. 61% of Brazilians look for product information on social media pages before buying 1 42% of Brazilian consumers between 25 and 44 make a purchase after receiving a marketing message through a social network 2 Source: 1Oh! Panel study, 2ExactTarget

92 Facebook is the #1 social media site in Brazil but other sites are growing rapidly Social Media Site Growth in Brazil, % 338% 206% LinkedIn Vostu Tumblr In Oct 2012 LinkedIn reached 10 million members in Brazil Source: comscore

93 Online Videos in Brazil

94 Brazil has the largest audience for online videos in Latin America. There are 42.9 million unique online video viewers in Brazil 1 84%: the reach of online video in Brazil, an audience of 68 million, larger than the Internet audience of Mexico and Argentina combined 2 Sources: 1 ComScore, 2 YouTube 5.4 billion online videos were viewed in Brazil in August 2012, a 74% increase compared to August

95 Beyond growth, online video offers superb ROI potential. 19% growth in online video viewers in Brazil between 2010 and Advertisers fail to reach 30% of the audience via just TV but can gain 16% of effective reach by combining TV and online video advertising 1 Brazil is the 6 th biggest market in the world for based on video views 2 In 2011, YouTube grew by 67% in video views in Brazil 2 Sources: 1 ComScore, 2 YouTube

96 Mobile Use in Brazil

97 Brazil s mobile market is surging powerfully. 130% Overall mobile penetration in Brazil 1 14% Smartphone penetration in brazil, % Of cell phones in Brazil have web access 3 77% Increase in smartphone sales in 2012 vs By % Of cell phones sold in Brazil will be smartphones 4 Sources: 1 Agência Nacional de Telecomunicações (Anatel), 2 Google, Our Mobile Planet, 3 Nielsen, 4 IDC Brasil

98 14% smartphone penetration in Brazil means a market of 27 million smartphone owners. Here s how they use their phones to shop. 80% Research products or services on their phones 94% Notice mobile ads 31% Have bought products using theirs phone 3 of 4 Performed a mobile search after seeing an ad 66% of Brazilian smartphone owners make purchase once a month Once they sought information about businesses, 66% of Brazilian smartphone owners visited the business Source: Google, Our Mobile Planet 2012

99 Tablets are also taking off in Brazil. Tablet sales in Brazil will total 3.1 million units in 2012, compared to 450,000 in 2011, a 400% increase 1 42% of non-computer web traffic in Brazil is from tablets, 54% from mobile phones 2 Sources: 1 IDC Brasil, 2 comscore

100 As a result, mobile Internet is surging gigantically in Brazil. 60% of class AB Brazilians access the Internet via mobile phones, while 36% of class C Brazilians do this 1 In 2011, mobile Internet service subscriptions in Brazil increased by 99.8% 2 By 2016, 21% of all Internet traffic in Brazil will be from mobile devices like mobile phones and tablet computers 3 Sources: 1 IBOPE/Nielsen Online, 2 Paulo Bernardo, Communications Minister of Brazil, 3 Cisco

101 About US Media Consulting Launched in 2003, US Media Consulting is a leading media services firm that specializes in building links to reach Brazil, Latin America and U.S. Hispanics Starting with a client s goals, we devise media solutions that deliver powerful results via strategic media selection and execution Our team specializes by media type including Internet, online video, mobile, SEM, print, broadcast and OOH For agencies and advertisers, our expertise streamlines campaign execution while maximizing impact For media owners, we add sales firepower through specialists across the region and in all of our core markets See for more information