Feature
Young urbanites fuel huge rise in adspend
21 November 2007
After a period of turbulent economic activity, Latin America is enjoying steady growth in adspend. The GroupM Annual Forecast predicts an increase of 21% for 2007, and this follows double digit growth each year since 2003.
This rise continues to be checked by political risk. Between November 2005 and December 2006, 12 of the region’s countries held presidential elections. In at least five, leftleaning governments came to power. In the 2005 annual Economist Intelligence Unit report, ranking risk on a scale of one (bad) to 10 (good), Latin America (north) came in at 2.95, Mexico 3.7, and Latin America (south) 4.8. Ecuador recorded a low of 2.2.
But the good news for advertisers is that there are more than 191 million urban, economically active people in the region, which also has an annual population growth rate of between 1.5-2%.
For marketers, there are three important statistics when evaluating opportunities in the region. First, 85% of people are estimated to live in urban areas, enabling marketing activities to be concentrated in key locations.
Second, 75% of the population is under the age of 40, which has helped fuel the rapid growth in digital media and the take-up of mobile phones. Finally, 39% of the female population is economically active outside the home, affecting the decision-making process for many product categories.
Marketers, agencies and media owners alike all agree that football, mobile phones and religion count as important. More than half the population engages in each activity: 52% watch on TV, attend or play soccer at least once in a 12-month period; 51% use mobile phones; and, according to Kantar TGI, 80% agree with the statement that “my faith is important to me”.
Latin America’s love of football is not just restricted to the male population, for female interest in the sport is increasing. But neither are Latin women tomboys – they are the highest consumers of colour cosmetics, fragrance and hair products in the world.
The most important advertising markets are Brazil, Mexico, Colombia, Argentina and Chile. Venezuela is strong yet challenging, due to political issues. Other Andean countries – Peru, Ecuador, Bolivia and Uruguay – represent more traditional business models and modest consumer potential, as do the Central American countries of Guatemala, Honduras, Panama, El Salvador and Nicaragua.
Through the region, pan-regional media is growing in penetration and prevalence. Cable networks are firmly established and can be purchased cost-effectively with options to feed different commercial messages to different sub-regions. Newspapers and magazines from the US are available in Spanish, while internet portals, such as MSN and Yahoo! offer further opportunities.
Argentina, Brazil and Chile are more European in their perspectives and behaviours. Print is a more developed medium and these countries tend to have a more established digital market.
Mexico shares substantial economic relations as well as a border with the US. The population and products flow back and forth for work and manufacturing, which has contributed an estimated $11m per year to the Mexican economy.
US and Mexican media owners also have shared interests. General Electric, owner of NBC and US Hispanic Telemundo TV Network, for example, has financial interests in TV production in Mexico.
Cynthia Evans