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3 Reasons Why Brazil Has Become a Major Luxury Market

In 2011, Brazil’s luxury market grew by 4.7% in terms of designer clothing and footwear while sales of luxury accessories went up by 3.5% to reach US$294 million, according to research firm Euromonitor.

Overall, Brazil’s luxury market doubled its growth rates between 2008 and 2012. As such, the country’s luxury goods market is worth more than US$7 billion. Mexico is in second place—Euromonitor reports that its luxury market is worth US$1.5 billion.

The following factors are driving Brazil’s growth as a luxury market:

#1 Economic growth
Despite relatively weak economic growth of 1.5% in 2012, Brazil’s economy should grow by 4% per year from 2013 through 2016. In addition, a recent study from IPC Marketing Editora projects that Brazilian consumption will surpass 2.7 trillion reales in 2012, with household spending growing by 3.6%, more than double the growth of the country’s GDP this year.

#2 Many HNWIs
According to research firm Global Information, Brazil has the largest amount of high net worth individuals (HNWIs) in Latin America. In fact, the country ranks 11th in the world in terms of the amount of high net worth individuals. In addition, a recent report by McKinsey&Company estimates that 3 million Brazilians can afford luxury goods and that the country has 24 billionaires and 155,000 millionaires—and a third of the millionaires are under 35.

#3 Projected future growth
MCF Consultoria & Conhecimento, a retail and luxury consultancy firm based in Sao Paulo, estimates that Brazil’s luxury market will grow by 25% in 2012. In addition, Euromonitor forecasts that BRIC countries (Brazil, Russia, India, China) will account for 16% of global luxury sales by 2016, up from 11% in 2012.

To find out how we can help you reach Brazil, Latin America or U.S. Hispanics via a strategic campaign across all media, please contact us.

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Pay TV Reaches 50% of Latin Americans

Impressive surges in individual markets have led to a pay TV penetration rate of 50.9% in Latin America. According to the Latin American Council on Multichannel Advertising (LAMAC), Argentina and Colombia have pay TV penetration rates above 81%. In Brazil, pay TV penetration has grown 118% since 2008—so now 36.1% of Brazilians have access to pay TV. In Chile, the pay TV penetration rate is 63.9%, while in Mexico it’s at 40.5%.

Brazil’s recent growth in pay TV subscriptions has been particularly impressive. Anatel—the Agência Nacional de Telecomunicações or National Telecommunications Agency—reported recently that 12.2 million households in Brazil had pay TV. With an average of 3.3 people per household, this means there’s a pay TV audience of 40.2 million in Brazil. And despite its relatively low penetration rate, Mexico is also a significant pay TV market: in spring 2011 LAMAC reported that the country had 10.5 million households with pay TV.

What makes the 50% penetration rate all the more impressive was that an earlier projection by Dataxis indicated that Latin America would reach this by 2015. Instead, LAMAC now forecasts 63% pay TV penetration in Latin America by 2015.

To find out how we can help you reach Latin America via pay TV or any other form of media, please contact us at info@usmediaconsulting.com.

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Brazil’s Ad Market Grew by 8.5% in 2011

Figures just released by Projeto Inter-Meios show a total billing by the Brazilian ad industry of 39 billion reales ($US22.5 billion), with 28 billion reales (US$16 billion) corresponding to pure ad space sales.

In 2010, the industry billed 21 billion reales, growing 20% compared to 2009. Free TV is still the leader in ad spend in Brazil, capturing 63% of the total. Below is a quick breakdown:

Note that Projeto Inter-Meios shows Internet as having only 5.1% of total ad spend in Brazil, while IAB Brasil’s figures show online capturing 10% of ad spend. That may because of the way Internet ad spend is tallied. IAB Brasil brings together both search and display, since these components each make up 50% of the online ad spend in Brazil. Projeto Inter-Meios does not seem to make that distinction, hence the difference between the two organizations’ figures.

Despite this difference, Projeto Inter-Meios observed that Internet ad spend grew by nearly 20% in 2011, more than any other medium. Out-of-home in Brazil also posted impressive growth in 2011—it grew by 12%. Brazilian print media also grew well in ad spend in 2011: newspapers gained 3.8% and magazine ad spend went up by 3.5%. These strong print numbers match other recent statistics that show the medium is doing quite well in Brazil, unlike in other markets. According to Projeto Inter-Meios, the only Brazilian media to show drops in 2011 were cinema and guides.

To find out how we can help you reach Brazil via a strategic campaign across all media, please contact us at info@usmediaconsulting.com.

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E-Commerce Explodes in Brazil

According to eMarketer, Brazil’s B2C e-commerce sales will total $18.7 billion in 2012—a jump of 21.9% compared to 2011. And the growth goes on from there. By 2015, eMarketer projects that B2C e-commerce sales in Brazil will reach $26.9 billion, with 31.6 million Brazilians making at least one online purchase that year.

According to eMarketer, a number of factors are driving the growth:

Multiple payment options. While 63% of Brazilian online shoppers used credit cards to make their purchases in 2010, the remaining 37% used boletos bancários. These are slips that a buyer prints out from the merchant’s Web site and takes to their bank to physically make the payment for the item. The buyer can also use the boleto bancário to make a payment via online banking. Either way, it’s a secure purchase method for buyers who don’t have credit cards.

Online security. Many potential e-customers in Brazil and Latin America have been hesitant to buy online because of security concerns. However, a 2011 survey from the Câmara Brasileira de Comércio Eletrônico indicates that 70% of Brazilian Internet users feel that online security has improved in recent years.

Further Factors
However, other changes happening in Brazil could very well impact e-commerce in 2012 and beyond.

>>>More users. First, projections suggest that 70% to 80% of Brazilian households could have Internet access by 2015—which means Brazil could go from having 78 million Internet users in 2011 to over 140 million by 2015.

>>>More mobile. The deep Internet penetration projected for 2015 refers to traditional PC connections. However, mobile phone penetration is at over 100% in Brazil and in fact, mobile devices are the #2 way for Brazilians to access the Internet. In addition, a 2011 survey from the Mobile Entertainment Forum revealed that 79% of Brazilians use their cell phones in some phase of the purchase process. Putting these two facts together suggests that mobile commerce (m-commerce) could soon start to take off in Brazil, further growing the country’s e-commerce market.

>>>More credit. According to  the Associação Brasileira das Empresas de Cartões de Crédito e Serviços, credit card ownership among Brazilians went up in 2011. The organization surveyed 4,000 Brazilian consumers and found that 72% had either credit or debit cards, up from 68% in 2010. The survey also showed that nearly half of the class C Brazilians who responded had credit cards, up from 38% in 2010. Obviously, credit cards make e-commerce a lot easier, and if this trend continues, even more Brazilian buyers could enter the country’s online marketplace.

To find out how we can help you reach the Brazilian market with an innovative crossmedia or online campaign, please contact us at info@usmediaconsulting.com.

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Brazil’s Hottest Advertising Media

For years, the story from Brazil has been about explosive growth, and 2011 was no different, especially when it came to media. We took a look at a couple of top sources to get a sense of that growth.
Here’s where the media money went, who provided it, how much different media are growing and which media brands in Brazil are the most popular.


Major Money in Media

IBOPE reports that in 2011, total ad spend in Brazil went up 16% to top 88.3 billion reales (US$51 billion). This was less than Brazil’s 19% growth in ad spend in 2010 but still significant.


Online Heats Up Hugely

Both IBOPE and IAB Brasil report that 5.3 billion reales (US$3 billion) was the total ad spend for online in 2011. That’s a huge 69% increase compared to 2010, during which advertisers spent 3.1 billion reales for online advertising. According to IAB Brasil, in 2011 online made up 10% of Brazil’s overall ad spend. Internet ads are also split down the middle in terms of type: 50% of Brazil’s 2011 online ad spend went to search and the other 50% was for display. All of this money moving has clearly attracted big Internet brands to Brazil. LinkedIn opened an office there in September 2011, joining Netflix, Google, Facebook and Yahoo, which are competing with native Brazilian online brands like UOL, iG and Globo.com.


TV Still Looks Good

Not surprisingly, free TV remains the top medium in Brazil in terms of ad spend. IBOPE’s numbers say it commands 53% of the total spend, while pay TV got around 7.2 percent. Big numbers, but slightly less than in previous years. For example, GroupM reported that TV received 64.6% of total ad spend in Brazil in 2010. The lower numbers for 2011 are due to online’s rise and print’s strength in Brazil.


Print Still Has Plenty of Power

IBOPE reported that newspapers brought in 17 billion reales (US$9.8 billion) in 2011 and were #2 in ad spend in Brazil. As a category, Brazilian magazines were slightly behind pay TV in ad spend, with 7.2 billion reales (US$4 billion).
In addition, the Instituto Verificador de Circulação or IVC—which tracks print circulation and revenue in the country—reports that Brazilian newspapers gained 3.5% in circulation in 2011.
Brazilian magazine also broke records in 2011. The IVC reported that the average circulation for magazines in Brazil reached 13,735,919 copies between June 2010 and June 2011, a record amount and a 5% increase compared to the previous period studied, June 2009 to June 2010. The top-selling newspaper in Brasil in 2011 was Super Notícia, a tabloid-style paper which sold 300,000 copies a day. In second place was Folha, with 297,000 copies sold daily.


Best-Liked Brands
Recently, Troiano Consultoria de Marca collaborated with Meio&Mensagem to survey Brazilians about the media brands they most admire. Here’s a quick breakdown:

  • Free TV network: TV Globo
  • Pay TV channel: GNT, which is from the Globosat cable network
  • Magazine: Veja
  • Radio network: CBN
  • Internet portal: Google


Top Advertisers

According to IBOPE, the 5 biggest advertisers in Brazil in 2011 were:

  • Casas Bahia—3.3 billion reales
  • Unilever Brasil—2.6 billion reales
  • Ambev—1.3 billion reales
  • Reckitt Beckiser—1.1 billion reales
  • Hyundai Caoa—1.0 billion reales

Among the other big spenders in Brazil in 2011 were Fiat, Petrobras, Volkswagen, General Motors and Ford.

To find out how we can help you reach the Brazilian market with an innovative media campaign, please contact us at info@usmediaconsulting.com.

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Brazil Has the #6 Economy in the World

The day after Christmas 2011, Brazil received an unexpected present: the Centre for Economics and Business Research (CEBR) proclaimed it the world’s sixth largest economy.
With this ranking, Brazil moved ahead of the United Kingdom but still trails France, the United States and other economic superpowers. Part of the drive forward is due to the economy’s 7.5% growth in 2010 and 3.5% growth in 2011.
For marketing, advertising and media professionals, Brazil’s economic growth has meant more consumers and an ever-expanding media market. Here’s a quick-reference look at the impact of more money on media in Brazil:

Pay TV. In late 2011 Brazil had more than 12.2 million households subscribing to pay TV. But this medium is no longer a luxury restricted to the upper AB classes: pay TV now has 31% penetration in Brazil’s surging Class C. And class C isn’t signing up just for TV: an Ipsos survey in 2011 showed that 33% of new combo packages (TV, Internet and phone) were sold to members of class C.

Internet. Two different projections say that 70-80% of Brazilians households will have Internet access by 2015. As of 2011 there were 67 million households in Brazil, which means at least 46.9 million households will have Internet access. The average household in Brazil has 3 people, meaning that Brazil could go from 78 million Internet users in 2011 to 140 million in just 4 years.

Print. Newspaper circulation in Brazil went up 4% between the first 6 months of 2010 and the same period in 2011 to hit 4.4 million, a new record. Brazil’s magazines set another record in 2011 by taking in nearly $1.3 billion in revenues.

Not all of the final tallies for Brazilian media numbers for 2011 are in yet, but it’s clear that that trend is headed upwards for the near future.

To find out how we can help you reach Brazil with a targeted media campaign, please contact us at info@usmediaconsulting.com.
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How to Reach Brazilians with Media

Not long ago we covered what Brazilians buy, breaking down over 20 recent studies. The next piece of the puzzle is how they use media and what they prefer. The following insights may help marketers, advertising agencies and media professionals create strategies to reach this powerfully growing market.



BLOGS & SOCIAL MEDIA

  • 71% of Brazilians visit blogs*
  • Top topics for Brazilian blogs include entertainment (24%), technology (20%) and education (10%)**
  • The top 3 brands mentioned on Brazilian blogs are Google, Samsung and Apple—these 3 account for 35% of the brand mentions**
  • The remaining 65% of brand mentions on Brazilian blogs include Adidas, Disney, Intel, Microsoft, Sony, Nokia, Amazon, Adobe, Motorola and Blackberry**
  • 79% of Brazilian Internet users are on social networks and their average age is 32**
  • Brazilians spend more time on social media outlets—19% of their overall time online—than people in any other country: in comparison, Americans dedicate 15% of their total time online to social media***
  • Facebook has surpassed Orkut in Brazil: as of August 2011, Facebook had 30.9 million unique users in Brazil compared to 29 million users for Orkut****
  • 61% of Brazilians use social media to find product recommendations and user reviews*****
  • Four out of 10 Brazilian users of social media are fans of products; out of those, 81% are looking at new products from the brands they are fans of*****

*Source: Ipsos
** Source: Boobox
***Source: Experian Hitwise
**** Source: Ibope Nielsen Online
***** Source: Oh!Panel

INTERNET

  • 77.8 million: the total number of Brazilians with Internet access as of the second quarter of 2011*
  • 58 million: the number of Brazilians in households that have computers with Internet access, a 20% increase from 2010*
  • 31.1 million Brazilians visit e-commerce sites every month*
  • Coupon sites in Brazil grew 379% in visitors between May 2010 and May 2011*
  • 60% of class AB Brazilians access the Internet via mobile phones*
  • 36% of class C Brazilians access the Internet via mobile phones*
  • 75% of the page views in Brazil are generated by just 7 Web sites: AOL, Earth, iG, Globo.com, Google (including search, YouTube and Orkut), Microsoft Live and Yahoo**
  • 68% of Brazilian Internet users say that online ads influence their purchasing decisions, more than TV (66%)***
  • 79% of Brazilian Internet users search for products after being impacted by offline media****
  • Top offline media that drive Brazilians to research products online include TV (51%), print (35%) and Out of Home (27%)****
  • The online content about products that Brazilians look for the most are discounts (40%) and product/service information (33%)****
  • Groupon and Peixe Urbano are the top group-buying sites in Brazil*
  • In 2011, Brazilians spent $2 billion on playing online games, with 16% spent on MMO (massively multiplayer online) gaming sites, 15% spent on other types of gaming sites, 11% on social media sites like Orkut and Facebook and 9% on mobile phone games*****

*Source: IBOPE Nielsen Online
**Source: JWT
***Source: Deloitte Media Democracy
****Source: Iprospect and Google Brazil
*****Source: Newzoo



PRINT

  • 73% of Brazilians prefer to get their news from print media rather than online*
  • 21 million Brazilians—11% of the total population—read the newspaper every day*
  • Brazilian magazines grew 5% in circulation between July 2010 and July 2011**
  • Average daily newspaper circulation in Brazil hit a new record in the first 6 months of 2011: 4.4 million copies**
  • Subscriptions to print magazines in Brazil have doubled since 2010***
  • Subscriptions to newspapers in Brazil have increased by 7% since 2010***
  • Online newspaper subscriptions in Brazil increased to 14% between 2009 and 2010***
  • In 2010 Brazil’s magazine titles grew by 2.6% to 4,000, while both circulation and ad revenues for the 100 largest titles grew by 4.5%***
  • Overall, Brazilian magazines will take in $1.269 billion in revenues in 2011, a new record****

*Source: Datafolha
**Source: Instituto Verificador de Circulação
***Source: Deloitte
****Source: Group M


TV

  • 175 million Brazilians (92% of the population) watch TV regularly*
  • 75 million Brazilians (49% of the population) watch TV 3 or more hours a day*
  • Of the 75 million Brazilians who watch 3 hours or more of TV every day, 44.8% are women*
  • 90% of Brazilians say TV is their preferred source for news**
  • Pay TV subscriptions in Brazil grew by 11% in the first five months of 2011, with 1.1 million new subscribers added in that time frame***
  • Pay TV had a penetration rate of 33% among Brazil’s Class C as of mid-2011****
  • Among young Brazilians aged 12-19, TV is the primary source for news (68%), compared to just 20% for Internet and radio (4%)*****
  • 72% of Brazilians get their sports news from TV******

*Instituto Brasileiro de Geografia e Estatística
**Source: Datafolha
***Source: Anatel
****Source: Ipsos
*****Source: TNS Research International
******Source: IBOPE Media

To find out how you can reach Brazil’s high-powered consumer market, contact us at info@usmediaconsulting.com.

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