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4 Reasons to Look at Online Videos in Latam When Planning for 2013

A new study from comScore called Tuning In: The Rise of Online Video en Latin America underscores the surge in popularity of online videos in Latin America—and their impact on advertising. Below we break out the study’s most important points to highlight the 4 reasons you should take advantage of this ad platform in 2013.

#1 A Growing Audience
In December 2011, Brazilian Internet users watched 4.7 billion online videos, 74% more than in December 2010. Mexican Internet users increased their online video consumption by 80% between December 2010 and December 2011 to reach 3 billion videos viewed. Argentine internautas are also avid online video watchers: they reached a total of 1.5 billion videos watched in December 2011, a 75% increase compared to December 2010. However, Chileans grew the most in this category: they upped their online video consumption by 91% between December 2010 and December 2011 to reach 1 billion videos watched.
Essentially, there’s been an enormous upswing in online video watching in the biggest 4 Internet markets in Latin America.

#2 Broad Reach
According to comScore, online videos have 85% reach with Internet users in the U.S. and 84% reach among Internet users worldwide.
In contrast, online videos reach 96% of Argentine Internet users, 92% of Chilean Internet users, 81% of Brazilian Internet users and 82% of Mexican Internet users.
Doing the math reveals:

  • Argentina has 28 million Internet users* and 96% of that total is 26.8 million
  • Brazil has 85 million Internet users** and 81% of that total is 68.8 million
  • Mexico has 40.6 million Internet users*** and 82% of that total is 33.2 million
  • Chile has 10 million Internet users* and 92% of that total is 9.2 million

Sources: *Internet World Stats, **comScore, ***AMIPCI

Adding up these totals means that you can reach 138 million people with online video in just these 4 markets—without counting the millions of Internet users in the rest of Latin America.

#3 Room to Grow
In these 4 countries, each viewer spends an average of 11 to 13 hours a month watching online videos, while in the United States, a more mature market, viewers spend 22 hours per month watching online videos. This means that there is good potential for online videos to take up more and more online time of Latin American Internet users. The same applies when you look at the amount of videos watched per user: between 120 and 168 per month in these 4 countries, compared to 245 online videos per month in the U.S.

#4 Market Evolution
First, numbers from IBOPE show that free TV has a penetration of over 90% in Argentina, Brazil, Chile and Mexico. Numbers from LAMAC show that pay TV is growing its reach in these countries: 74% penetration in Argentina, 61% in Chile and 40% in both Brazil and Mexico.

Beyond the reach of TV, a comScore study shows that 71% of online video viewers do this because they missed an episode of a TV show and 57% watch online videos for convenience. Only 38% watch online videos to avoid commercials. In addition, online video watchers indicate in surveys that they are open to seeing at least 6.5 minutes more per hour of ads.

Finally, according to comScore, advertisers fail to reach at least 30% of the audience via just television. On the other hand, according to comScore’s projections, the effective reach of the target audience can go up by 16% when advertising on TV is combined with online video ads. This could be why more American advertisers are investing more in online videos: they spent $1.8 billion in 2011 on online video ads, a 40% increase compared to 2010.

Without a doubt, we’ve been able to help various firms take advantage of the reach of online video in Latin America through our Jumba Video Network.

To explore how we can help you reach Latin America via online video or another medium, please contact us.

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What Brazilian Consumers Want

Recently the Brazilian research firm Cetelem BGN released its annual Observador report, based on interviews with consumers in 70 cities throughout the country. We went through the 100-page report to give advertisers, marketers and media professionals a breakdown of the key findings.

Classe C Still Surging
Brazil’s economic transformation in recent years has been dramatic. In 2005, 51% of the population was made up of people from classes D and E, while 34% were from the classe C middle class and 15% were from the upper AB classes. Yet in 2011, the middle class became the majority in Brazil, 54% of the population. These days, 103 million middle class or classe C Brazilians are now the dominant consumer segment.

Purchase Intent
When asked what they definitely intend to buy in the coming months, the top categories among Brazilians were furniture (31%), appliances (30%), travel (25%), TV/video products (19%), cell phones (17%) and computers (16%). Classes AB—42 million people—showed the strongest intent to spend money on travel, furniture and appliances.

Internet Access
Cetelem BGN’s results show that Internet penetration in Brazil is 44%, a figure in line with that of comScore, which estimates that 85 million Brazilians out of a total population of around 193 million have Internet access. At 43%, classe C’s Internet penetration rate is almost the same at the rate for the entire country.

E-commerce
More and more Brazilians are using the Internet to research products before buying and they do this most often when buying electronics, travel products and cultural products. Overall, 23% of Brazilians report that they buy products online, which means that 44 million people in Brazil engage in e-commerce. The two main promotional features that Brazil’s online shoppers value the most are promotional discount periods (66%) and free shipping (48%).
Most Brazilian Internet shoppers (81%) use credit cards while 46% use boletos bancários (online payment voucher) and 11% use crediário, a type of credit system based on installment payments.

Credit Cards
According to O Observador 2012, 33% of Brazilians own a credit card and 35% have debit cards, while 18% have store credit cards. Even among the AB classes of Brazil, the Observador survey shows credit card penetration to be 57%. Among Brazilian credit card owners nearly half (47%) own one and 31% own two, with only 3% owning 5 or more. For most items in Brazil, such as food, clothes, household bills, cell phones, gas, medicines and entertainment, cash is by far the preferred payment method.

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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Internet Ad Spend in Latam Grew Massively in 2011

Between 2010 and 2011, online ad spend grew by a whopping 117% in Argentina, according to the Cámara Argentina de Agencias de Medios (Argentine Chamber of Media Agencies). The sector posted spend of 528 million pesos (US$121 million) in 2010, then jumped to 1.1 billion pesos (US$250 million) in 2011. While this huge leap is due in part to inflation and lots of political advertising during an election year, it’s still quite impressive.

Other Surging Latin American Markets in Online Ad Spend
Argentina is far from the only Latin American country in which the Internet grew powerfully in ad spend in 2011. According to Projeto Inter-Meios, online ad spend grew by 19% in Brazil in 2011, while IAB Brasil indicates that the spend was split more or less evenly between display and search.

While figures for Mexico’s online ad spend for 2011 aren’t yet available, we were able to get figures for other key markets:

• Chile: 30% growth, US$82 million spent for online ads in 2011
• Colombia: 33% growth, US$70.5 million spent for online ads in 2011
• Peru: 37% growth, US$24 million spent for online ads in 2011
• Uruguay: 50% growth, US$7 million spent for online ads, 2011

To find out how we can help you reach Latin America via a strategic online campaign, please contact us at info@usmediaconsulting.com.

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