Latin America's Media Market 2013

LATIN AMERICA’S MEDIA MARKET 2013

CONTENTS

Print: Market Indicators of Growth

TV: Trends in Ad Spend & Pay TV

Penetration

Internet: Audience size, future growth, sites

with most reach, user attitudes toward

Internet advertising, average CTRs in region

and in major markets

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

A Growing Consumer Class:

The surge of the class C

Media Penetration in Latin America

Ad Spend Projections for Latam: 2013 and 2014

Social Media: Use, most popular sites, reach,

influence on consumer purchase decisions

Online Videos: The audience, consumption trends

and advertising potencial

A GROWING CONSUMER CLASS: THE SURGE OF CLASS C

Source: The World Bank, Economic Mobility and the Rise of the Latin American Middle Class

1 in 3

Families in Latin America are middle class

In the past decade, more than 50 million people have joined the

middle class in Latin America.

Sources: 1United Nations, 2World Bank, 3Cetelam report O Observador Brasil 2012, 4Consultora W, 5Departamento Administrativo Nacional de

Estadística, 6Asociacion Mexicana de Agencias de Investigacion de Mercados y Opinión Pública, 7Asociación Peruana de Empresas de

Investigación de Mercados, 8Novomerc Chile

7%

21%

3%

31%

7%

13%

47%

55% 52%

33% 32% 28%

0%

10%

20%

30%

40%

50%

60%

Argentina Brazil Chile Colombia Mexico Peru

Classes AB

Class C

LATIN AMERICA’S MIDDLE CLASS (CLASS C) HAS BECOME A SIGNIFICANT PORTION OF THE POPULATION IN SEVERAL KEY MARKETS.

…PARTICULARLY IN BRAZIL. WHY? FIRST, IT’S GROWING RAPIDLY.

105,000,000 Brazilians were Class C in 2011

55% of the population

In 2014

58% of the population

will be Class C

40,000,000

Brazilians joined Class C between 2003-2011

Source: Cetelem BGN Observador Brasil, Fecomercio SP, Data Popular

SECOND, CLASS C IS SPENDING HUGELY:

R$1.089 trillion

2012

Sources: IPC Target, FecomercioSP

R$1.4 trillion*

2015

*more than classes A and B combined!

MEDIA PENETRATION IN LATIN AMERICA

Source: IBOPE Media Book 2012

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%

Penetration by Medium, 2011

TV, OUT-OF-HOME AND RADIO HAVE THE DEEPEST PENETRATION IN MANY LATIN AMERICAN COUNTRIES… BUT INTERNET IS GROWING SIGNIFICANTLY.

AD SPEND PROJECTIONS FOR LATAM: 2013 AND 2014

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

2013 2014

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%

LATIN AMERICA IS THE WORLD’S FASTEST-GROWING REGION IN AD SPEND.

Argentina: up 19.6% in first 9 months of 2012, 31.6% growth in all of 20111

Sources: 1Cámara Argentina de Agencias de Medios, 2WARC, 3Asociación Chilena de Agencias de Publicidad, 4Asomedios, 5Confederación de

la Industria de la Comunicación Mercadotécnica, 6IBOPE Media Panamá, 7Compañía Peruana de Estudios de Mercados, 8Asociación Uruguaya

de Agencias de Publicidad

LATIN AMERICA’S AD SPEND IS GROWING STRONGLY IN ALL MAJOR MARKETS.

Brazil: up 10.7% in 2012, 9.8% projected growth in 20132

Chile: 10.4% increase in all of 20113

Colombia: 8.8% growth in 20114

Mexico: up 14% in all of 20115

Panama: up 7.7% in all of 20116

Peru: up 9% in 20127

Uruguay: up 5.6% in all of 20128

AND BY 2014, BRAZIL WILL BECOME THE #5 AD MARKET IN THE WORLD.

Source: Zenith Optimedia

Rank Country

Ad Spend in 2014 (billions)

#1 United States 173,593

#2 Japan 53,434

#3 China 48,755

#4 Germany 27,548

#5 Brazil 22,216

Source: Cámara Argentina de Agencias de Medios

37.4%

9.4%

35.0%

4.8%

3.2% 5.0%

1.3% 6.1% Free TV

Pay TV

Newspapers

Magazines

Radio

OOH

Cinema

Internet

ARGENTINA AD SPEND SHARE BY MEDIUM, 2011

Source: Projeto Inter-Meios

BRAZIL AD SPEND SHARE BY MEDIUM, 2011

Guides 1.1% OOH 3%

Cinema 0.3%

Radio 3.%

Pay TV 4%

Internet 5.1%

Magazines 7.1%

Newspapers 11.8%

Free TV 63%

Source: Asociación Chilena de Agencias de Publicidad

44.9%

26.6%

6.8%

1.9%

8.6%

0.3% 4.6%

6.2% Free TV

Newspapers

Radio

Magazines

OOH

Cinema

Pay TV

Internet

CHILE AD SPEND SHARE BY MEDIUM, 2011

Source: Confederación de la Industria de la Comunicación Mercadotécnica

56%

8%

7%

8%

6%

8%

Free TV

Radio

Print

Internet

Pay TV

OOH

MEXICO AD SPEND SHARE BY MEDIUM, 2011

Source: Compañía Peruana de Estudios de Mercados y Opinión Pública

49.68%

16.5%

12.1%

3.5%

18.2%

TV

Newspapers

Radio

Internet

Not specified

PERU AD SPEND SHARE BY MEDIUM, 2011

Source: Comité Certificador de Medios ANDA-FEVAP

26.9%

6%

5.6% 23.5%

5.6% 1.5%

10.2%

12.2%

8.5%

Free TV

Internet

Pay TV

Newspapers

Magazines

Cinema

Radio

Direct mail

OOH

VENEZUELA AD SPEND SHARE BY MEDIUM, 2011

PRINT MEDIA IN LATIN AMERICA

• Latin American newspapers will grow in revenue by 5.5% per year through 2016 to reach a total of US$10.4 billion1

• Newspaper circulation went up by 5% in Latin America between 2006 and 20112

• In 2009 magazine ad spend dropped in every region—EXCEPT for Latin America, and it’s forecast to grow through 20161

• Latin American newspaper revenues went up by 65% between 2006 and 20112

• 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 record3

• 11.9% CAGR growth is forecast for newspaper ad spend in Argentina through 20161

• Magazines grew 33.7% in ad spend in Argentina in 20111

• Newspapers grew by 50% in circulation in Peru between 2007 and 20124

Sources: 1PriceWaterhouseCoopers Global Entertainment Media Outlook 2012-2016, 2WAN-INFRA,, 3Instituto Verificador de Circulação, 4KPMG

PRINT IS STILL A STRONG MEDIUM THROUGHOUT LATIN AMERICA. MARKET INDICATORS THAT SUGGEST THIS INCLUDE:

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

Argentina Brazil Chile Colombia Ecuador Peru Venezuela

40%

18%

29%

36%

10%

17%

29%

Print ranks #1 in ad spend share in Argentina and #2 (after free TV) in Brazil, Chile, Colombia, Ecuador, Peru and Venezuela

PRINT ALSO COMMANDS A MAJOR PORTION OF AD SPEND IN MANY LATAM MARKETS.

Print's Share of Ad Spend in Key Latam Markets, 2011

TV IN LATIN AMERICA

37%

63%

45%

49%

56%

47%

54%

Argentina Brazil Chile Colombia Mexico Peru Uruguay

Percentage of TV’s Ad Spend Share, 2011

FREE TV RULES AD SPEND IN MOST OF LATIN AMERICA…

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

Free TV Ad Spend Share in Major Latam Markets, 2011

Sources: 1Dataxis, 2Anatel, 3Centro de Investigación en Innovación en Telecomunicaciones, 4LAMAC, 5IBOPE

pay TV penetration

in Latam by 20171

of homes in Brazil will be subscribed to pay TV by 2018—potential audience of 173 million2

8.5 million homes in Argentina have pay TV service4

Projected penetration

of pay TV in Mexico

in 20133

4.2 million homes in Colombia have pay TV service5


…BUT PAY TV PENETRATION REACHED 50% IN ALL OF LATAM IN FEB 2012 AND IS GROWING RAPIDLY.

68%

90%

50%

INTERNET IN LATIN AMERICA

Sources: Internet WorldStats, comScore, Subsecretaría de Telecomunicaciones, Asociación Mexicana del Internet

28,000,000

1,985,970

85,000,000

9,086,000

25,000,000

2,000,000

4,000,000

4,000,000

1,200,000

2,200,000

1,000,000

40,600,000

663,000

1,500,000

1,523,000

9,900,000

1,698,000

1,855,000

10,900,000

Argentina

Bolivia

Brazil

Chile

Colombia

Costa Rica

Dominican Republic

Ecuador

El Salvador

Guatemala

Honduras

Mexico

Nicaragua

Panama

Paraguay

Peru

Puerto Rico

Uruguay

Venezuela


AS OF 2012, INTERNET COMMANDS A HUGE AUDIENCE IN LATIN AMERICA: 232 MILLION.

Growth projections for specific markets:

Sources: 1LACNIC, 2Comitê Gestor da Internet, 3Pyramid Group, 4Latin America & Caribbean Network Information Centre, 5Comisión Nacional

de Telecomunicaciones de Paraguay


BY 2015, THERE WILL BE 60% INTERNET PENETRATION IN

LATIN AMERICA AND 120 MILLION ADDITIONAL USERS.1

Brazil 168 million by 2014, up from 85 million in 20122

Chile 16.4 million by 2015, up from 9 million in 20123

Ecuador 7.5 million by 2015, up from 4 million in 20124

Mexico 65 million by 2015, up from 40 million in 20124

Paraguay 3.4 million by 2015, up from 1.5 million in 20125

Types of Web Sites with Deepest Reach among

the Region’s Internautas:

Source: Futuro Digital, comScore, March 2012

97.5% 96.3% 96.7% 96.4%

86.3% 85.3%

Portals Search Entertainment Social Media News Community


HERE’S WHERE TO REACH LATIN AMERICA’S INTERNET USERS.

• 67% of female shoppers in Brazil use the Internet as a source before shopping for products and services1

• 95% of Brazilian consumers look for information online before buying a car2

• 68% of Brazilian Internet users say that online ads influence their purchasing decisions3

• 57% of Brazilian Internet users say that Internet ads motivate them to buy the products that are advertised4

Sources: 1Oh! Panel, 2IDG, 3Deloitte Media Democracy, 4IAB Brasil, 5Asociación Mexicana de Internet, 6Estudio Colombiano del Internet 2011

• 75% of Mexican Internet users stop to view online ads5

• 83% of Mexican Internet users recall online ads5

• 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 sites5

• Preferred online ad formats for Colombian Internet users are banners (37%), videos (35%) and sponsored links6

• 7 out of 10 Colombians check opinions and recommendations on social media before buying a product1

• Internet is the #2 medium that motivates Colombians to buy products6

LATIN AMERICANS IN KEY MARKETS ARE WELL-DISPOSED TOWARDS INTERNET ADVERTISING.

Average Click-Thru Rate Latin America North America

Standard banner (overall) 0.14% 0.10%

728X90 0.14% 0.09%

120X600 0.12% 0.07%

160X600 0.15% 0.08%

Mobile banner 0.48% 0.86%

Rich media 0.34% 0.15%

Source: MediaMind Global Benchmarks Report H1 2012

LATIN AMERICANS HAVE SIGNIFICANT HIGHER CTRS THAN NORTH AMERICANS FOR STANDARD BANNERS AND ALSO FOR RICH MEDIA.

Source: MediaMind Global Benchmarks Report H1 2012

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%

728X90 0.13% 0.15% 0.13% 0.13% 0.14% 0.13% 0.25%

120X600 0.11% 0.13% 0.10% 0.12% N/A 0.10% N/A

300X250 0.13% 0.15% 0.17% 0.23% 0.19% 0.17% 0.21% 160X600 0.14% 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

300X250 0.07% 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%

234X60 0.54% 0.55% 0.69% 0.50% 0.96% 0.69% 0.86%

728X90 0.27% 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

300X250 0.42% 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%

IN SEVERAL KEY LATAM MARKETS, FLOATING ADS PERFORM WELL & 300 X 250 STANDARD BANNERS GENERALLY HAVE HIGHER THAN AVERAGE CTRS.

Source: IAB Brasil

42% 55%

3%

Display

Search

Other

BREAKDOWN OF 2011 ONLINE AD SPEND, BRAZIL

Source: IAB Chile

49% 51% Search, Directories,Social

Display

BREAKDOWN OF 2011 ONLINE AD SPEND, CHILE

Source: IAB Colombia

70%

17%

8%

2.50% 1.16% 1.01%

Display

Search

Social media

Video

Mobile

Email marketing

BREAKDOWN OF 2011 ONLINE AD SPEND, COLOMBIA

Source: IAB México

61% 28%

12%

Display

Search

Classified

BREAKDOWN OF 2011 ONLINE AD SPEND, MEXICO

Source: IAB Perú

53% 47% Display

Search

BREAKDOWN OF 2011 ONLINE AD SPEND, PERU

Source: IAB Uruguay

36%

35.60%

19%

3% 3%

2%

5% Display

Search

Production ofmaterialsEmail marketing

Mobile

Services

Other

BREAKDOWN OF 2011 ONLINE AD SPEND, URUGUAY

SOCIAL MEDIA IN LATIN AMERICA

Of Latin American Internet users are on

social media11

Sources: 1comScore, 2Socialbakers

Social media have deep penetration and heavy engagement in the region.

Growth in Facebook users in 2011 in Latin America: more

than 168 million users around the region2

Of total time spent online in Latam is spent on social

media sites1

95% 50% 28%

• 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

Source: Oh! Panel study, May 2011

Social media influence the purchase decisions of 62% of Latin Americans.

• 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: comScore

Facebook is Latam’s America’s most popular social media site but other sites have grown hugely in the region.

5,000% 2,500%

97% 86% 43%

Increase in Unique Visitors, November 2011 to November 2012

ONLINE VIDEOS IN LATIN AMERICA

11.5 million videos watched every month in Argentina, Brazil, Chile and Mexico

Source: comScore

Online video consumption has spiked significantly in Latin America.

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

• Advertisers fail to reach 30% of the audience via just TV but can gain 16% of effective reach by combining TV and online video advertising1

Sources: 1comScore, 2YouTube

Besides growth, online video offers major opportunities for ROI.

Average growth of 37.5%

In online videos watched in Argentina, Brazil, Chile and Mexico

between 2011 and 20121

Brazil is the

6th largest market in the world for

in terms of videos watched2

In 2011, video views on

YouTube grew 67% in

Brazil2

E-COMMERCE IN LATIN AMERICA

Source: América Economía & Visa Latin America E-Commerce study, 2012

26% projected

growth in 2012

E-COMMERCE IN LATIN AMERICA HAS GROWN BY 27 TIMES SINCE 2003.

E-commerce sales in Latam

in 2003: US$1.6 billion

E-commerce sales in Latam in 2011:

US$43 billion

US$69 billion Projected e-commerce sales for

Latin America in 2013

Clothes

Computer electronics

Music, movies or videos

Appliances

Computer hardware

Source: comScore

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

2

3

4

5

6

7

8

9

10

Entertainment tickets

Vacation/travel

Health and beauty care

Books and magazines

Sports and fitness

Sources: 1América Economía & Visa E-Commerce Study, Latin America, 2012, 2e-bit

The percentage of e-commerce sales in

Latin America that are generated in Brazil1

2012 e-commerce sales in Brazil2

Projected 2013 e-commerce sales in Brazil2

BRAZIL IS THE LEADING E-COMMERCE MARKET IN LATIN AMERICA…

59% US$11 billion

US$14 billion

…BUT OTHER LATIN AMERICAN MARKETS ARE POSTING STRONG E-COMMERCE NUMBERS.

Sources: 1América Economía & Visa Latam E-commerce study, 2012, 2Asociación Mexicana del Internet, 3Cámara Argentina de Comercio

Electrónico, 4Cámara Colombiana de Comercio Electrónico,

Mexico • #2 e-commerce market in Latam1

• US$6.2 billion in sales in 2012, 46% growth2

• Top 5 selling products are (#1) plane/train tickets, (#2) tickets to shows, (#3) hotel reservations, (#4) electronics, (#5) clothes2

Argentina • US$3.3 billion in sales in 2012, 32%

growth compared to 20113

• 5 best-selling products are (#1) smartphones, (#2) women’s clothes, (#3) car accessories, (#4) men’s clothes, (#5) home decor3

Colombia • US$2 billion in sales in 20124

Chile • US$1.7 billion in sales in 20121

• 14% growth compared to 20111

LATIN AMERICA’S MOBILE MARKET

MOBILE PENETRATION IN LATIN AMERICA IS AT 105% AND WILL REACH 130% BY 20151.

Sources: 1GSMA, 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

142%

124% 129%

100% 101%

89% 98%

20% 14%

30%

7% 10% 20%

11%

0%

20%

40%

60%

80%

100%

120%

140%

Argentina Brazil Chile Colombia Costa Rica Mexico Peru

Mobile penetration Smartphone penetration

Mobile & Smartphone Penetration in Major Latam Markets

Argentina: 43% increase in tablet sales in 2012: 340,000 units sold1

Sources: 1IDC, 2IT Data, 3GfkChile, 4Gremial de Empresas de Informática, 5Dominio Consultores

TABLET ADOPTION IS LOW COMPARED TO OVERALL POPULATION BUT SALES ARE SPIKING IN SEVERAL LATAM MARKETS.

Brazil: Tablet sales reached 3.1 million in 2012 and are projected to reach 5.1 million in 20132

Chile: 27,300 tablets sold in first quarter of 2012, 11.5% share of portable PC market in the country3

Guatemala: 40,000 tablets sold during Jan-June 2012, 52% more than Jan-June 20114

Peru: Tablet sales increased by 334% in the first half of 20125

Mexico: Tablet sales reached 2.2 million in 2012 and will reach 4.3 million units by 20161

Sources: 1Huawei, 2Convergencia Research, 3COFETEL, 4Ministerio de Transportes y Telecomunicaciones, 5Nokia, 6Unidad Reguladora de los

Servicios de Comunicación

Increase in Argentina’s mobile broadband

subscribers, 2010-20122

Growth in Brazil’s mobile broadband subscribers,

2010-20121

Chile’s growth in mobile broadband connections, 20114

México’s growth in mobile broadband subscriptions,

2011-20123

Increase in Colombia’s mobile Internet use, 20115

Uruguay’s growth in broadband

connections in 20116

MOBILE INTERNET IS GROWING HUGELY IN LATIN AMERICA.

421% 194% 107%

105% 69% 60%

LATIN AMERICANS ARE SHOWING STRONG RESPONSE TO MOBILE ADS.

Sources: 1MediaMinds, 2Hunt Mobile Ads

Average CTR for mobile banners in Latin America, higher than that of Australia, Eastern Europe and most of Asia1

Of Latam mobile device users respond favorablly to geo-targeted ads1

Mobile ad CTR for Colombia2

Mobile ad CTR for Mexico2

Mobile ad CTR for Brazil2

Mobile ad CTR for Argentina2

.60% .56% .61% .52%

33% .48%

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• 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

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