In Part 1 of my blog series on Brazil, I looked at how consumers use the internet and digital media - specifically video. In this post I am looking at the digital advertising industry in Brazil - the investment in advertising and the big players.
Digital Ad Spend
Brazil is becoming an increasingly lucrative market for the digital advertising industry. When it comes to digital ad spend, this country is way ahead of the game in its region, with an estimated half of digital ad spend in Latin America coming from Brazil. eMarketer predicts a 77% increase in ad spend from 2012 to 2015 and an expected $4.94bn in spend by 2018. The chart below gives us a closer look.
(Stats for chart from eMarketer)
To put this into context, this year the investment in digital advertising in Brazil is more than three times that of Mexico, and 10 times the amount of Argentina. Brazil’s double-digit gains will continue, pushing total investment in Latin America to $9.35bn by 2018. Despite this, when we look at the grand scheme of things, Latin America will still claim just 4.4% of the global digital ad spend market in 2018.
Mobile Ad Spend
Brazil is taking the lead in digital advertising spend in Latin America, and the same trend is also being seen more specifically in mobile internet ad spend, with Brazil now accounting for 43% share of the total Latin American market.
Take a look at the chart below which shows the estimated ad spend on mobile internet display advertising in Brazil (data from eMarketer). As you can see, it’s estimated that investment will increase fivefold between now and 2018.
Why the investment?
Brazil has the fifth largest internet audience in the world and is third place in terms of time spent online, behind the U.S. and China (comScore). 40% of Latin America’s 169 million internet users are in Brazil. It’s estimated that around 55% of Brazil’s population are internet users, with desktop taking a 77% share of that traffic, and mobile taking 23%.
Online video an increasingly popular channel
In December 2014, 65.5 million unique online video viewers aged 6 and older lived in Brazil, translating to 86.5% of internet users in the country - the highest penetration rate of any market studied (eMarketer - data from comScore).
Engagement with video advertising is good too. In September 2014, Brazil boasted the highest completion rate of any country for video ads served by DoubleClick. Brazil’s 87.1% video ad completion rate was nearly 41% higher than the worldwide average (eMarketer).
Increased use of mobile
In 2013, sales of smartphones in Brazil grew by 123% with over 35 million of these devices sold to consumers. The lowered cost of smartphones and rapid expansion of mobile networks and 3G has clearly contributed to this. To find out more about this click here. It is expected that the number of mobile phone users in Brazil will reach almost 170 million by 2018.
The digital advertising landscape
One of the biggest ad networks in Latin America (second only to Google) is RedMas, which reached 103.8 million users in March 2014. RedMas serves the US Hispanic and Latin American markets and have offices in the USA, Argentina, Chile, Mexico, Peru, Venezuela and soon, Brazil. Samba Ads was the first video advertising network in Latin America (established in 2012), and have a particularly strong focus on Brazil. By 2013, Samba Ads had served over 100 million video ads across their network. Other ad networks serving Brazil include Batanga, Alcance Media, Pulpo Media and Impaktu.
Below are the top digital publishers in Brazil and the number of display ad impressions they served from Jan-Dec 2013. Data from ComScore.
Microsoft Sites 94.7m
Terra - Telefonica 90.3m
Google Sites 81.6m
Yahoo Sites 36.7m
R7 Portal 29.6m
IG Portal 23.3m
Grupo Abril 7.9m
Below are the top online advertisers in Brazil and the number of display ad impressions they served from Jan-Dec 2013. Data from ComScore.
Netflix, Inc. 18.5m
Microsoft Corp 12.1m
Itau Unibanco 11.2m
Net Servicos 10m
Despite some doubts in 2013 about Latin America adopting RTB and programmatic standards, it is estimated that programmatic display ad spending in Brazil will grow over the next few years. Latin America in general holds a small share of the total programmatic market worldwide (5%), but research from IDC predicts substantial growth in the next few years. The chart below illustrates.
(Stats for chart from eMarketer)
As you can see, total spend from both Brazil and the rest of Latin America will soar from now until 2018, with the biggest growth seen from last year to this year (2015) at a 579.7% rate for Brazil and 598.9% increase for Latin America.
For what was once a relatively modest market, Brazil is quickly maturing. With a substantial growth in ad spend year on year, and the move towards a programmatic environment, it’s certainly a market that’s setting up for an influx of opportunistic advertisers and media agencies. To read about why Brazil is an emerging market in terms of digital consumption, read my previous post.