In Business Trends & Strategy, Consumer and Retail, General Interest

Television has opened the way to streaming, and radio has opened the way to the podcast. Some opinion leaders have become content creators on various social platforms. This undoubtedly represents a paradigm change in media consumption, with evident challenges for Latin America. In Mexico, 59.5% of the adult population is concerned about the reliability of online news. This percentage is higher in Chile (64.6%), while Brazil is the country most worried about so-called fake news(84%), according to data from We Are Social.

There are also challenges for marketing experts, who are facing new standards of communication and new ways of impacting their audiences. In this regard, at AMI we have identified the region’s main media consumption changes, and the way the advertising industry is reacting.

The Top Selling Products in Latin America

The Top Selling Products in Latin America

Data on purchase patterns and product preferences

LatAm media consumption - TV - Image of reference

#1: Traditional Media Consumption Keeps Declining in Latin America

In 2021, just 22% of Latin American consumers said they read the newspaper, 10% fewer than in 2020, according to the Media Consumption LatAm Report by the firm Sherlock. Similarly, three out of four Latin Americans listened to news on the radio in 2021, 14% fewer than in 2020.

Only in television is the decline minimal: 2% fewer Latin American users watched TV news in 2021 than in 2020. In fact, in 2021, 93% of the Latin American population were still watching television news. Nevertheless, data from GWI reveal that overall (for both news and all other types of programming), in 2021 television is in second place as the medium Latin Americans spend the most time consuming, behind social networks.

GRAPH: LatAm: Average Daily Time Spent with Media Types (h:mm). Latin Americans spent 3:34 hours a day on social media, 02:26 hours a day on traditional television, 1:52 hours a day on on-demand music, and 01:25 hours a day on online TV. Other media included in the graphic are online news (1:48), print media (00:34), video consoles (01:12), podcasts (00:49), and radio (1:00)

How Marketing Experts Are Reacting

Advertising revenues in traditional media fell by 16.7% globally in 2020, according to the firm Magna. Television was the segment hit the least hard (-10.4%), compared with advertising in cinemas and theaters (-72.1%), OOH (out-of-home, -25.6%), radio (-22,9%), and print media (-24.4%). Digital advertising, on the other hand, saw a clear increase of 11.5%.

However, in 2021, advertising in traditional media saw an 8.6% recovery. The clearest case was Brazil. Another report by Magna shows that Brazil has the biggest advertising market in Latin America, accounting for 59% of ad sales in the region. In fact, Brazil is the seventh-largest advertising market in the world.

GRAPH. Brazil: Post-pandemic Ad Revenue  Recovery. In comparison to 2019, in 2020, ad revenue in Brazil dropped down by -7%, and in 2021 it grew up by +8%. For OOH specifically, ad revenue in Brazil dropped down by -24% in 2020 and grew up by +10% in 2021. For radio specifically, ad revenue in Brazil dropped down by -22% in 2020 and grew up by -10% in 2021. For print specifically, ad revenue in Brazil dropped down by -26% in 2020 and growth was -1% in 2021. For TV specifically, ad revenue in Brazil dropped down by -17% in 2020 and grew up by +5% in 2021. For digital, ad revenue growth in Brazil was +8% in 2020 and +12% in 2021. For lineal, ad revenue growth in Brazil was -18% in 2020 and +5% in 2021

Despite the economic recovery, globalization will continue shifting the numbers toward digital. In 2022, revenue from digital advertising will increase by 17% globally, while in traditional media the increase will be 3.7%.In Latin America the increase in digital advertising in 2022 will be 10.7%, and in total, in 2022, investment in digital advertising will reach US$24.24 billion in Latin America.

In 2022, digital advertising in Latin America will see a 10.7% increase to some US$24.24 billion.

LatAm media consumption - Mobile video - Image of reference

#2: The Irreversible Rise of Mobile Video

With average Internet penetration at 73%, Latin America is on course for a digital peak. With its 93% Internet penetration in 2021, Argentina leads the region. Yet Brazil is undoubtedly the most interesting market for marketing experts, thanks to its 85% smartphone penetration level in 2021.

GRAPH. LatAm Internet Penetration by Country, 2021. Argentina leads with 93% internet penetration. Brazil has 71% internet penetration. Chile has 78% internet penetration. Colombia has 63% internet penetration. Mexico has 65% internet penetration. Peru has 68% internet penetration.

These data on penetration are crucial for marketing experts because of the issue of better reaching their target audiences. For example, reports by Penthera show Latin Americans prefer using their cell phones to watch videos, even over connected televisions or PCs.

GRAPH. Platforms Used to Watch Video in Latin America. Mobile devices are used to watch videos by 90% of Latin Americans. Connected TV is used to watch videos by 70% of Latin Americans. The personal computer is used to watch videos by 65% of Latin Americans.

How Marketing Experts Are Reacting

However, despite a clear opportunity, there is a failure to take advantage of this preference for mobile video in all the region’s markets, particularly the largest one. After looking at monthly reports by the firm AdMetricks, we found that Brazil—the country with the highest rate of smartphone adoption in the region—is in fact the market with the least investment in digital advertising on mobile devices (see chart below). Brazil’s advertising share for mobile is 25% compared with 75% of advertising aimed at desktop computers. The same is true in Peru: 28% of advertising is aimed at mobile devices compared with 72% at desktop computers.

GRAPH. Digital Ad Spend Share by Platform in Latin America, 2021. Brazil and Peru are getting behind, as brands are investing the most on mobile devices, only 25% and 28% of ad spend goes to mobile, respectively. The remaining is invested on desktop.

In fact, and despite users reacting better to advertisements in video format for mobile, static advertising continues to predominate in Latin America:

GRAPH. Share of Ad Spend by Format in Latin America, 2021. In Argentina, 67% of ad spent is invested on statics ads, 33% on video ads. In Brazil, 65% of ad spent is invested on statics ads, 35% on video ads. In Chile, 68% of ad spent is invested on statics ads, 32% on video ads. In Colombia, 60% of ad spent is invested on statics ads, 40% on video ads. In Mexico, 62% of ad spent is invested on statics ads, 28% on video ads. In Peru, 62% of ad spent is invested on statics ads, 38% on video ads.
LatAm media consumption - Streaming - Image of reference

#3: Television Is Losing Popularity to Streaming

Streaming is a medium that has gained the outright support of the community in Latin America. The SVOD (subscription video-on-demand) variant is the most popular kind. Between 2019 and 2021, the Latin American SVOD audience grew 40% according to the report by Sherlock Communications. In addition, Statista claims there will be some 68.81 million paid streaming subscriptions in Latin America in 2022. By 2026, paid SVOD subscriptions will have risen to 116 million in Latin America.

In terms of paid streaming or SVOD providers, Netflix will continue to lead the market in Latin America. The 41.02 million Netflix subscribers in 2021 will grow to 49.07 million in 2026, according to Digital TV Research. By contrast, Disney+ is expected to reach 33.28 million subscriptions in 2026, a 17% increase over 2021, occupying second place in the region.

According to data from Digital TV Research, the growth of rivals like Disney+ in Latin America will cause Netflix’s market share to shrink some 15 percentage points between 2021 and 2026, dropping from its current 58% to 43% in Latin America. Conversely, the Disney+ market share will expand from 17% to 29% by 2026.

Subscriptions to Streaming Services in LatAm 2021-2026. Netflix had 37.5 million subscribers in 2020 and will have 49.1 million in 2026. Disney + had 2.2 million subscribers in 2020 and will have 33.3 million in 2026. As for market share, Netflix accounted for 58% of streaming subscriptions in 2020, but this share will drop down to 43% by 2026; Disney + had an 18% share in 2020 and will have a 29% share in 2026. Other streaming providers included in this graphic are Claro Video, HBO, Apple TV and Amazon.

Nevertheless, despite the favorability of paid streaming, subscription models like Netflix are under debate, given that Latin America’s population:

  • Values free content on platforms like YouTube and Facebook
  • Still uses television and prefers it for watching the news

This streaming model is known as AVOD (advertising-based video on demand), and is preferred by 70% of Latin American Internet users, according to Sherlock Communications.

As a case in point, viewing of YouTube in Latin America shot up during the pandemic, revealing viewers’ specific interests. For example, gardening-related videos in Latin America were viewed more than 26 million times in 2021.

GRAPH. Preferred User Video Content, Latin America, 2021. 88% of Latin Americans prefer the subscription to video on demand (SVoD), 70% of Latin Americans prefer the advertising-based video on demand (AVOD), 66% of Latin Americans prefer the cable o satellite TV, 34% of Latin Americans prefer the free TV and 23% of Latin Americans prefer the subscription to ad-based videos.

How Marketing Experts Are Reacting

For marketing experts in Latin America, AVOD is shaping up to be a successful sales model. Sherlock Communications cites the Propmark report, showing that three out of four Latin Americans do not mind watching ads as long as the platforms hosting them are free or low cost. In turn, 83% of Latin Americans surveyed said they want free streaming services.

Data put out by Semana reveal that 37% of YouTube viewers in Latin America say the sponsored/paid content on the platform makes them want to buy the brand’s products.

However, marketing experts need to be careful with the quality of their ads. A recent survey by Penthera revealed Latin Americans’ biggest frustrations when it comes to viewing AVOD advertising: when the ad is repeated over and over again (59%), too many ads (45%) and when the ad fails to load or cuts off (32%). Similarly, 70% of Latin Americans do not feel represented in AVOD ads.

LatAm media consumption - Social media - Image of reference

#4: Social Networks and Digital Marketing Lead the Media Market

Social networks are part of the modern citizen’s daily life, with 72% penetration throughout South America, according to data compiled by We Are Social and Hootsuite. Better yet, YouTube, WhatsApp, and Facebook use is higher than 90% throughout Latin America. Similarly, a user in Latin America spends at least 3.5 hours a day checking their social networks.

For marketing experts, this represents a potential advertising audience of between 60% and 80% of the population in each country on the most popular platforms, i.e., Facebook and YouTube.

GRAPH. Potential advertising audience by country and social network, 2021. In Argentina, for example, 76% of people use YouTube, 87% use Facebook, 45% use Facebook Messenger, 59% use Instagram, 26% use LinkedIn, and 14% use Twitter. The graph also includes the following countries: Brazil, Colombia, Mexico.

How Marketing Experts Are Reacting

Of course, the region’s marketing leaders have been taking advantage of social media for more than a decade. In Colombia, social networks were the most significant channel of advertising investment during the third quarter of 2021; 39.8% of the total invested in digital, according to the Interactive Advertising Bureau (IAB). This represented a 73% increase over 2020.

According to Magna, Latin America recorded a 9% increase in digital advertising during 2020, which is higher than the 8% global average. Advertising on social networks (+16%) and video ads (+15%) were the drivers of this growth. The firm forecasts that, by 2025, digital advertising (which includes social networks) will account for 55% of total advertising investment, finally overtaking the linear formats, including television.

6 Key Digital Marketing Tactics for LatAm

6 Key Digital Marketing Tactics for LatAm

What the data suggests we should focus on

Certain successful digital marketing tactics are derived from the potential in social networks:

  • Alliances with influencers or content creators.As of 2021, there are more than 12 million influencers in Latin America
  • The use of WhatsApp as a channel for closing sales, due to its 90% penetration in Latin America
  • The use of Facebook to generate brand awareness, as 80% of users in Latin America say they are introduced to new brands through this social network

We explain these tactics in more detail in our article Six Key Digital Marketing Tactics to Use in Latin America in 2021.

Next steps

Contáctenos si necesita un estudio sobre el consumo de medios en Latinoamérica para nichos específicos, y el impacto que podría estar teniendo los medios en su audiencia objetivo. Hemos realizado cerca de 3.500 estudios en la región, de los cuales más de 600 se han dedicado al análisis del consumidor latinoamericano. Lo invitamos a revisar algunos casos de estudio en nuestra web.

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