LATIN AMERICAS MEDIA MARKET 2013

CONTENTS
A Growing Consumer Class: The surge of the class C Internet: Audience size, future growth, sites with most reach, user attitudes toward Internet advertising, average CTRs in region and in major markets Social Media: Use, most popular sites, reach, influence on consumer purchase decisions

Media Penetration in Latin America

Ad Spend Projections for Latam: 2013 and 2014

Online Videos: The audience, consumption trends and advertising potencial

Print: Market Indicators of Growth

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

TV: Trends in Ad Spend & Pay TV Penetration

A GROWING CONSUMER CLASS: THE SURGE OF CLASS C

In the past decade, more than 50 million people have joined the middle class in Latin America.

1 in 3
Families in Latin America are middle class
Source: The World Bank, Economic Mobility and the Rise of the Latin American Middle Class

LATIN AMERICAS MIDDLE CLASS (CLASS C) HAS BECOME A SIGNIFICANT PORTION OF THE POPULATION IN SEVERAL KEY MARKETS.
60% 50% 40%

55%

52%

47%

33% 31%
30%

32%

28%
Classes AB Class C

21%
20%

13%
10% 0%

7% 3%
Argentina Brazil Chile Colombia

7%

Mexico

Peru

Sources: 1United Nations, 2World Bank, 3Cetelam report O Observador Brasil 2012, 4Consultora W, 5Departamento Administrativo Nacional de Estadstica, 6Asociacion Mexicana de Agencias de Investigacion de Mercados y Opinin Pblica, 7Asociacin Peruana de Empresas de Investigacin de Mercados, 8Novomerc Chile

PARTICULARLY IN BRAZIL. WHY? FIRST, ITS GROWING RAPIDLY.

40,000,000 105,000,000
Brazilians were Class C in 2011

Brazilians joined Class C between 2003-2011

of the population

55%

In 2014
Source: Cetelem BGN Observador Brasil, Fecomercio SP, Data Popular

of the population will be Class C

58%

SECOND, CLASS C IS SPENDING HUGELY:

2012

R$1.089 trillion R$1.4 trillion*

2015

*more than classes A and B combined!

Sources: IPC Target, FecomercioSP

MEDIA PENETRATION IN LATIN AMERICA

TV, OUT-OF-HOME AND RADIO HAVE THE DEEPEST PENETRATION IN MANY LATIN AMERICAN COUNTRIES BUT INTERNET IS GROWING SIGNIFICANTLY.
Penetration by Medium, 2011
Free TV Argentina
95%

Pay TV
71%

Radio
68%

Newspapers
43%

Magazines
21%

OOH
91%

Internet
54%

Brazil
Chile Colombia Costa Rica

97%
99% 94% 97%

35%
60% 78% 58%

76%
73% 68% 77%

34%
48% 39% 81%

40%
35% 32% 13%

86%
90% 91% 94%

44%
64% 63% 41%

Ecuador
Guatemala Mexico Panama

98%
85% 97% 94%

24%
63% 36% 50%

80%
86% 54% 62%

65%
74% 27% 69%

41%
8% 27% 12%

99%
99% 98% 70%

55%
26% 48% 51%

Peru
Puerto Rico

98%
87%

64%
54%

84%
84%

69%
73%

23%
22%

100%
97%

60%
44%

Source: IBOPE Media Book 2012

AD SPEND PROJECTIONS FOR LATAM: 2013 AND 2014

LATIN AMERICA IS THE WORLDS FASTEST-GROWING REGION IN AD SPEND.

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 Latin America North America Western Europe Central & Eastern Europe Asia Pacific Middle East, North Africa Rest of World 10% 4% 3% 9% 7% 2.8% 9.3%

2014 9% 5% 3% 9.9% 8% 2.3% 10%

LATIN AMERICAS AD SPEND IS GROWING STRONGLY IN ALL MAJOR MARKETS.

Argentina: up 19.6% in first 9 months of 2012, 31.6% growth in all of 20111 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
Sources: 1Cmara Argentina de Agencias de Medios, 2WARC, 3Asociacin Chilena de Agencias de Publicidad, 4Asomedios, 5Confederacin de la Industria de la Comunicacin Mercadotcnica, 6IBOPE Media Panam, 7Compaa Peruana de Estudios de Mercados, 8Asociacin Uruguaya de Agencias de Publicidad

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

Ad Spend in 2014 (billions) Rank Country #1 #2 #3 United States Japan China 173,593 53,434 48,755 27,548 22,216

#4
#5

Germany
Brazil

Source: Zenith Optimedia

ARGENTINA AD SPEND SHARE BY MEDIUM, 2011

1.3% 6.1% 3.2% 5.0% Free TV Pay TV Newspapers 37.4% Magazines Radio OOH 35.0% 9.4% Cinema Internet

4.8%

Source: Cmara Argentina de Agencias de Medios

BRAZIL AD SPEND SHARE BY MEDIUM, 2011

OOH 3% Radio 3.% Pay TV 4% Internet 5.1%

Cinema 0.3%

Guides 1.1%

Magazines 7.1%
Newspapers 11.8% Free TV 63%

Source: Projeto Inter-Meios

CHILE AD SPEND SHARE BY MEDIUM, 2011

0.3%

6.2% 4.6%

Free TV Newspapers Radio 44.9% Magazines

8.6% 1.9% 6.8%

OOH
Cinema Pay TV 26.6% Internet

Source: Asociacin Chilena de Agencias de Publicidad

MEXICO AD SPEND SHARE BY MEDIUM, 2011

8%

6%
8% 56%

Free TV Radio Print

7%

Internet
Pay TV

8%

OOH

Source: Confederacin de la Industria de la Comunicacin Mercadotcnica

PERU AD SPEND SHARE BY MEDIUM, 2011

18.2% 3.5% TV

49.68%
12.1%

Newspapers

Radio
Internet 16.5% Not specified

Source: Compaa Peruana de Estudios de Mercados y Opinin Pblica

VENEZUELA AD SPEND SHARE BY MEDIUM, 2011

Free TV 8.5% 12.2% 26.9% Internet

Pay TV
Newspapers Magazines

10.2%

Cinema

6%
1.5% 5.6% 23.5%

Radio Direct mail OOH

5.6%

Source: Comit Certificador de Medios ANDA-FEVAP

PRINT MEDIA IN LATIN AMERICA

PRINT IS STILL A STRONG MEDIUM THROUGHOUT LATIN AMERICA. MARKET INDICATORS THAT SUGGEST THIS INCLUDE:
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 regionEXCEPT for Latin America, and its 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 Circulao, 4KPMG

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

Print's Share of Ad Spend in Key Latam Markets, 2011
40% 36%

29%

29%

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

18% 17% 10%

Argentina

Brazil

Chile

Colombia

Ecuador

Peru

Venezuela

Sources: Cmara Argentina de Agencias de Medios, Projeto Inter-Meios, Asociacin Chilena de Agencias de Publicidad, Asomedios, Ipsa Group Latin America, Compaa Peruana de Estudios de Mercados y Opinin Pblica, Comit Certificador de Medios ANDA-FEVAP

TV IN LATIN AMERICA

FREE TV RULES AD SPEND IN MOST OF LATIN AMERICA

Percentage of TVs Ad Spend Share, 2011 Free TV Ad Spend Share in Major Latam Markets, 2011
63% 56% 54% 47%

49%
45% 37%

Argentina

Brazil

Chile

Colombia

Mexico

Peru

Uruguay

Sources (left to right): Cmara Argentina de Agencias de Medios, Projeto Inter-Meios, Asociacin Chilena de Agencias de Publicidad, Asomedios, Confederacin de la Industria de la Comunicacin Mercadotcnica, Compaa Peruana de Estudios de Mercados, Asociacin Uruguaya de Agencias de Publicidad

BUT PAY TV PENETRATION REACHED 50% IN ALL OF LATAM IN FEB 2012 AND IS GROWING RAPIDLY. Percentage of TVs Ad Spend Share, 2011

68% 90%

pay TV penetration in Latam by 20171

8.5 million
homes in Argentina have pay TV service4

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

4.2 million
homes in Colombia have pay TV service5

50%

Projected penetration of pay TV in Mexico in 20133

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

INTERNET IN LATIN AMERICA

AS OF 2012, INTERNET COMMANDS A HUGE AUDIENCE IN LATIN AMERICA: 232 MILLION. Percentage of TVs Ad Spend Share, 2011
Argentina Bolivia Brazil Chile Colombia 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 28,000,000 1,985,970 85,000,000

Costa Rica
Dominican Republic Ecuador El Salvador Guatemala Honduras Mexico Nicaragua Panama Paraguay

Peru 9,900,000 1,698,000 Puerto Rico Uruguay 1,855,000 Venezuela 10,900,000

Sources: Internet WorldStats, comScore, Subsecretara de Telecomunicaciones, Asociacin Mexicana del Internet

BY 2015, THERE WILL BE 60% INTERNET PENETRATION IN 1 LATIN AMERICA AND 120 MILLION ADDITIONAL USERS. Percentage of TVs Ad Spend Share, 2011
Growth projections for specific markets:
Brazil Chile Ecuador Mexico 168 million by 2014, up from 85 million in 20122 16.4 million by 2015, up from 9 million in 20123 7.5 million by 2015, up from 4 million in 20124 65 million by 2015, up from 40 million in 20124

Paraguay

3.4 million by 2015, up from 1.5 million in 20125

Sources: 1LACNIC, 2Comit Gestor da Internet, 3Pyramid Group, 4Latin America & Caribbean Network Information Centre, 5Comisin Nacional de Telecomunicaciones de Paraguay

HERES WHERE TO REACH LATIN AMERICAS INTERNET USERS. Percentage of TVs Ad Spend Share, 2011
Types of Web Sites with Deepest Reach among the Regions Internautas:
97.5% 96.3% 96.7%

96.4%

86.3%

85.3%

Portals

Search

Entertainment

Social Media

News

Community

Source: Futuro Digital, comScore, March 2012

LATIN AMERICANS IN KEY MARKETS ARE WELLDISPOSED TOWARDS INTERNET ADVERTISING.

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 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

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

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

Average Click-Thru Rate Standard banner (overall) 728X90 120X600 160X600 Mobile banner Rich media

Latin America 0.14% 0.14% 0.12% 0.15% 0.48% 0.34%

North America 0.10% 0.09% 0.07% 0.08% 0.86% 0.15%

Source: MediaMind Global Benchmarks Report H1 2012

IN SEVERAL KEY LATAM MARKETS, FLOATING ADS PERFORM WELL & 300 X 250 STANDARD BANNERS GENERALLY HAVE HIGHER THAN AVERAGE CTRS.
Average Click-Thru Rate Standard banner (overall) 728X90 120X600 Argentina 0.13% 0.13% 0.11% Brazil 0.14% 0.15% 0.13% Central America 0.15% 0.13% 0.10% Chile 0.12% 0.13% 0.12% Colombia 0.13% 0.14% N/A Mexico 0.15% 0.13% 0.10% Peru 0.19% 0.25% N/A

300X250
160X600 Rich Media Enhanced std. banner 728X90 120X600 300X250 Polite Banner

0.13%
0.14% 0.42% 0.07% N/A N/A 0.07% 0.18%

0.15%
0.12% 0.22% 0.11% N/A N/A N/A 0.11%

0.17%
0.17% 0.45% 0.09% 0.08% 0.06% 0.17% 0.15%

0.23%
0.23% 0.25% N/A N/A N/A N/A 0.17%

0.19%
0.17% 0.72% N/A N/A N/A N/A 0.16%

0.17%
0.17% 0.44% 0.09% 0.08% 0.06% 0.17% 0.15%

0.21%
0.18% 0.58% N/A N/A N/A N/A N/A

Floating Ad
Expandable Formats 234X60 728X90 160X600 300X250 PushDownBanner

1.93%
0.43% 0.54% 0.27% N/A 0.42% 0.36%

0.44%
0.31% 0.55% 0.40% 0.23% 0.20% 0.17%

2.59%
0.54% 0.69% 0.48% 0.32% 0.55% 0.27%

N/A
0.23% 0.50% n/A n/A 0.43% n/A

3.23%
0.61% 0.96% N/A N/A N/A 0.26%

2.59%
0.53% 0.69% 0.43% 0.32% 0.56% 0.27%

1.01%
0.68% 0.86% 0.99% N/A 0.36% 0.26%

Source: MediaMind Global Benchmarks Report H1 2012

BREAKDOWN OF 2011 ONLINE AD SPEND, BRAZIL

3%

Display

42% 55%

Search Other

Source: IAB Brasil

BREAKDOWN OF 2011 ONLINE AD SPEND, CHILE

51%

49%

Search, Directories, Social Display

Source: IAB Chile

BREAKDOWN OF 2011 ONLINE AD SPEND, COLOMBIA

2.50% 1.16% 8% 1.01%
Display Search Social media

17% 70%

Video

Mobile
Email marketing

Source: IAB Colombia

BREAKDOWN OF 2011 ONLINE AD SPEND, MEXICO

12%
Display

28%

Search

61%

Classified

Source: IAB Mxico

BREAKDOWN OF 2011 ONLINE AD SPEND, PERU

47%

53%

Display Search

Source: IAB Per

BREAKDOWN OF 2011 ONLINE AD SPEND, URUGUAY

2%
5%
Display Search

3%

3%

19%

36%

Production of materials Email marketing Mobile Services

35.60%

Other

Source: IAB Uruguay

SOCIAL MEDIA IN LATIN AMERICA

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

95%
Of Latin American Internet users are on social media11

50%
Growth in Facebook users in 2011 in Latin America: more than 168 million users around the region2

28%
Of total time spent online in Latam is spent on social media sites1

Sources: 1comScore, 2Socialbakers

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

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 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: Oh! Panel study, May 2011

Facebook is Latams Americas most popular social media site but other sites have grown hugely in the region.
Increase in Unique Visitors, November 2011 to November 2012

5,000%

2,500%

97%

86%

43%

Source: comScore

ONLINE VIDEOS IN LATIN AMERICA

Online video consumption has spiked significantly in Latin America.

11.5 million videos watched every month in

Argentina, Brazil, Chile and Mexico

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

Source: comScore

Besides growth, online video offers major opportunities for ROI.

Average growth of 37.5%
Brazil is the

6th largest market in the world for

in terms of videos watched2

In online videos watched in Argentina, Brazil, Chile and Mexico between 2011 and 20121
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

In 2011, video views on YouTube grew 67% in Brazil2

E-COMMERCE IN LATIN AMERICA

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

26%
projected growth in 2012
Source: Amrica Economa & Visa Latin America E-Commerce study, 2012

US$69 billion
Projected e-commerce sales for Latin America in 2013

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

Clothes Computer electronics Music, movies or videos Appliances

6 7

Entertainment tickets Vacation/travel Health and beauty care Books and magazines

3
4

8
9

Computer hardware

10

Sports and fitness

Source: comScore

BRAZIL IS THE LEADING E-COMMERCE MARKET IN LATIN AMERICA

59%
The percentage of e-commerce sales in Latin America that are generated in Brazil1

US$11 billion

2012 e-commerce sales in Brazil2

US$14 billion

Projected 2013 e-commerce sales in Brazil2

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

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

Chile
US$1.7 billion in sales in 20121 14% growth compared to 20111

Argentina
US$3.3 billion in sales in 2012, 32% growth compared to 20113 5 best-selling products are (#1) smartphones, (#2) womens clothes, (#3) car accessories, (#4) mens clothes, (#5) home decor3

Colombia
US$2 billion in sales in 20124

Sources: 1Amrica Economa & Visa Latam E-commerce study, 2012, 2Asociacin Mexicana del Internet, 3Cmara Argentina de Comercio Electrnico, 4Cmara Colombiana de Comercio Electrnico,

LATIN AMERICAS MOBILE MARKET

MOBILE PENETRATION IN LATIN AMERICA IS AT 105% AND WILL REACH 130% BY 20151.
Mobile & Smartphone Penetration in Major Latam Markets
142% 140% 120% 124% 129% 100%

100%
80% 60%

101% 89%

98%

40%
20% 0%
Argentina Brazil

30% 20% 14% 20% 7%

Chile Colombia

10%
Costa Rica Mexico

11%
Peru

Mobile penetration

Smartphone penetration

Sources: 1GSMA, Comisin Nacional de Comunicaciones de Argentina, Anatel, Subsecretara de Telecomunicaciones, Ministerio de Tecnologas de la Informacin y las Comunicaciones, Ministerio de Ambiente, Energa y Telecomunicaciones, Superintendencia de Telecomunicaciones, Pyramid Research, Superintendencia de Telecomunicaciones, Unin Internacional de Telecomunicaciones, Everis, Oficina de Desarrollo de las Telecomunicaciones de la UIT, El Ministerio de Transportes y Comunicaciones, Instituto Nacional de Estadsticas, Comisin Nacional de Telecomunicaciones, Vision Mobile, Google, 3D Chile, LG Mobile Colombia, IDC, Futuro Labs

TABLET ADOPTION IS LOW COMPARED TO OVERALL POPULATION BUT SALES ARE SPIKING IN SEVERAL LATAM MARKETS.
Argentina: 43% increase in tablet sales in 2012: 340,000 units sold1 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: 1IDC, 2IT Data, 3GfkChile, 4Gremial de Empresas de Informtica, 5Dominio Consultores

MOBILE INTERNET IS GROWING HUGELY IN LATIN AMERICA.

421%
Growth in Brazils mobile broadband subscribers, 2010-20121

194%
Increase in Argentinas mobile broadband subscribers, 2010-20122

107%
Mxicos growth in mobile broadband subscriptions, 2011-20123

105%
Chiles growth in mobile broadband connections, 20114

69%
Increase in Colombias mobile Internet use, 20115

60%
Uruguays growth in broadband connections in 20116

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

LATIN AMERICANS ARE SHOWING STRONG RESPONSE TO MOBILE ADS.

Of Latam mobile device users respond favorablly to geo-targeted ads1 Average CTR for mobile banners in Latin America, higher than that of Australia, Eastern Europe and most of Asia1

33%

.48%

.60%

.56%

.61%

.52%

Mobile ad CTR for Colombia2

Mobile ad CTR for Mexico2

Mobile ad CTR for Brazil2

Mobile ad CTR for Argentina2

Sources: 1MediaMinds, 2Hunt Mobile Ads

Brazils Media Market 2013

Key Trends, Data Points and Impact on Consumer Purchase Decisions

CONTENTS
Ad Spend in Brazil 2005-2012 , fastest-growing media, future projections
Internet in Brazil: growth, usage, influence of Internet ads on purchases E-commerce: buying patterns and hottest-selling products Social Media: usage, top sites, influence on consumer purchase decisions

Media Penetration in Brazil

Print Media in Brazil: growth and consumption

TV: growth, usage and penetration

Online Video: Brazils audience, video consumption and potential for advertisers Mobile Market: Shopping habits and attitudes towards mobile ads of Brazilian smartphone users

Radio: penetration, listener profile, reach

EXECUTIVE SUMMARY
Ad spend has grown over 100% since 2005 and Brazil will be the #5 ad market in the world by 2014 Internet and Pay TV are the fastest-growing media in ad spend: they have grown by 15% and 13% in 2012 Print is NOT dead in Brazilprint media growing in circulation (4.4 million in 2011 + 2% gain in 2012), penetration and earning record revenues (magazines earned 1.3 billion reais in 2011) TV and radio retain strong penetration and influence, and pay TV will have 90% penetration by 2018 There are 85 million Internet users in Brazil 68% of Brazilian women research online before buying products 68% of Brazilians say Internet ads influence their purchases and Internet affects their views of products Brazilians are shopping online more than ever and buy 4 key products the most Mobile penetration is 130%, 2.5 million tablets sold in Brazil in 2012 94% of Brazils 27 million smartphone owners view mobile ads and over 66% make mobile purchases

A GROWING CONSUMER CLASS: THE SURGE OF CLASS C

CLASS B IS RESPONSIBLE FOR THE MOST CONSUMPTION IN BRASIL

D, 4% E; 0.1% A1, 3% C2, 9% A2, 16%

C1, 17% B2, 26% B1, 25%

Source: FecomercioSP

BUT CLASS C IS KEY FOR MARKETERS. WHY? FIRST, ITS GROWING RAPIDLY.

40,000,000 105,000,000
Brazilians were class C in 2011

Brazilians joined Class between 2003-2011

of the population

55%

In 2014
Source: Cetelem BGN Observador Brasil, Fecomercio SP, Data Popular

of the population will be Class C

58%

SECOND, CLASS C IS SPENDING HUGELY:

R$1,089,000,000,000
Class C will spend $1.089 trillion reais in 2012, then

Source: IPC Target

THIRD, CLASS C WILL SPEND A LOT MORE, VERY SOON.

R$1,460,000,000,000
By 2015 Class C will spend R$1.46 trillion, more than classes A and B combined

Source: FecomercioSP

Ad Spend in Brazil

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

Ad Spend in 2014 (billions) Rank Country #1 #2 #3 United States Japan China 173,593 53,434 48,755 27,548 22,216

#4
#5

Germany
Brazil

Source: Zenith Optimedia

IN JUST 3 YEARS, AD SPEND IN BRAZIL WILL GROW BY 45%: US$15.3 BILLION TO US$22.2 BILLION

22.2 15.3

16.2

2011
Source: Zenith Optimedia

2012

2014

IN THE FIRST 6 MONTHS OF 2012, INTERNET WAS THE FASTEST-GROWING MEDIUM IN AD SPEND IN BRAZIL

Newspapers 2.93%

Out-ofhome 6.7%

Radio 8.8%

Free TV 13%

Pay TV 15%

Internet 15.46%

Source: Projeto Inter-Meios

INTERNET AND PAY TV GREW THE MOST IN AD SPEND IN 2011MORE THAN TWICE THE AMOUNT OF FREE TV.
20.00%

19.60% 17.80%

15.00%

12% 9.10%
10.00%

5.00%

3.48%
-6.30% -2.50%

3.80%

3.90%

0.00%

Newspapers

Magazines

-5.00%

-10.00% Source: Projeto Inter-Meios

Out of Home

Internet

Guides

Free TV

Cinema

Pay TV

Radio

BUT FREE TV LED 2011 AD SPEND SHARE IN BRAZIL.

OOH 3% Radio 3.% Pay TV 4% Internet 5.1% Magazine 7.1% Newspapers 11.8% Free TV 63%

Cinema 0.3%

Guides 1.1%

Source: Projeto Inter-Meios

2012 Media Penetration Rates in Brazil

Source: IBOPE Media Book 2012

Print Media in Brazil

Newspapers are surging

BRAZILIAN NEWSPAPERS CIRCULATION GROWTH, 20121

1.8%

3.5%

BRAZILIAN NEWSPAPERS, CIRCULATION GROWTH, 20111

OF BRAZILIANS READ NEWSPAPERS2

46%

Sources: 1Instituto Verificador de Circulao, 2Secretaria de Comunicao Social da Presidncia da Repblica

and so are magazines

13.7
39% 45%
AVERAGE CIRCULATION BRAZILIAN MAGAZINES 2011NEW RECORD1

MILLION

GROWTH IN MAGAZINE PENETRATION, 2011 TO 20122

1.3 BILLION REAIS

63%
MAGAZINE PENETRATION CLASSES AB2

38%
MAGAZINE PENETRATION CLASS C2

REVENUES FOR BRAZILIAN MAGAZINES IN 2011, A NEW RECORD1

Sources: 1Instituto Verificador de Circulao, 2Estudos Marplan EGM Next Gen 2012

TV in Brazil

Free TV commands a huge audience in Brazil

175 MILLION
BRAZILIANS WATCH TV REGULARLY

90%
OF BRAZILIANS SAY TV IS THEIR PREFERRED NEWS SOURCE1
Sources: 1Datafolha, 2Instituto Brasileiro de Geografia e Estatstica, 3IBOPE

5 HOURS 28 MINUTES Average time spent watching TV in Brazil3

but pay TV is growing strongly.

14.5 MILLION BRAZILIAN HOUSEHOLDS SUBSCRIBE TO PAY TV: 90% will have it by 20181

17%
Pay TV ad spend increase in 20112

15%
Pay TV ad spend increase in 20122

30%
OF PAY TV SUBSCRIBERS ARE CLASS C

Sources: 1Agncia Nacional de Telecomunicaes (Anatel), 2Projeto Inter-Meios, 3 Associao Brasileira de TV por Assinatura

Radio in Brazil

Radio has deep penetration in Brazil.

Radio is present in

9 out of 10 Brazilian
homes
1
1 2

75% of Brazilians say they have listened to the radio in the past 7 days, which ranks radio #3 in terms of media consumed in Brazil2 49% of Brazilians with cell phones that allow them to listen to the radio, do so2

Sources: Levantamiento Scio Econmico do IBOPE Media, Target Group Index do IBOPE Media

Brazilian radio delivers a range of interesting market segments.

80% of the 29.9 million cars in Brazil have a radio In cars, most listeners are men of AB classes between 25 and 54 (32%)2 Most radio listeners are women CDE classes (36%)
2 1

On public transportation, 63% of radio listeners are young people 20-342

Fontes:1Instituto, 2IBOPE

Internet in Brazil

The Internet audience in Brazil grew by 157% between 2006 and 2012 and will nearly double 2 years from now.

In 2012 there were

85 million
Internet users in Brazil1

By 2014 80% of Brazilian households will have Internet access2 This means Brazils Internet audience will reach 154 million2

Sources: comScore, Comite Gestor da Internet

Other key data points to consider:

15 million access the Internet via mobile devices or Lan Houses1

70 million
Brazilians are active Internet usersaccessing from either home or work1
Sources: 1IBOPE, 2comScore, 3Teleco

16.5 million Brazilians visited travel sites to plan travel in July 201218% increase from July 20112 Brazil will have 73 million mobile broadband subscribers by the end of 2012421% growth compared to 20103

Internet ads hugely influence the purchase decisions of Brazilians. Heres why:

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

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

Sources: 1IDG, 2Oh! Panel

Internet also helps close the sale:

68% of Brazilian Internet users say that online ads influence their purchasing decisions1 57% of Brazilian Internet users say that Internet ads motivate them to buy the products that are advertised2

56% of Internet users in Brazil say that Internet ads motivate them to visit online stores2 56% of Brazilian social media users say they use social media to buy products3
Sources: 1Deloitte Media Democracy, 2IAB Brasil, 3Oh! Panel

In addition, offline media drive the effectiveness of online campaigns in Brazil.

79% of Internet users in Brazil search for products after being impacted by offline media

Top offline media that drive Brazilians to search products online are TV (51%), print (35%) and Out of Home (27%)

Source: Iprospect & Google Brazil

Top Activities Among Brazilian Internet Users:

1 - SHOP 2 LOOK FOR DEALS 3 SOCIAL MEDIA
31 million Brazilians visit e-commerce sites every month1

Coupon sites in Brazil grew by 379% between May 2010 and May 20112
97% of Brazilian Internet users are on social media3 Blogs have 96% penetration rate among Brazilian Internet users*** and 91% penetration rate among Brazilian executives4 Brazilians spent $2 billion playing online games in 20115 Brazil leads Latam in number of online videos watched and in number of unique viewers3

4 READ BLOGS
5 PLAY GAMES 6 WATCH VIDEOS

Sources: 1JWT, 2IBOPE, 3comScore,4CDN, 5Newzoo

E-Commerce in Brazil

E-commerce in Brazil grew in 2012 to reach US$11 billion and will reach US$14 billion in 2013.
Top categories with Brazilian online shoppers:
Electronic appliances (15% of sales) Computers (12% of sales) Electronics (8% of sales) Fashion & accessories (7%)

79% of Brazilians surveyed by Mobile Entertainment Forum in 2011 said they use their cell phones in some phase of purchase process 72% of Brazilians surveyed in 2011 by Associao Brasileira das Empresas de Cartes de Crdito e Servios had a credit or debit card
Source: e-bit

Social Media in Brazil

Social Media have deep penetration and brand engagment.

97%
of Brazils online population is on social media1

77%
of Brazilians who have a Facebook account interact with a brand online2

58%
of Brazilians who use Twitter read posts from their favorite companies2

Source: 1comScore, 2ExactTarget

Social media also significantly impact the purchase process.

61% of Brazilians look for product information on social media pages before buying1 42% of Brazilian consumers between 25 and 44 make a purchase after receiving a marketing message through a social network2

Source: 1Oh! Panel study, 2ExactTarget

Facebook is the #1 social media site in Brazil but other sites are growing rapidly
Social Media Site Growth in Brazil, 2011

428% 338%

206%

LinkedIn
In Oct 2012 LinkedIn reached 10 million members in Brazil
Source: comScore

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Online Videos in Brazil

Brazil has the largest audience for online videos in Latin America.
There are 42.9 million unique online video viewers in Brazil1
84%: the reach of online video in Brazil, an audience of 68 million, larger than the Internet audience of Mexico and Argentina combined2 5.4 billion online videos were viewed in Brazil in August 2012, a 74% increase compared to August 20111

Sources: 1ComScore, 2YouTube

Beyond growth, online video offers superb ROI potential.

19% growth
in online video viewers in Brazil between 2010 and 20111
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

Brazil is the

6th biggest market in the world for

based on video views2

In 2011, YouTube grew by 67% in video views in Brazil2

Mobile Use in Brazil

Brazils mobile market is surging powerfully.

130%
55%
By 2015
Overall mobile penetration in Brazil1

14% 77%

Smartphone penetration in brazil, 20122

Of cell phones in Brazil have web access3

Increase in smartphone sales in 2012 vs. 20114

57%

Of cell phones sold in Brazil will be smartphones4

Sources: 1Agncia Nacional de Telecomunicaes (Anatel), 2Google, Our Mobile Planet, 3Nielsen, 4IDC Brasil

14% smartphone penetration in Brazil means a market of 27 million smartphone owners. Heres how they use their phones to shop.

80% 31%
66%

Research products or services on their phones

94%
3 of 4

Notice mobile ads

Have bought products using theirs phone

Performed a mobile search after seeing an ad

of Brazilian smartphone owners make purchase once a month

Once they sought information about businesses, 66% of Brazilian smartphone owners visited the business
Source: Google, Our Mobile Planet 2012

Tablets are also taking off in Brazil.

Tablet sales in Brazil will total units in 2012, compared to 450,000 in 2011, a 400% increase1

3.1 million

42% of non-computer web traffic in Brazil is from tablets, 54% from mobile phones2

Sources: IDC Brasil, comScore

As a result, mobile Internet is surging gigantically in Brazil.

60% of class AB Brazilians access the Internet via mobile phones, while 36% of class C Brazilians do this1
In 2011, mobile Internet service subscriptions in Brazil increased by 99.8%2 By 2016, 21% of all Internet traffic in Brazil will be from mobile devices like mobile phones and tablet computers3

Sources: IBOPE/Nielsen Online, Paulo Bernardo, Communications Minister of Brazil, Cisco

About US Media Consulting

Launched in 2003, US Media Consulting is a leading media services firm that specializes in building links to reach Brazil, Latin America and U.S. Hispanics
Starting with a clients goals, we devise media solutions that deliver powerful results via strategic media selection and execution
Our team specializes by media typeincluding Internet, online video, mobile, SEM, print, broadcast and OOH For agencies and advertisers, our expertise streamlines campaign execution while maximizing impact For media owners, we add sales firepower through specialists across the region and in all of our core markets See www.usmediaconsulting.com for more information