What: Latin American media owners’ net advertising revenues (NAR) to grow by +9.3% in 2018, to US$26.3 billion, following a +7.3% growth in 2017; thanks to a more robust economic recovery in the region, according to MAGNA.
Why it matters: Television remains the top media category in the region with 54% of total advertising sales while Digital advertising in Latin America remains lower than the global average.
MAGNA is expecting Latin American media owners’ net advertising revenues (NAR) to grow by +9.3% in 2018, to US$26.3 billion, following a +7.3% growth in 2017, thanks to a more robust economic recovery in the region. The latest IMF update forecasts real GDP growth of +1.9% next year in the region, compared to +1.7% in 2017 and -0.9% in 2016. Economic recovery remains extremely fragile, however, and political instability continues to loom over several countries, including Brazil.
A +9% growth would not be that impressive considering the high levels of economic inflation in the region, and the growth rates experienced pre-2014 that usually range between 10 and 15%. However, that would the strongest growth rate since 2013.
Ad spend trends continue to vary by country. Digital switch-overs, the introduction of new TV channels, government reconstruction programs in natural disaster areas, and elections are all expected to impact marketing activity and advertising spending. Nevertheless, most LATAM markets are expected to see slightly higher ad spend growth in 2018 versus 2017, as economies in the region are stabilizing and benefitting from the recovery of commodity prices.
Television remains the top media category in the region with 54% of total advertising sales at the end of 2017
Television remains the top media category in the region with 54% of total advertising sales at the end of 2017, way above the global average (35%). Television is forecast to hold its media leadership until 2021, when digital finally becomes the top media format in Argentina and Brazil. Free-to-air TV is the dominant segment (+4% in 2018) controlling 80% of total TV NAR but Pay TV is experiencing faster growth (+6% in 2018) as subscription fees and programing are gradually becoming more attractive. Another driver is the change in selling models, from a cable model (where advertisers buy packaged airtime with little control over which channels their campaign appear on) to a direct sales model (where advertisers and agencies buy from individual Pay TV vendors). This is taking place in Chile and Uruguay, for example.
Television will benefit from increased viewing and brand interest around the FIFA World Cup as usual, although the excitement may not be quite as high as four years ago when the tournament was hosted by Brazil; time difference may also be an issue but the event is still guaranteed to boost TV ad sales especially in the eight nations that qualified this year: Brazil, Argentina, Uruguay, Colombia and Peru in South America, as well as Mexico, Costa Rica and Panama for Central America.
Digital advertising in Latin America remains lower than the global average, inhibited by a relatively low digital penetration and the sheer power of television. It is expected to grow by +23% to reach 32% total media share at the end of 2018, still well below the global average of 44%. Social media (+30%) and digital video (+33%) will grow significantly again next year, while search (+21%) remains the number one media type with 36% of total digital ad sales.
With BRL 49 billion in NAR (approx. $14 billion), Brazil is the sixth largest advertising market in the world and accounts for over half of LATAM’s advertising spend.
Brazil’s economy has begun to stabilize from the recession in 2015 and 2016. Real GDP will grow by +1.5% in 2018, accelerating mildly after the stabilization of 2017 (+0.7%) and the severe recession of 2016 (-3.6%), while Consumer Price Index (CPI) inflation has dropped from its peak of 9% in 2015 to just 4% expected in 2018. Media cost inflation, on the other hand, remains high (between 6% and 10% across media categories). Business confidence however, continues to be hindered by political instability with unelected President Michel Temer, successor to impeached president Dilma Rousseff, himself facing various corruption scandals. The next presidential election, scheduled for October 2018, will hopefully clarify the political environment but is not expected to directly affect advertising spend, as parties are not allowed to buy television advertising time.
In that mixed environment, MAGNA anticipate media owner NAR to grow by +11.8% in 2018 following a decent performance in 2017 (+9.7%). That will be driven by strong digital growth (+23%) coupled with robust TV ad sales: +5.4% for free-to-air channels and +9.2% for pay TV. The FIFA World Cup, which will air on Globo, SporTV, and FOX Sports, will help drive cost inflation (CPM +9%) and offset declines in viewing.
Mobile advertising is growing dramatically (+52% in 2017) and now accounts for over 55% of digital advertising expenditures in Brazil. Internet and mobile penetration rates reached around 60% in 2017 and will continue to grow over the next five years. Google, Facebook, and YouTube dominate the search, social, and video markets, reaching of over 90% of the total internet audience.
Digital advertising in Latin America remains lower than the global average, inhibited by a relatively low digital penetration and the sheer power of television.
Mexican media companies’ net advertising revenues will grow by +5% in 2018, to 92 billion pesos (approx. $4.9 billion). Mexico’s participation to the FIFA World Cup typically drives TV ad sales up, but that may not be enough to prevent TV NAR from decreasing (-1% to $43 billion pesos). Presidential elections are scheduled that take place in July 2018 but should not have a direct impact on TV revenues as political parties are not allowed to buy commercial air time beyond the free minutes allocated by Law.
Ad growth will be primarily driven by a +16% growth in digital ad sales (rising to a 31% market share) while print NAR will decrease by -5%, radio will increase by +5% and OOH NAR will grow by almost +8%.
The extinction of analogue terrestrial broadcasting at the beginning of 2016 disrupted television reception and introduced new digital channels competing with incumbent broadcasters Televisa and Azteca. That in turn created audience fragmentation and cost inflation (20%+) in Free TV CPMs as well as in digital video. CPM inflation has nevertheless cooled down in 2017 and will remain moderate in 2018 (+5%)
Online Video has been growing faster than any other ad format and already accounts for 32% of digital advertising, more than double its global share of 13%. Alongside Youtube, Facebook is becoming another important video advertising platform, especially in Mexico, where the social network has close to 80 million monthly active users. In addition, Mexico has one of the highest smartphone penetrations, driving mobile ad sales to grow by +22% in 2018, accounting for 64% of ad spend.
Advertising sales in Argentina will grow by +24% in 2018 to reach 100 billion pesos (approx. $6.7 billion at a constant average 2016 exchange rate).
The economy began to stabilize in 2017, when real GDP grew by +2.5%, and 2018 is expected to see continued economic growth and gradual slowdown in the inflation rates. CPI inflation is expected to slow from 27% in 2017 to 18% in 2018, and will continue to drop over the next five years.
Nominal advertising sales growth, which peaked at 47% in 2014, when inflation was around 40% per year, will thus also stabilize over the next five years, to around 10% per year.
Television is still the largest media in Argentina, accounting for 36% of total advertising sales. Newspapers remain relatively strong too with a market share of 19% at the end of 2017, significantly higher than regional and global averages (5% and 8% respectively); however the slow nominal growth rate (3% in 2018) means that the category is quickly losing share. TV NAR is expected to grow by 29% in 2018, driven by the FIFA World Cup and the last-minute qualification of the national squad.
Digital advertising is more developed than in the rest of Latin America. It already accounts for 32% of total advertising sales at the end of 2017, and will surpass television NAR by 2019.
Colombia’s net advertising revenues (NAR) will grow by +5.2% in 2018 to reach COP 4.8 trillion pesos (approx. $1.6 billion). The Colombian ad market ranks 4th in the region, behind Brazil, Argentina and Mexico.
Pay TV channels control more than half of TV NAR in Colombia, due to high multichannel penetration and reach. In 2018 Pay TV ad sales will grow by +7% and account for 58% of TV ad spend, while Free TV will grow by just +3%.
Digital media advertising is still very under-developed, accounting for 16% of total ad spend. It is the fastest growing media though (+27%), growing from a small base.
Furthermore, Colombia is in the process of a digital switch-over, expected to be completed by December 31, 2019. Television signals are currently offered in Simulcast (analogue and digital), allowing for everyone to continue watching terrestrial TV, a frequency resource to accommodate analogue and digital, and a transition period to full digital.
A new free national TV network, Canal Uno, was launched in August 2017 by Plural Comunicaciones. Although Canal Uno aims to become a competitor to the commercial duopoly of RCN and Caracol, Canal Uno cannot compete yet in terms of coverage. However, as the digital switchover transition progresses, there are expectations it could reach 90% of the population by the end of 2018.
Some of Latin America’s other smaller markets will continue to experience ad spend growth.
Editorial Staff– 6 things to know, Advertising Technologies, Argentina, Brazil, digital media, Hispanic Media, Hispanic TV, Latin America, MexicoTags: ad spend growth, Argentina, Brazil, Colombia, Digital media, latam, Latin American media, Magna, Mexico, net advertising revenues (NAR), television
Brazil’s indigenous communities fear mining threat over war in Ukraine
Maurício Ye’kwana worries about the future. He comes from the community of Auaris, in northern Brazil, close to the border with Venezuela.
The area, part of the Yanomami Indigenous Territory, is rich in gold, diamonds and minerals – and illegal miners want a piece of it. In all, there are an estimated 20,000 illegal miners on the land.
“It’s got worse in the past few years,” Maurício says, explaining that during the pandemic, the number of planes, helicopters and boats linked to illegal mining increased.
He’s only 35, but it’s the younger generation that concerns him – boys increasingly being lured into illegal work.
“The young people are the best boat drivers,” he says. They can earn as much as 10,000 Brazilian reais ($2,140; £1,645) for a single trip.
Maurício has come to Brasilia to take part in the Free Land Camp, an annual event that brings together indigenous communities looking to defend their land rights.
On Brasilia’s main esplanade, a grand avenue that leads to Congress and the presidential palace, communities from across the country have erected hundreds of tents.
Milling around the camp are indigenous Brazilians, many of them wearing feathered headdresses, intricate beaded jewellery and painted with geometric tattoos identifying their tribe.
This year, the event has taken on an even bigger meaning.
President Jair Bolsonaro has made it his mission to push economic development in the Amazon. In his latest attempt to make inroads into indigenous territories, he has cited the war in Ukraine. Brazil relies heavily on imported fertilisers for its agribusiness industry – more than 90% of its fertilisers come from abroad, and Russia is its most important partner.
“A good opportunity arose for us,” Mr Bolsonaro said of Russia’s invasion of Ukraine. He has argued that by mining in indigenous territories, Brazil can build more of its own potassium reserves.
It’s an argument questioned by some experts.
“Only 11% of the reserves are inside indigenous lands and other states like São Paulo and Minas have reserves,” says politician Joenia Wapichana, the first indigenous woman voted into Congress in 2018. “It’s a false narrative that tries to confuse the minds of the Brazilians, making them believe it’s important, that people won’t have food on their table.”
Also, it’s not a short-term fix.
“From a technological and environmental perspective, the licences needed and the infrastructure – it all takes time. Being able to offer these products to the Brazilian market would probably take seven to 10 years,” says Suzi Huff, Prof of Geology at the University of Brasilia. “We’re talking about an extremely sensitive area in which care needs to be taken. It’s false to say that it will solve Brazil’s problems.”
The bill has been in the works since 2020. But last month, the lower house voted to consider it under emergency provisions, removing the need for committee debates.
“It’s very clearly blackmail,” says Prof Huff. “Bolsonaro saw an opportunity to continue with this project of allowing mineral exploration including in indigenous lands and used the scarcity of fertilisers in Brazil to move forward with this project.”
It was expected to be voted on in the lower house this week, but that hasn’t happened – and few believe, in this election year, that it will. Not even the big players in the industry agree with it, with the Brazilian Institute of Mining last month saying it was a bill “not suitable for its intended purposes”, and calling for broader debate.
While a delay in voting is seen as a relief by indigenous leaders, it’s still a challenge on the ground.
“A fiery political discourse encourages invasions in indigenous lands,” says Joenia Wapichana. “The fact that Bolsonaro says he supports mining, that he will regulate mining in indigenous lands already exposes the indigenous people and makes them more vulnerable.”
The discourse is, of course, deeply political, especially with elections around the corner. On Tuesday, former president Lula da Silva – and the man leading in the polls to win October’s vote – made a visit to the camp.
“Today the headlines are about a government that doesn’t have scruples when it comes to offending and attacking the indigenous communities who are already on this land,” he said.
The response was huge cheers of “out with Bolsonaro” – but there are still six months until the elections. And this is Brazil – much can change in politics here, and the future of Brazil’s indigenous tribes is more uncertain than ever.
Homes engulfed as deadly landslide hits Colombia
A landslide triggered by heavy rains has killed at least 14 people in central Colombia, officials say.
Another 35 people were now in hospital after several homes were engulfed in the Dosquebradas municipality, Risaralda province, on Tuesday.
The officials issued a photo showing a gash in the lush foliage covering a mountain overlooking the area.
Other residents living close to a swollen river nearby have been moved to safety.
Rescue teams have been searching in the mud for more survivors, Colombia’s disaster management officials said.
“A very loud noise scared us. We went out and saw a piece of the mountain on top of the houses,” taxi driver Dubernei Hernandez told the AFP news agency.
“I went to that place and it was a disaster, with people trapped.”
Mr Hernandez said he helped dig up two bodies and a survivor. At least five homes were buried by the mud, he added.
There are fears that the death toll will rise further.
Landslides are common in Colombia and houses built on steep hillsides are at particular risk during the country’s rainy season.
In 2019, at least 28 people were killed after a landslide hit the south-western Cauca province.
Two years earlier, more than 250 people were killed when a landslide hit the town of Mocoa, in the southern Putumayo province.
Mexico violence: Third journalist killed this year
A Mexican journalist has been shot dead in the northern border city of Tijuana, officials say, the third journalist to be killed in the country this year.
Lourdes Maldonado López, who had decades of experience, was attacked in her car as she arrived home on Sunday.
She had previously said she feared for her life, and was enrolled in a scheme to protect journalists, activists said.
The country is one of the world’s most dangerous for journalists, and dozens have been killed in recent years.
Many of those targeted covered corruption or powerful drug cartels. Campaigners say the killings are rarely fully investigated, with impunity virtually the norm.
The motive for Maldonado’s killing was not clear and no-one has been arrested.
During a news conference in 2019, Maldonado asked President Andrés Manuel López Obrador for his “support, help and labour justice” because, she said, “I fear for my life”.
She was referring to a labour dispute with Jaime Bonilla, who was elected governor of Baja California state later that year as a candidate from the president’s Morena party. Mr Bonilla, who left office late last year, owns the PSN media outlet, which had employed Maldonado.
Maldonado had sued the company for unfair dismissal and, last week, said she had won the lawsuit after a nine-year legal battle. Mr Bonilla and PSN have not commented.
Rights group Article 19 said she had previously been attacked because of her work and was registered in the Mexican government’s programme to protect journalists.
The campaign group Committee to Protect Journalists (CPJ) said it was “shocked” by the murder.
The killing came six days after photojournalist Margarito Martínez was shot dead outside his home in Tijuana. He covered crime in the city, with his work appearing in national and foreign media.
A week earlier, José Luis Gamboa Arenas was found dead with stab wounds in the eastern city of Veracruz. An editor at the Inforegio and La Notícia news websites, he often wrote articles about organised crime and violence.
Exact numbers of victims are hard to come by as investigations often get nowhere, and different studies apply different criteria in counting the dead.
According to Article 19, 24 journalists were killed between December 2018, when President López Obrador took office, and the end of 2021.
Australia3 years ago
Button and Diane Powellpark the school bus after three decades
Australia3 years ago
Button and Diane Powellpark the school bus after three decades
Europe1 year ago
Covid: Flights shut down as EU discusses UK virus threat
Europe1 year ago
Post-Brexit trade: Is red tape chaos just ‘teething trouble’ as the UK government argues?
Tech2 years ago
Search engine startup asks users to be the customer, not the product
Health1 year ago
Spain ‘to register’ those who refuse to have Covid-19 vaccine
Arts4 years ago
How a chain-link mosque at the Vancouver Biennale became a community hub
Tech5 months ago
Sign up to The Independent’s free cryptocurrency expert panel event