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How Brazil became an internet advertising powerhouse

Brazil is a making waves in the tech world. A growing number of tech startups are emerging from the Latin American country and it’s investing heavily in tech infrastructure. Small wonder then that online advertising is also on the rise.

In a 2011 survey, IBOPE (a large media and marketing firm in Brazil), sheds some light on why Brazil is showing a surge in advertising spend within their home market.

Total advertising spend in Brazil rose 15.8% year-on-year when comparing the numbers from 2010 to 2011. This huge jump means a move to BRL88.32-billion (US$52.89-billion) spend on advertising with a calendar year.

But how much of that was online?

Online research group eMarketer reports that BRL5.39 Billion (US$3.23-Billion) was online advertising; a massive 70.6% jump from 2010. It must be noted that this number does also include search advertising such as Google AdWords.

So when online advertising goes up; something must come down; so what was affected? Interestingly enough, the only two advertising mediums to show a decrease in revenue were cinema and outdoor advertising. 9-21% and -4.2% respectively).

Part of the reason for the outdoor advertising number taking a drop is because of Brazil’s incredibly strict policies around outdoor advertising — in fact in Sao Paulo there was a strict ban on outdoor advertising in 2007.

eMarketer reports in its forecasts that there will be 86.4 million internet users in Brazil by the end of 2012. These users will be predominantly urban and upwardly mobile. The increase in online spending is therefore indicative of brands trying to reach these consumers as the consumers themselves begin exploring new platforms and technologies.

How do the numbers from another emerging market like South Africa compare?

In the set of numbers above courtesy of Nielsen there was a 29% increase in online advertising from 2010 to 2011. This accounts for a R 173 577 066 increase in digital ad spend from 2010 to 2011. It must be noted that this does NOT include search engine advertising as the Brazil stats do.

Interestingly enough direct mail in South Africa took an impressive nose dive of 50% in revenue year-on-year; with print and television only showing modest increses in advertising revenue.

This percentage change clearly shows people are moving steadily away from traditional marketing (one way marketing) and opting to rather place their marketing spend in mediums where they can chase down a better ROI and report on their investment.

Some interesting advertising facts courtesy of The Media Shop:

  • The Top 10 radio stations are responsible for 69% of the total radio adspend for 2011.

  • Internet is up by 30% overall, but still only accounts for two percent share of voice (SOV)
  • The Top 10 TV channels are accountable for R10-million of the total R14-million adspend.
  • Unilever spend increased by 45% year on year. Their 2011 adspend topped R1.290-billion of which 57% of their adspend was spent on TV.
  • The brands which spent the most money was Pick n Pay at R551.48 million followed by Checkers at R360.31 million and Shoprite at R304.16-million

Author | Jonathan Houston

Jonathan Houston
Jonathan Houston is passionate about digital marketing and digital strategy. During the day, Jonathan is the Head of Digital Marketing for HKLM. Jonathan's work at HKLM includes strategy conceptualization, focusing on the alignment of digital marketing to business strategy as well as assisting HKLM's clients on fulfilling their digital... More
  • steve hawk

    I like hear that Brazil is uprising in the field of 
    tech world. 

    visits:  http://www.razoredgemedia.com/

  • Such a great idea of making use of traditional methods when all are busy in making use of Internet to promote their business. So if your business is small and want to raise it in local area more then making use of television ads, banner at local areas and radios all these be more helpful to get more benefit by spreading business and as business spread local and if liked by people then it will be spread in other areas, states, countries also. So go for small to big by this way. Thanks for sharing this article with us.

  • Pingback: Meet the world’s 10 most Facebook addicted countries | memeburn()

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