Digital Ad Spending in Latin America Forecast to Grow 14 Percent in 2019: Report

Molnia/Getty Images
     

A report from eMarketer foresees that digital platforms will claim nearly one-third of all spending in the region by the end of this year.

Digital ad spending in Latin America is expected to grow 14.1% in Latin America in 2019, according to a new report by market research company eMarketer, which forecasts that advertisers will spend $9.17 billion in the region. Digital platforms will take in nearly one-third of all media spending in Latin America, the analysts predict.

“Digital advertising in Latin America remains lower than the global average, inhibited by relatively low digital penetration and the sheer power of TV within the region,” states the report. “However, as more people come online for the first time, brands are making digital an integral part of their media strategy to better connect and engage with consumers across all channels.”

The eMarketer study found that display advertising driven primarily by video and social media will account for over 57% of total digital ad spending this year in Latin America, followed by search (37.1%) and classifieds (5.5%).

Continued investment in digital infrastructure, improved mobile internet access, less-expensive data plans and rapid smartphone adoption have impacted mobile advertising growth throughout Latin America, the report notes, predicting that this year, mobile’s share of digital ad spending will account for 62.7% of digital investments.

The report is based on analysis of 4,138 metrics from 129 sources, including macro-level economic conditions, advertising market trends, reported revenues from major ad publishers, estimates from other research firms, consumer media consumption; and usage trends and interviews with executives at ad agencies, brands and media publishers.

“Despite the economic crisis in a number of countries—where traditional media expenditures continue to fall—digital keeps growing,” Juan Carlos Göldy, founder and CEO of Logan, a mobile marketing agency in Latin America, is quoted as saying in the report. “The cost to reach consumers on digital platforms is much cheaper than more expensive means [traditional media], and in light of the crisis, money was moved from out-of-home [OOH] and TV ads to more cost-effective ad formats. That is where digital won out.”

The report states that “Latin America’s macroeconomic environment remains fairly fragile as political instability looms over severalcountries. The International Monetary Fund (IMF) expects the region to post 2.0% growth this year, partly due to a more positive outlook for Brazil’s market-friendly reforms and stronger economic output from Chile (3.4%), Colombia (3.3%) and Peru (3.8%). However, political uncertainty looms in Mexico because of the new administration’s policies, while the effects of Argentina’s 2018 recession continue to wreak havoc on the Argentinean peso and investor confidence.”

The analysts reported that “Mexico sits comfortably ahead of Argentina in total media and digital ad spending after we revised our Argentina estimates to better reflect the country’s hyper-inflationary environment and made adjustments based on more reliable estimates of after-discount advertising spending.”

But the study also noted that although Argentina’s advertising market declined 35.3% in 2018, they “expect it to slowly rebound this year,” although further growth beyond that remaining “fairly muted.”

The eMarketer analysts “remain optimistic” that overall paid media spending in the region will continue to steadily grow, predicting overall spending will rise to $32.81 billion by 2023.