March 17, 2014

Mobile Hotspots: Latin America 2014

By Hisham Isa, Vice President (Marketing)

Rising smartphone penetration and cheaper phones are leading mobile advertisers to take a fresh look at Latin America, where there are now more mobile devices than people.

Brazil and Mexico are attracting the most attention.

But we are also seeing significant advertiser interest in Argentina, Costa Rica, Columbia and Guatemala.

In the fourth quarter of last year, the BuzzCity Network served nearly 3.5 billion ads across the region, up 55% from the previous quarter. We expect more than 4 billion impressions in the first quarter of this year.

Let's keep this in perspective, though. Latin America still accounts for just 5% of global traffic. The top ten African markets deliver nearly 4 times as many ads as the top ten Latin American ones. And three markets – Brazil, Mexico and Argentina -- account for half the region's mobile ad traffic.

But recent trends are leading advertisers to view Latin America as one of the last emerging mobile markets (along with the Middle East).

Smartphones Lead the Way

For a start, smartphone sales in Latin America nearly doubled in the last quarter of 2013, according to a Gartner report.

Taking a look at our data, in the graph below you can see how smartphone penetration – most of which consists of Android-powered devices – has risen dramatically in just a matter of months, from about 10% to 40% in Brazil and Guatemala and to about 60% in Colombia and Mexico.

As we've seen in other markets, cost is a key factor for consumer participation. When phone and data prices drop – and mobile plans are clearly presented – consumers flock to the mobile internet . . . particularly if there is good local content.

Brazil meanwhile has one of the world's fastest average download speeds -- 21MB per second – tying Hong Kong for third place and trailing only Australia and Italy. A word of caution, though, in case you're headed to Brazil for the World Cup this year: coverage might be spotty; Brazilians spend just 45% of their time online connected to 4G networks.

So who's surfing?

In our top markets, Latin American mobile users are generally men in their 20s. But this is of course a generalisation. Here are a few numbers that both prove the point and highlight exceptions:

  • In Colombia, Brazil and Mexico, men account for 2 out of every 3 mobile surfers. About 40% of these men are in their 20s.
  • But in Argentina, where ad prices are generally higher, women account for 42% of the market.
  • In Costa Rica, this figure rises to 45%.
  • And in Guatemala, 74% of mobile users are under the age of 30.

Who's advertising?

As is typical for 'newer' markets, the biggest category of advertisers consists of companies selling mobile content. But consumer brands from a number of other industrries – including finance, F & B, health care and travel – are also taking to mobile. Online classifieds – always a good indicator of behavior, because they're interactive with people replying to ads and making their own posts – are also popular.

BuzzCity has also asked consumers about their purchasing plans. About 1/5th of respondents in both Argentina and Brazil plan to buy a vehicle in 2014. In Mexico, 16% of mobile consumers say they will buy a PC, laptop or tablet.

In all three markets, job placement firms take note: 21 – 24% plan to get a new job this year.

All in all, mobile – and the mobile internet – are becoming more and more a part of daily life throughout the Americas. If you're not already producing content or advertising in these markets, you should be.