25 Oct 2013

New Market Research Opportunities in South America

With global ad spend on the increase, is market research fuelling a push into new markets?

Global advertising expenditures have seen strong growth in the first half of 2013, compared to 2012. Despite the European economic crisis continuing to affect the market with a 6% decrease in spend there, Latin America saw an impressive upswing at 13.1%.

Overall, global ad spend grew 3.5% for Q2 in 2013 and for the January to June period, was up 2.8% compared to the same time last year. Total ad spend is expected to reach $160.7bn in the second half of 2013, according to the Nielsen’s latest Global Adview Pulse Lite.

At 13.1%, Latin America attracted a large share of advertising investments; including a whopping 30% growth in spend in Argentina. Asia-Pacific experienced nearly 6% growth, with Indonesia, China and the Philippines all showing double-digit increases in spend. By contrast, North America saw less than 4% growth, despite the momentum in the U.S. advertising market.

It is these developing markets that companies are looking to grow their businesses in that are interesting for market researchers. Reliable data on customer segments and buying behaviour is not as easily accessible in Latin America when compared with more advanced regions such as Europe and North America. So, global advertisers are increasingly relying on their own market research to identify opportunities and challenges in emerging markets. When developing their strategies, translation and transcreation (or cultural adaptation of marketing messages) will be key to advertising success.

According to Neilsen, the type of advertising being utilised by companies in these markets is still in traditional formats such as television, newspapers, magazines and radio, but with an increasing amount of Internet advertising; Asia-Pacific and Latin America both experienced huge growth in this area, with year on year gains of 43% and 38.5% respectively. This strategy is obvious when looking at the number of internet users in Central America (52 million) and South America (189 million). These regions have much more potential in the future as the internet penetration in the two areas is very low at 32% for Central America and 48% for South America.

In terms of the type of goods and industries, Industry & Services and FMCG (fast moving consumer goods) saw the greatest growth in global ad spend at 7.2 and 5.7%, respectively.

FMCG makes up the biggest spend in the global advertising market in 2013, with a 21.3% share of spend. Other notable industries that are still spending heavily on advertising are Entertainment at 13%, Industry & Services at 11.3%, Automotive at 9.2%, Media at 8.9%, Healthcare at 7.5% and financial advertising with 6.3%.

Neilsen releases a list of the 20 companies who spend big on advertising, with companies like Volkswagen group, McDonalds, Unilever, AT&T and General Motors still believing in the power of advertising after a comprehensive market research campaign.


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