Business analysts recognize that Latin America is an important emerging economy. In general terms, this report is focused on the Spanish speaking Latino community living in the American continent. The aim of this report is to provide you with a wider view on the usage and penetration of the Internet in the Latin American Spanish-speaking countries.
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1. LATIN AMERICA REPORT
24/08/08
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Latin America Report
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INTRODUCTION
The aim of this report is to provide you with a wider view on the usage
and penetration of the Internet in the Latin American Spanish-speaking
countries. Results demonstrate that Latin American Internet usage is
rapidly growing.
We believe the information contained in this document may depict the
region’s huge potential and its impacting and increasing competitive
strength.
We hope you find this work useful to understand the Latin American
context and helpful for your decision-making process.
We look forward to hearing your feedback, or any suggestions you may
have.
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Spanish Latin America: 362,285,447
Inhabitants
SCOPE OF THE STUDY
In general terms, this report is focused on the Spanish speaking Latino
community living in the American continent. In some cases, Brazilians
were taken into account, in order to give a broader perspective of the
region.
The number of
Spanish-speaking
individuals living in
the Americas is
around 380 million
inhabitants, almost
40 millions above
the population of US
& Canada.
The Latino Culture
is a driving force to
both the American
and the global
panorama, and it is
an important and
huge segment of
the world market.
Often, studies divide Latin America into three main demographic regions:
1. Central America: Guatemala, Honduras, El Salvador, Nicaragua,
Costa Rica, Panama and, Mexico (albeit Mexico belongs to North
America).
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2. South America: Colombia, Venezuela, Ecuador, Peru, Paraguay,
Bolivia, Uruguay, Chile and, Argentina.
3. The Caribbean: Cuba, Dominican Republic and, Puerto Rico.
4. US Hispanics: This group is very numerous and cannot be ignored.
Brazil and Mexico are the leading emerging economies in the American
continent. Their populations add up to around 380 million inhabitants;
almost 40 million above the population of US & Canada. The Spanish-
speaking region is the most populated in the Americas.
DEMOGRAPHICS - AMERICA
AMERICA TOTAL POPULATION:
149,206,636
16.5%
39,799,568
4.4%
334,659,631
37.03%
190,010,647
21,02%
190,116,623
21.04%
USA & CANADA
BRAZIL
SOUTH AMERICA
(SPANISH)
CENTRAL AMERICA
THE CARIBBEAN
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WORLD INTERNET PENETRATION RATE (% POPULATION)
69
54
40
20
12
10
4
USA-CANADA AUSTRALIA EUROPE LATAM ASIA MIDDLE EAST AFRICA
INTERNET PENETRATION AND GROWTH
The Internet, as many other technologies, arrived much earlier to Europe,
Australia and the USA & Canada regions than it did to the Latin American
countries.
The Internet in
LATAM countries
have not reached yet
the penetration rates
shown by the leading
economies of the
world; but it is far
above the levels
reached by Asia,
Middle East and
Africa.
Since the Internet
established in LATAM,
it became one of the
strongest and, fastest
industries in the
region. Latin America
Internet penetration
rate reached globally
LATAM VS. REST OF THE WORLD
INTERNET PENETRATION RATE
22.2%
19.7%
20.0%
LATIN
AMERICA
REST OF THE
WORLD
WORLD
AVERAGE
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the fourth place in a rather short period.
The advantage of LATAM is that the region’s population is large enough to
make a market segment, attractive to both regional and global players.
The Internet
Penetration in Latin
America has not
reached the levels of
US & Canada.
The fast development
of this industry
anticipates that the
amount of online
users will increase
enormously in a few
years.
Latin America’s rush
to adopt new
technologies, plus the
advantage of having
seen Internet
development unfold
in the US and
Europe, are
translating into an
even more
compressed
development time frame for Latin America.
INTERNET USERS GROWTH 2000-2007
969%
752%
121%
SPANISH
LATAM
BRAZIL USA & CANADA
AMERICAS INTERNET PENETRATION RATE
22,46% 22,42%
71,12%
SPANISH LATAM BRAZIL USA & CANADA
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Rincon & Associates prepared a report about media consumption among
US Hispanic population and the people from Puerto Rico, Argentina, Brazil,
Chile, Colombia and Mexico. According to that report, the Internet
Penetration in the region grew at a rate of 16% during last year as the
amount of Hispanic Internet users reached 67,5 millions on January/2008.
Other sources tend to agree with this data. ComScores recently published
a review of Latin America Internet usage. It states that LATAM Internet
Users grew from 53.6 million unique visitors in June 2007 to 61.6 million
in April 2008. Their study considers some Latin American countries, and
does not count the US Hispanic population. A report from eMarketer says
that about 52 percent of the U.S. Hispanic population accesses the
Internet at least once a month.
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LATIN AMERICAN INTERNET USAGE PATTERNS
Latin American Internet Penetration
(June 2007)
Total
Population
(000)***
Monthly
Unique
Visitors
(000)
Internet
Penetration
Total Latin American 407,424 53,664 13%
Argentina 30,262 7,233 24%
Brazil 141,843 15,849 11%
Chile 12,353 5,593 45%
Colombia 31,144 2,708 9%
Mexico 75,993 10,731 14%
Puerto Rico 3,118 809 26%
Source: comScore World Metrix
* Estimated users age 15+ active within 30 days from home or work computer as a
percentage of total country population age 15+
**Excludes traffic from public computers such as Internet cafes or access from mobile
phones or PDAs
Overview of Latin American Internet Usage by Country
(April 2008)
Total Unique
Visitors
(000)
Average
Usage Days
per Visitor
Average
Hours per
Visitor
Worldwide 849,580 17.1 25.7
Total Latin America 61,610 16.3 28.6
Brazil 19,320 16 30,2
Mexico 11,773 14.7 23.7
Argentina 8,440 17.8 32.4
Chile 5,320 17.4 28.4
Colombia 3,284 16.4 27.9
Venezuela 1,556 17.2 31.5
Puerto Rico 854 15.0 19.7
Source: comScore World Metrix
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Top 10 Latin American Online Properties
(June 2007)
Property
Total
Unique
Visitors
(000)
% Reach
Average
Visits per
Visitor
Total Latin American Users 53,664 100 54
1 Microsoft Sites 47,342 88 35
2 Google Sites 46,496 87 38
3 Yahoo! Sites 35,075 65 13
4 Terra Networks 27,421 51 9
5 MercadoLibre 23,739 44 5
6 Wikipedia Sites 20,984 39 4
7 UOL Red 14,681 27 14
8 Ares Galaxy - P2P (App) 14,595 27 N/A
9 Fox Interactive Media 14,078 26 4
10 France Telecom 13,759 26 3
Source: comScore World Metrix
*Ranking based on the top 100 Latin American properties in June 2007.
** Excludes traffic from public computers such as Internet cafes or access from
mobile phones or PDAs. Only Home and Work Locations.
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*** Total Latin America, Age 15+
Engagement Categories Among Latin
American Internet Users (April 2008)
Site Category
Average
Hours per
Visitor
Average
Minutes
per Usage
/ Day
Total Latin American Internet Audience 28.6 105.3
Portals 13.4 35.8
Instant Messengers 9.2 31.6
Social Networking 5.9 25.9
E-mail 4.1 22.1
Entertainment 2.2 10.0
Games 1.7 13.0
Photos 1.7 16.0
Multimedia 1.4 10.2
Kids 1.2 18.4
Online Gaming 1.1 12.2
Source: comScore World Metrix
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Study excludes traffic from public computers, such as Internet cafes or access from
mobile phones/PDAs. Population: All adults, age 15+, Home and Work Locations*
Top 25 International Properties Ranked by Number of
Latin American Unique Visitors (000) (By April 2008)
Top 25 Properties
Total Unique
Visitors (000)
Total Latin American Audience, Age 15 + 61,610
Google Sites 55,290
Microsoft Sites 54,914
Yahoo! Sites 38,621
MercadoLibre 27,534
Wikipedia Sites 26,347
Terra Networks 25,873
UOL Sites 16,711
Orange Sites 15,241
WordPress 14,570
HI5.COM 12,831
Groupe Hi-Media 12,242
Grupo Brasil Telecom 12,103
Organizacoes Globo 11,851
Fox Interactive Media 11,793
AOL LLC 11,122
Grupo Intercom 10,661
Ask Network 8,967
Gruppo DADA 8,956
Adobe Sites 8,854
BuscaPé Inc. 8,805
Batanga 8,797
MONOGRAFIAS.COM 8,297
Apple Inc. 7,821
EBay 7,725
FACEBOOK.COM 7,711
Source: comScore World Metrix
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DEMOGRAPHICS
Business analysts recognize that Latin America is an important emerging
economy. Like other developing economies, the region faces barriers.
LATAM countries’ problems are not identical. Some of them face obstacles
such as low income per capita, lack of infrastructure, political struggles, or
terrorism and criminal disturbances. These difficulties tend to hold back
the region’s development, but it does not stop them from playing a major
role in the world’s economy.
Marketers are focusing on emerging market countries, and their lucrative
Internet opportunities. One of them is Mexico, a 106 million people
country and, after Brazil, the second main online market of Latin America.
On the other hand, Internet users in Latin America tend to be younger
than the population as a whole.
Mexico as an example:
According to WorldStats, Mexico’s 20 million internet users rank
thirteenth out of the top 20 countries in terms of Internet users.
Mexico broadband adoption is growing and is proving to be an
ecommerce driver around the world. Last year, there were more
broadband subscribers than dial-up subscribers for the first time.
Technologies such as WiMAX and VoIP are also emerging in the
market.
Along with internet penetration growth, the two main facets that
contribute to Mexico's leading digital opportunities are an increase in
broadband and mobile infrastructures and a fast-adopter
demographic (53 percent of Mexico's population is under 24 years
old).
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Mexico is poised to be a major player in these industries and will
grow dramatically in the future.
INTERNET INFRASTRUCTURE SERVICES
Telmex, Embratel, AT&T Latam, and MetroRED. Telmex and Embratel
(Brazil) derive an increasing proportion of their revenues from Internet
Infrastructure Services.
The other two players, AT&T Latam and Metro-RED, are pure plays on
data transmission.
All four are intensely focused players.
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SOCIAL NETWORKS
The Social Networks audience in LATAM is reaching the 77% of the total
Internet user population. Approximately 44,8 million people are regular
visitors of one of the main social networks: Bebo, Facebook, hi5,
mySpace, Orkut and Sonico. 29.6 million are from the Latin American
Countries and about 15.2 million are Puerto Rican and US Hispanics.
While total Internet users grew 16% during the last year (in both
regions), social network penetration grew 48% among US Hispanics and
Puerto Ricans and 103% in the Latin American countries. (Analysis based
on comScore Metrix Data)
From January to April 2008 Latin American Social Network users increased
by over 1.2 million.
MAIN SOCIAL NETWORKS BY NUMBER OF USERS IN
LATAM
(APRIL 2008)
Social network
2007
Total Unique
Visitors (000)
2008
Total Unique
Visitors (000)
Growth
rate
Orkut (BRAZIL) 10.1 12.9 27%
hi5 2.2 4.2 72%
MySpace 3 13 26%
Facebook 52 2.2 4152%
Sonico 0 7.3
Source: comScore World Metrix
Lately, Sonico and Facebook drive the most remarkable Social Network
successes in the region:
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1. Facebook: Recently launched the Spanish version. This move
represented a huge growth in the region. They had 52,000 users at
the beginning of 2007 and in January 2008, only a year later, they
reached 2,2 million users.
2. Sonico: This is the new LATAM Social Network. It launched in the
second half of 2007 and has been very successful, reaching very
fast 7,3 million users.
3. Mexico: Even when Mexicans have a stronger presence in hi5
(more than 50% of hi5 users are Mexicans), they are also
important players in MySpace and Sonico.
4. MySpace and hi5 have highest rank of users between ages 15-24.
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SOCIAL NETWORKS USERS, PROFILES AND TRAFFIC
We base the following graphics on reliable studies and reports;
nevertheless, it is important to mention that not all social networks have
or want to provide personal information about their users.
Some social network users profile information is public or available, but
not all of it. Therefore, we are showing the general situation and the
direction in which the market is moving in LATAM and the US Hispanics
markets, but the figures given in the following charts and graphics might
not be 100 percent accurate.
The social networks have a quite regionalized presence in the region: For
example, mySpace is the largest social network among US Hispanics and
Puerto Ricans but not so in the rest of the Latin American countries. The
same happens with Orkut, which is very popular at home but has no
significant presence in countries outside Brazil. MySpace is the leader
among US Hispanics, and Sonico is the social networks with highest South
American traffic. MySpace is the most visited Social Network, but it shows
the lowest growth rate of 26%, closed followed by Orkut.
The next graphics do not considerate the Brazilian population, neither
Orkut Social Network. They show only the most visited social networks in
the region (Facebook, Hi5, MySpace, and Sonico) and show the different
existing user’s preferences among Latin Americans (LATAM) and the US
Hispanics and Puerto Ricans (USH-PR).
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SOCIAL NETWORKS MONTHLY VISITS
37,150 39,003
25,027 23,733
35,187
12,743
154,709
1,448
FACEBOOK Hi5 MySPACE SONICO
LATAM USH-PR
S.N. TRAFFIC: UNIQUE VISITORS AGE 15-24
(JANUARY 2008)
FACEBOOK Hi5 MySPACE SONICO
MALES AGE 15-24 FEMALES AGE 15-24
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ONLINE VIEWING WITHIN LATAM (SOCIAL MEDIA)
Universal McCann & Microsoft LATAM Research Partnership presented a
global study in which
they examine all
elements of “social
media” on the web to
understand the online
viewing behavior.
Globally, it is
estimated that nearly
350 million people
watch online video at
least once a month.
The study demonstrates that the viewing of online video is now a major
form of activity on the web.
Video online has overtaken streaming of audio content, and is significantly
ahead of podcasting or videocasting.
That research took place in over 20 markets and it concluded that LATAM
is a leading region in terms of video consumption. Mexico is in the top five
markets globally since approximately 70% of frequent internet users have
watched video clips online in the last 6 months.
ONLINE MEDIA CONSUMPTION BY NUMBER OF USERS (000)
330
285
124
110
0 50 100 150 200 250 300 350
VIDEOCAST
STREAMING AUDIO
VIDEOCLIP
PODCAST
SOURCE: Universal McCann & Microsoft LATAM Research
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MOBILE SYSTEMS
Mobile systems will be the leading form of Internet access in Latin
America, which has more cell phones than computers. The basis of mobile
business is the convergence of technologies. Voice, text, images and data
no longer require different networks but flow through uniform systems.
The cell phones are rapidly becoming the "new" medium for viewing music
videos in LATAM. 41 percent of teens have video downloading capability
on their cell phones and approximately half of those teens are actually
downloading and viewing videos. Among these teens, music videos are
the most watched type, followed by user-generated content.
Already, 375 million Latin Americans own a mobile phone — 66 percent of
the total population, versus the 46 percent worldwide average. The mobile
versions of large web-based social networks seem to have a big
advantage when it comes to getting big on mobile, because web users go
to the mobile versions of their web social network. This means sites like
hi5 and Facebook have a lot of leverage in taking over the market.
Mexican telecom industry grew 21.5% in 2005, according to Cofetel.
Growth in cell phone communications accounted for 71% of the industry’s
growth in 2005. Mobile telephony continued its dynamism, reaching 47.5
million users at the end of 2005 while traffic showed growth of 35% with
respect to 2004. Around 46 people in 100 now use a cell phone in Mexico,
compared with just 14 in 100 in 2000. Almost all Latin Americans can
afford a mobile phone. In fact, low-income users make up one of the
largest segments of mobile users. According to Frost & Sullivan, the Latin
American mobile messaging market gained US $2.4 billion in 2005 and is
predicted to reach US $7.8 billion in 2011
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Latin America is one market where mobile content services have been
quickly catching on and have been responsible for 3.1 percent of the total
mobile telephony revenues in 2007. New analysis from Frost & Sullivan
(News - Alert), Latin American Mobile Content Markets, indicates that the
market earned revenues of $1.15 billion in 2007 and estimates this to
reach $8.93 billion in 2014.
Mobile in Latin America
Mobile penetration: 60-75+% region-wide
Mobile vs. Internet access: ~3 to 1
Mexico: biggest growth potential for content
A US$1.9 billion market in 2008
High mobile subscriber growth continues
Mobile connectivity dominates
For Latin consumers, content is mobile
Mexico News:
Telcel, the Mexican unit of América Móvil, serves 153 million mobile phone
clients in 16 Latin American countries. Nearly one third of their customers
are located in Mexico.
América Móvil (Telcel) and Google (YouTube) have created an alliance and
in their first campaign they are offering Telcel users in Mexico the
possibility to watch YouTube.com. This service will be extended to other
markets in the region where América Móvil is present. This agreement
foresees that Youtube.com and América Móvil will share the income
resulting from future publicity.
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MARKET
Growth rates are high in the key Latin American markets and,
significantly, the rate of broadband adoption is exceptional for such a
young internet population. In a report titled "Latin America Online,"
eMarketer finds that Mexico’s online population grew from 2.7 percent in
2000 to 19.2 percent in October 2006.
Another attractive aspect of the market is its demographics:
The average Latin American Internet user spends 29 hours online
during the month – more than the global average of 25 hours.
Internet users in Latin America tend to be younger than the
population as a whole.
Internet Users are more likely from middle or upper socioeconomic
groups, a desirable demographic target online. This demographic is
well educated, tech savvy and able to make informed buying
decisions online.
The same report eMarketer says that “the online ad spending in the region
is poised to grow far more rapidly than traditional advertising, providing
greater opportunity for online marketers”. Ad spending in LATAM rised in
2005 19.3% to $18.5 billion; in 2006, 8.8% to $20.1 billion; and in 2007,
10.2% to $22.1 billion. PriceWaterhouseCoopers believes that the fastest
growth in online marketing is expected in Latin America, with spending set
to jump at a 10.6% annual rate over the next five years.
According to a BusinessWeek article titled "Mexican Marketers have Youth
Fever," companies are battling as never before for the hearts, minds and
wallets of Mexico's biggest consumer segment: the 25-and-under set. The
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article states that Antenna Consulting, a Mexico City market research firm,
estimates that spending by Mexicans ages 13-18 totals $10 billion a year.
Online ad spending in Latin America is set to grow far more rapidly than
traditional advertising.
It is evident that Mexico has a very promising future, both for online
advertising opportunities as well as for mobile marketing and for other
emerging technologies.
Not only do the number of internet and broadband/mobile users increase
daily, but the many initiatives that are taking place to grow this online
market are commendable.
This document is property of Creactives / Ideas Utiles. As long as the information contained in this report has not been
published, it may only be used when permission has been obtained from Creactives / Ideas Utiles. It is not permissible lo
make reproductions of all, or sections of this report. Commercial use of the information is only possible with the permission
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