Feature

World Media 2007: Latin America

Social inequality, inadequate infrastructure and deteriorating relations with the United States are stunting the growth of this hotbed of advertising creativity centred in Brazil and Mexico.

It's not Latin America's moment. The region's economic growth just isn't sparkling. A cold war between North and South America is worsening, and the region isn't getting its act together over its creaky infrastructure.

Latin America has for some time been bunched in with Asia and Eastern Europe as one of the world's developing markets, with attractively high growth. But it's becoming a little less attractive, especially when put beside some of the star economies such as China, India or Russia.

According to the World Bank, the total GDP growth in the region was 4.6 per cent in 2006, a fraction up on the year before, but no reason to start popping Champagne corks. Economic expansion in the region is expected to slow slightly in the coming year.

Latin America has enjoyed several years of sustained growth, boosting confidence in the economy both at home and abroad. But the two leading economies, Brazil and Mexico, are seeing more marked downward trends than other smaller countries, with GDP growth forecast at below 4 per cent growth next year.

All this doesn't stop the continued development of a thriving media industry in a region where being in advertising can, to some people's way of thinking, only be topped by being a footballer. In Brazil, which dominates the region, it helps that there are laws insisting that any ad must be placed via an ad agency, with a favourable 20 per cent commission. But there is strong talent in the business, with Brazil a consistent winner at international awards.

The region is home to world-class media giants. Brazil's TV Globo is the world's largest TV producer and Veja is one of the world's largest magazines.

Growth in adspend in 2006 is expected to slow markedly, from 18.9 per cent to 7.1 per cent. It's not to be sneezed at, but it's important to bear in mind that much strong growth in the dominant Brazilian market is attributable to the 17 per cent appreciation of the real against the US dollar.

Latin American countries are characterised by inequality and poverty. It is the most unequal region in the world and, according to the World Bank, nearly 25 per cent of the population lives on less than $2 a day.

The infrastructure across the region is woefully inadequate: 58 million Latin Americans do not have access to drinking water and twice that are without sewerage. Not enough is being done to address this problem, despite standards being well below those in Asia's fast-growing economies.

Over the past year or so, a wave of anti-American feeling has swept the region. George W Bush once claimed that Mexico was the US's most important ally. That is no longer the case. More and more Latin American countries have voted for left-wing governments of different shades, a number of them keenly out of step with the US.

In Venezuela, the president, Hugo Chavez, says: "The imperialist, genocidal, fascist attitude of the US president has no limits ... I think Hitler would be like a suckling baby next to George W Bush."

No surprise, then, that a move towards unifying Latin American economies has been undermined by different country's relationships with Bush and the US. A 12-country South American Community of Nations, launched in 2004, called Mercosur, looks irrelevant after several countries signed bilateral trade agreements with the United States. The separate countries of Latin America remain just that.

ADVERTISING EXPENDITURE
USdollars million at current prices. *Estimated
Total News- Maga- TV Radio Cinema Out- Online
papers zines door
2000 15,971 3,598 1,448 8,774 1,446 81 621 3
2001 14,746 3,476 1,260 8,139 1,277 89 503 2
2002 11,696 2,585 828 6,885 1,014 44 335 5
2003 12,079 2,594 906 7,258 817 50 385 69
2004 13,667 2,888 986 8,256 945 54 444 94
2005 16,457 3,375 1,259 9,963 1,125 64 539 132
2006 17,629 3,557 1,425 10,618 1,209 69 601 150
2007* 18,330 3,716 1,579 10,885 1,302 67 618 163
2008* 19,130 3,883 1,757 11,202 1,402 67 641 178
2009* 20,012 4,059 1,967 11,550 1,509 69 664 194

TOP 20 FASTEST-GROWING AD MARKETS
USdollars million at current prices.
Rank Country Year-on-year Total spend Total spend
% change 2006 2005
1 Egypt 47.3 837 568
2 Saudi Arabia/Pan Arab 39.0 3,924 2,823
3 United Arab Emirates 36.8 1,333 974
4 Romania 34.4 413 307
5 Russia 30.1 6,516 5,010
6 Qatar 28.5 121 94
7 Kuwait 26.6 500 395
8 Vietnam 25.2 418 334
9 Lithuania 22.4 389 318
10 Slovakia 20.6 1,145 949
11 Poland 19.6 4,749 3,970
12 Estonia 19.0 108 91
13 Indonesia 17.2 3,299 2,814
14 Bulgaria 17.1 469 400
15 China 16.4 11,378 9,775
16 India 15.8 4,248 3,668
17 Brazil 13.7 7,386 6,496
18 Hong Kong 13.3 2,848 2,515
19 Latvia 12.4 119 106
20 Turkey 12.2 1,885 1,680

REGIONAL AD MARKETS GROWTH
Year-on-year % change
Brazil 13.7
Paraguay 11.0
Chile 10.9
Colombia 10.0
Uruguay 8.7
Peru 7.1
Mexico 6.6
Venezuala 3.7