Widespread social unrest and economic volatility during the second half of 2019 greatly disrupted market dynamics in several countries across Latin America. 2020 was expected to be a year of recovery and economic growth, but the arrival of Covid-19 on February 26 put a damper on such expectations.
The fallout from the coronavirus and the political turmoil seen throughout the region in recent months will have more negative consequences for traditional media this year than for digital media, according to eMarketer. While they expect traditional media outlays to decrease by 17.5%, digital will continue to grow in terms of share and real investment as advertisers pivot their ad budgets toward online channels amid market volatility.
From 2015 to 2020, digital ad spending in Latin America more than doubled from $4.18 billion to $9.33 billion. That means, for the first time, digital will account for nearly 40% of the regional ad market. Under these current circumstances, this share should further improve in the years ahead.
Given digital’s rapid acceleration across Latin America, eMarketer’s core six countries will all secure a spot in this year’s top 10 fastest-growing digital ad markets worldwide for the first time. Among the 37 markets forecasted, Colombia (11.2%), Chile (5.9%) and Brazil (5.2%) will rank first, second and third, coming in ahead of China (5.0%). Argentina and Mexico will come in fifth and sixth place, respectively. Peru will be right on the heels of Finland and Russia, in 10th, since the two countries will tie for ninth place.
Even though digital ad spending in Latin America tilts toward display—like social media and video—advertisers should keep search on their radar as retail ecommerce adoption surges in other emerging markets—like Colombia, Chile and Peru (22.6%)—as well as Mexico (20.9%).
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