Brazil: Market Overview David Eastman, EVP Pointlogic Americas Angelo Franzão, EVP Pointlogic Brazil
Brazil ‐ 2010
1
Brazil Brazil
4
Brazil Population: 190,9 Million Households: 54,4 Million GNP: US$ 1,577 Billion P C it Income: I 8 297 Per Capita US$ 8,297 (R$ 16.414) Inflation: 4,31% (2009 - IBGE) Automotives: 27,8 Million (3.4 Million – 2009) Fixed Phones: 42 Million Mobile: 174,0 Million Computers: 70 Million Broad Band 12,0 Million More than 70 MM internet users
2
5th Largest country in terms of land mass
Greatest bio‐ bio‐diversity on the planet 3
49% of Latin American Land Mass
9,000 km of coastline 4
190,9 million people…
50% of the Latin American Population… Source: Mídia Dados
We are a youthful country 37% of the population are under 20 y.o.
5
We are a youthful country and 69% are under 39 y.o.
1950
1991
2009
Rural 64%
Rural 24%
Rural 17%
Urban 36%
Urban 76%
Urban 83%
Source: Mídia Dados / Censo IBGE e PNAD IBGE
6
São Paulo is the 4th largest city in the world
14 cities with over 1 million people…
7
15
Population Profile
Source: Midia Dados
Women represent 43% of the work force 51%
Source:TGI Ibope
29% of Households headed by women 56% of university entrants
8
17
Many countries within in only one North Northeast
Brazil has 5 regions, each one with different ethnic, economic and social characteristics
Southeast
Middle‐West South
18
Many countries within in only one North
= Population of Chile (17,4 million)
9
Many countries within a country Northeast
19
= Population of Portugal + Spain ( 51,5 million)
Many countries within a country
20
Southeast = Population of Germany (86,0 million)
10
21
Many countries within a country
South
Many countries within a country
= Population of Venezuela (28,0 million)
22
Middle‐West = 2x a Population of Hong Kong (7,5 million)
11
Purchasing Power vs Population of Regions North
23
Population = 8,0% Purchasing Power = 5,0%
Northeast Population = 28% Purchasing Power = 18,2%
Population = 42,3% Purchasing Power = 51,8%
Middle‐West
Southeast
Population = 7,2% Purchasing Power = 7,8%
South
Population = 14,5% Purchasing Power = 16,8%
Source: Midia Dados
Multicultural
12
Pelé Giba
Daiane doss Santos
Ronaldo
Romário
Ronaldo Gaucho
Many important sportspeople
Pato Neymar
Dentinho
Thiago Pereira
Cesar Cielo Ayrton Senna
Much more than` Folklore and Carnival
13
Political Landscape Settling down
• Two decades of significant changes • Fernando Henrique Cardoso ‐ the presidency for two mandates (from ) 1995 to 1998 and from 1999 to 2002). • Leftist popular president Luis Inácio Lula da Silva ‐ elected in 2002 – for two mandates. • Lula government is marked by the politics of the stability, by the continuity of Plano Real and for a lot of privatizations.
Political Landscape and maturing
President P id t Luis L i Inácio I á i Lula L l da d Silva was re‐elected for the popular vote in 2005 and it governs up to 2010.
14
Consumption Potential
Social Economic Level – Brazil changes... 2005 2005 15%
34%
51%
2010 2007 15% 15%
h population l Since 2005, 51% off the pertained to DE classes.
49% 46%
In 2010 it drops to 36%, while C class increase from 34% to 49% and AB maintaining Its 15%.
36% 39%
In five years Brazil changed a lot
15
Social Economic Level – Brazil changes... The C class is now presenting on opportunity. A/B / Classes
15% of population 28,5 mm of people w/ average family annual income: US$ 14,400.00
C Class
49% of population 93,1 mm of people w/ average family annual income: US$ 7,300.00 D/E Classes
36% of population 68,4 mm of people w/ average family annual income: US$ 3,770.00
Social Economic Level – Brazil changes... AB
C
DE
16
Evolution of C Class in the great Brazilian cities
17
And in terms of the Media landscape, what happens in Brazil that makes this country t so peculiar? li ?
36
Media Investments Evolution
Source: Meio & Mensagem
18
Communication Industry ‐ Forecast • 2009 – US$ 12,6 billion • 2010 – US$ 14 14,2 2 billion billi (13%) • 2011 – US$ 16,4 billion (15%) • 2012 ‐ US$ 18,8 billion (15%) $ 21.6 billion (15%) ( ) • 2013 – US$ • 2014 – US$ 24.9 billion (15%) 2020 – US$ 44.1billion – (10% a year)
Brazil Reasons for optimism • Got out of crisis earlier ‐ now in vigorous recovery • Political l l & economic stability b l ‐ investment‐grade d rating • GDP projections above WW average (2nd highest in the world) • Solid financial system, well regulated with low exposure • Strong internal markets ‐ 50 MM new consumers • Largest WW exporter of food products • Highly diversified economy and trading partners • Oil independent ‐ huge reserves found recently • Return to interest rates of a “normal” country • Lula ‐ worldwide superstar / Olympic champion! 38
19
Brazil Vulnerabilities • Government G expenses out off controll • Fiscal, political, labor reforms ‐ promise not fulfilled • Education, science/technology ‐ more investments • Corruption • Strong real • Demand could grow faster than productive capacity • “Brazil Cost”
39
Brazil Ad industry • Positive P i i reaction i in i line li with i hb bullish lli h economic i scenario i • 2010 ‐ expected all‐time record year in ad spend • World Cup 2014 and Olympics Games 2016 ‐ long period of effervescence (beginning in 2010, July) • Regulation of digital market ‐ evolution • Media companies (groups) trying everything to enter the market • How to communicate with lower class new consumer • Advertisers forcing for better media quality level (Compose opportunities) 40
20
Brazil Ad Agencies • 3,736 , agencies g certified for the CENP in Brazil • 2009 ‐ 791 new agencies had been certified • Last 10 years CENP asked certification of 9.400 new agencies • More than 3.000 agencies operate without CENP certification • 100 agencies it withholds 90% of invoicing Brazilian Ad • Brazilian model – full service agency – media inside • The retail is the dominant category in the Brazilian market • Opportunities ad investments diversified as digital area, sports marketing and promotion, social responsibility, ecology , etc. 41
Brazil Digital business • 70 million p people p with internet access • 2009 digital share of total ad spend = 4% • Even with highest growth on all media, share is very small (compared to 30% in UK) • Need to change remuneration model (commission – 20%) • Domestic mergers of small agencies • Domestic holdings with minority interest in several agencies • Digital networks disembarking in Brazil
42
21
communication channels +70 60/69 6
Assistem TV Aberta
Lêem Jornal Assistem TV paga
Ouvem Rádio FM
30/39
Mídia Exterior/Outdoor
Acessam Internet
Buscam prog. lazer na internet
Ouvem rádio no celular
Costumam ir ao Cinema
Assistem TV ao vivo no Acessam Internet/E-mail celular no celular
12 UP
young
13/18
Lêem revista na internet
Usam jogos no celular
Costumam ir ao Teatro
Lêem jornal na internet Lêem notícias em geral na Internet
Lêem Revista
19/29 1
age
40/49
50/59
older
Ouvem Rádio AM
Usam jogos na internet
E CLASS
D CLASS
poor
Ouvem rádio na Internet
C CLASS
classs
B CLASS
A CLASS
rich
43
54%
85%
5%
10%
DIRECT MKT RELATIONSHIP MKT TELEMARKETING ENDOMARKETING PROMOTION ON LINE ACTIVITIES OTHER
mass audience
individual audience
traditional media
new media
22
share of marketing activities
Mkt Relacion. 3%
RP 3%
OOH 3%
Mkt Cultural 1% Mkt Social 1%
Patrocínio 3% Pesq. Mercado 4%
Propaganda 46%
Merchandising TV 3% Mkt Direto 3.6% Internet 4.6% Eventos 5% PDV 8.1%
Prom. Vendas 11.0%
45 Fonte Pesquisa Interscience
2018 – Digital Year
2018!
US$ 14.098,0
23
Media Penetration 53,4 millions of Households with TV / 5 network / 423 TV stations – National and local 55,0 millions of households with radio sets Total Radios: 3.988 : 2.281 FM – 1.707 AM 1.300 companies of Outdoor = 36.814 billboard, more than 500 companies of OOH, which 5 pertain to international groups 3,439 titles of newspaper – 673 daily ; 119 audited Regional focus – 5,8 millions of issues 3,915 Magazine titles – 385 audited (IVC) National 17.3 millions of issues More than 70,0 million web users Sales oriented Young and high purchase – C class 8,3millions of subscribers, 21,0 MM TV Viewers main international exhibition companies, national coverage Growth of Multiplex room Shopping malls – Consumption
Source: Midia Dados/Marplan
Brazil Media Investments
2009 Investments R$ 21,5 billions US$ 12,6 billions
Source: Projeto Intermeios
24
Some numbers about Media in Brazil Media
Market
Cost US$
Rating (#)
Format
Open TV
Novela 3 (Globo)
National
223.833,00
32.789.114
30" spot
Magazine
Veja
National
170.011,00
3.356.000
1 Page Full Collor
Newspaper
Radio
Folha de São Paulo Estado de São Paulo Tupi FM (ROS 07am-07pm)
140.920,00
664.000
142.581,00
589.000
1 Page Full Collor Sunday
São Paulo
560,00
227.598
30" spot
São Paulo
Cinema
Cinema - Shopping C t N Center Norte t
São Paulo
1.611,00 ,
6.584
30" Spot -1 cineweek (Ci (Cinemark k 1 roon))
Pay TV
Sportv (Soccer Game Prime Time)
National
2.220,00
156.600
30" spot
Internet
MSN
National
35.000,00
10.000.000
Today Special
CPT Comparative Basis São Paulo Metro Area (All Population)
25
51
Cost per thousand (gross) Media
CPT ((US$) $)
Format
Radio
2,46*
30"
Open TV
6,82
30"
Pay TV
17,17
30"
Internet
35,90
Fullbanner
Magazine
50,65
01 Page 4 C
Newspaper
92,43*
1 Page B&W
Cinema
245,98
30"
* Local cost - Based on – São Paulo
Thank you!
eastman@pointlogic.com
26