Living With The Internet

A Latin American Study On What’s Driving Web Behavior

Agenda
Project Objective & Methodology

Executive Summary

Evolution of the Internet

Latin America – Online Behavior

Latin America – Key Statistics

Appendix

Project Objective & Methodology

Project Objective & Methodology
Objective: Understand what drives people to go online in Latin America and how to integrate marketing communications into their different online activities in best possible way. Focus: Four major LatAm countries were analyzed in this study

Brazil

Mexico

Argentina

Colombia

High Focus Countries Top 2 countries that lead within the region, were analyzed in detail

Focus Countries Top 4 countries with high internet usage were analyzed

Methodology: Based on a survey done by our panel, 6,054 respondents aged between 16-64 years answered questions about their web behavioral patterns and their online brand interaction preferences. These respondents were further bifurcated into three sections of people; Teens (16-24 years of age) Men (25-64 years of age) Women (25–64 years of age) Other Data Sources: Leading industry data sources like eMarketer, comScore and Internet World Stats were also used to compliment data and findings in this study

Executive Summary

Executive Summary
Evolution of the Internet In last 5 years, global online behaviors has change dramatically 2007- The internet village was small; people used to spend most of their time on familiar and trusted sites 2011- The internet village has evolved; users today have wider choices & bigger voices Publishers focus on social & local offerings Brands, products and services are now connecting with users through a social & localized angle Evolution of internet – From U.S. to global, leisure to routined, spontaneous to planned and static to mobile Latin America Overview As internet growth saturates in the U.S. and Europe, Latin America has emerged as one of the fastest growing regions in the world Latin America contributes to over 8% of global web audience Growth in Latin America is further expected to continue as broadband and mobile phones become more widely available and affordable Latin American Internet users are highly engaged and skew heavily towards a younger audience

Executive Summary
Motivations to Go Online Research, Entertainment and Content Sharing are the biggest motivational factors for Latin Americans to go online People in age group of 16-34 are very active in sharing content online Staying in touch with friends is a common motivation to go online among all age groups, driven by women Entertainment is main motivation for teens to go online while Research and News are main drivers for adults to go online

Internet Usage Trends Young people drive internet consumption in Latin America 62% of Internet audience is in the 15-35 age group (source: comScore) 53% of Teens spend 4+ hours online/day On an average, women spend more time on Internet than men Among young adults, 25-34 age group spends maximum time online

Executive Summary
Activities on Social Networks Latin American consumers have a strong appetite for high-bandwidth activities such as content sharing, video streaming, music downloads, etc… Uploading photos and sending messages are common activities among all age groups, especially women Writing blogs and watching videos online are popular activities among men Over 50% of teens use social networks to send messages, upload photos/videos and play games Despite the rise of social networking and text messaging, e-mail and IM are still important reasons to go online

Online Brand Engagement Brand engagement through social media is very effective, especially with teens 64% of men prefer to engage with brands through owned media Women are more prone to get in touch with brands, if contact details are shared online Brands that are engaging, contextual and targeted appeal to the LatAm audience Top strategies adopted by brands to connect with LatAm online audiences are by providing discounts, superior customer service and customized product offerings

Evolution of Internet

2007 – Internet Village was Small; People Felt Safe and In-control; Interaction was Limited
Newsagents
News feeds, sports homepage

Post Office
E-mails Yahoo, Hotmail etc.

Banks Online Neighbourhood 2007
Finance

Shops
e-Bay, Amazon

Pubs
Forums and Social Networks

How Internet has Evolved Over the Years?
1

Customized Offerings

Users can choose what they want to see online Customizable layouts and categories give users freedom to see content in a way they want Larger focus on consumer needs Verticalization of content categories Use of more local and targeted content Location based online content

2

High on Localization

3

Better Interaction

Content has become more interactive and less static Higher engagement of brand with users Sharing of reviews & opinions More legitimate and credible content Use of rich media ads User controlled ads Platform specific ads Geo-targeted ads Behavioral targeting of ads Online properties are optimized to render on a variety of devices like tablets, smart phones, iPhone, iPad etc. Further customization for operating systems and different screen sizes

4

Targeted Advertising

5

More Digital Platforms

2011 – Internet Village has Evolved; Users Today have Wider Choices & Bigger Voices, Publishers Focus on Social & Local Offerings
More Newsagents
Local News Focus - News feeds, RSS, Portals, Newspapers & magazines Social News – Social Bookmarking, Facebook walls

E-mails, IM Twitter, Facebook, Skype etc, used on variety of devices Social Angle – Share and Recommend

Advanced Post Offices

Online Neighbourhood 2011

e-Commerce, Auctions, Live Trading Platforms, Mobile Payments Local Integration – Online Bill Payments & Banking

More Banking Platforms

Planned and Researched Shopping
More Retailers - e-Bay, Amazon, Online Stores of Major retailers Localized Retail Research – Pricewatch, Groupon, GetPrice

More Gathering Places
Forums and Social Networks with expanded apps, Blogs, Discussion Boards Social & Local – Fan Pages, Local Communities

Five Basic Motivations that Drive Web Behavior Globally
• • • • Sending and receiving emails Using IM Using Social Networks Using VoIP

Communication

Creation

• Uploading photos/videos • Editing/managing websites • Writing a blog/ news story Reviewing a product/brand Using social bookmarks Using an information aggregator Subscribing to RSS feeds

Information

• • • •

Entertainment

• Watching videos • Playing games • Listening to music • Internet banking • Online buying

Transaction

Communication & Creation are Preferred by Global Online Population; This Trend is Similar in LatAm

Information, 8% Entertainment; 11% Communication ; 41% Information; 11%

Transaction; 10% Entertainment; 10% Communication ; 43%

Transaction; 15%

Creation; 24%

Creation; 27%

• Communication is the main reason for people to go online • LatAm Audience pay more attention on Creation and Information gathering • Transacting online is a common Internet based activity globally, however it is on rise in LatAm

The Internet ‘Routine’ is Becoming More Important Than Ever to a Users Lifestyle
Intimate Zones
Start of the journey
Social Networks
Check for messages & respond (Facebook, Orkut)

Public Zones
CNN, BBC, Newspaper Sites, News Aggregators etc. YouTube, Microsoft Showcase etc.

Blogs, forums, RSS and spaces
Log into any forums or blogs to get updated

Emails
Log in & reply to messages (Gmail, Hotmail, Live Mail)

News updates

Entertainment

Throughout the journey, Instant Messenger (MSN Messenger, AOL IM) is always on as is music (iTunes/YouTube)
Information search Blogs, forums, RSS and spaces
Final check of forums or blogs

Online Shopping/Banking
Amazon, eBay, Bing Shopping etc.

Emails
Google, Bing, Wikipedia etc.

End of the journey

Social Networks
Final check of social network

Check emails again

NB: From other research we know that an average of six websites are visited on a regular basis

From intimate ⇒ public and back again

Even Though The Internet is Growing in Popularity, Awareness Of It’s Pitfalls Are Also Getting Bigger

Immediacy and ubiquity Easy to express feelings Free Access to information 24x7 connected One Stop Solution to all needs

Personal security Time it takes away from other aspects of one’s personal life Can’t find what you seek Credibility of information Subscription based content Irrelevant ads

Detail Analysis of Online Behavior in Latin America

1

Top Motivations To Go Online

Staying in Touch, Research, and Content Sharing are Popular and Key Motivational Factors for People to Go Online (1/2)
Stay in touch with friends

Key Takeaways
• Staying in touch with friends is common activity among all age groups • Research and News are main drivers for adults to go online • 61% of Teens go online to consume Entertainment related content

Research for work
Education

Research how to do things
For News/events Research products to buy To get ideas Entertainment Networking Find music

• Professional networking is low and is lead by women
• Teens and women are more prone to go online as compared to men
20%
Teens

0%

40%
Men

60%
Women

80%

100%

Source:- Global Web Index, Wave 3+Wave 4 data

2

Internet Usage Trends

Young People Drive Internet Consumption in Latin America
Teens More Than 4 Hours Men Women

• On an average 49% of all age groups spend 4+ hours online/day • 53% of Teens spend 4+ hours online/day • Men and Women of age group 2534 spend most time online

Key Takeaways

53%

44%

49%

3-4 Hours

20%

21%

19%

• Men aged 55-64 go online least

• Women spend more time online than Men
2-3 Hours 17%

22%

21%

• Teens outperform all other age groups when it comes to online consumption

1-2 Hours Less Than an Hour

9%

13%

10%

1%

1%

1%
Source:- Global Web Index, Wave 3+Wave 4 data

Mobile Internet Access is On Rise in Latin America
Teens Men Women

Key Takeaways
• Home is preferred place to access Internet, however, mobile Internet access is on a rise • Penetration of smart phones and mobile broadband is driving growth of mobile Internet access

Home

95%

93%

93%

Work

62%

79%

65%

• Consumption of online multimedia content is on rise, especially among teens • Advertisers should build strategies to engage consumers on new devices like smart phones and tablets

Out of home venue
e.g. Café/Bar

68%

57%

46%

e.g. On the move/ travelling

Roaming

32%

29%

22%

Source:- Global Web Index, Wave 3+Wave 4 data

Mobile Internet in Latin America is Used Mainly to Get Access to News followed by Research and Social Activities
• News and information is highest consumed over mobile, especially by men
Transaction 9%

Key Takeaways

Watched/Uploaded photos, videos 19%

News and Information 28%

• Men, women and teens use mobiles to search maps and get directions • Mobile social networking and watching videos is another popular activity among teens • Women prefer to use mobile phones for banking and online buying

Social Networking 19%

Search 25%

Source:- Global Web Index, Wave 3+Wave 4 data

3

Activities on Social Networks

Social Networking is a Popular Online Activity… IM, Content Sharing & Writing Blogs are Key Activities within (1/2)
Key Takeaways
Send messages to friends Upload photos

• Latin Americans are high on social engagement • Photo Sharing/Uploading and sending messages is common among all age groups • IM and email is still popular among all age groups, especially women

Instant message Search for new contacts

Share a new story
Play game Install application Join a group Upload videos

• More than 50% of teens use social networks to send messages, upload photos/videos and play games
• 60% of men use social networks to make new contacts and friends
20%
Teens

0%

40%
Men

60%
Women

80%

100%

Source:- Global Web Index, Wave 3+Wave 4 data

4

Interaction with Brands Online

Brand Engagement Through Owned Media is Preferred, But Interacting Through Social Media is Essential to Reach out to Targeted Audiences
Key Takeaways
• Online advertising is on rise in Latin America • Men engage with brands, with 64% visiting company website directly • Women are more prone to get in touch with brands if contact details are shared online

Website to interact with company
Listen to comments on forums/social networks Create applications /online services Videos online featuring the brand Contact me if brand is on a microblog Blogs to talk about company

• Brand engagement through social media is very effective, especially with teens
• Products that target teens have a huge potential in Latin America

Sponsoring music downloads

Blogging about relevant products Social networks for support Creating brand community0%

20%
Teens

40%
Men

60%
Women

80%

100%

Source:- Global Web Index, Wave 3+Wave 4 data

Highly Contextual and Engaging Brands are Preferred by LatAm Online Users
Key Takeaways
Provide knowledge Be informative about products Entertain Help in organizing life Communicate like a real person Provide real time experience Help in meeting people Be a part of daily routine

• LatAm consumers engage with brands that communicate directly • 48% of young audience between 16-34 years want brands to entertain them • Brands that engage with consumers and help organize their lives tend to develop a close relationship with them

0%

20%
Teens

40%
Men

60%
Women

80%

100%

Source:- Global Web Index, Wave 3+Wave 4 data

Providing Discounts and Customer Service Enhances Brand Loyalty on Social Networks

Discounts for future purchase

Customer service

A feature to track delivery Access to new products prior to release Personalized recommendations An ability to interact directly An opportunity to be part of product /service ideas Exclusive insights about brand Details on friends purchases

Virtual purchase opportunity

0%

20%

40%

60%

80%

100%

Teens Men Women Source:- Global Web Index, Wave 3+Wave 4 data

Recommendations and Direct Communication Drive Purchase Decision of Consumers Further
• Online and offline recommendations motivate purchase behavior
Sponsorships 10%

Key Takeaways

• TV based offline ads influence purchase
Recommendations 31%

Featured on major online activities 18%

• Direct communication is preferred, as people want to have a real time experience

Direct Communication 18%

Offline advertisements 23%

• Online activities like social media, email and search help in advertising to the target audience
• Sponsoring online videos and sports teams creates awareness and drive purchase

Source:- Global Web Index, Wave 3+Wave 4 data

To Summarize…
1
The Latin American market is emerging and fast growing. Thus advertisers should explore in this region to gain early advantage over their competition

4

Latin American consumers have a strong appetite for high-bandwidth activities such as content sharing, video streaming etc which clearly indicates huge opportunity hidden for advertisers as broadband penetration improves in this region

2

Latin American internet users are highly engaged and skewed towards the younger audience. This makes LatAm demographically attractive and favorable for future growth

5

The impressive usage of social media categories indicate terrific opportunities for advertisers to communicate effectively with their target customers. There is also good potential and growth in categories likes Retail, News, Travel and Finance

3
Mobile Internet access is on a rise in Latin America. Hence advertisers should build strategies to engage consumers on new devices like smart phones and tablets

6

Brand engagement through social media is very effective, especially with teens. Consumers also like to interact with products through company webpage/site. Thus advertisers should build relationships with LatAm consumers through interactive online advertising

Key Internet Statistics in the LatAm Region

Brazil Leads in Number of Internet Users; Colombia Boasts of Highest Internet Penetration in LatAm
Internet Users (MM)
2009 =163 MM
32 17 16 30

2011e=207 MM
40 25 21 41 79

• Brazil & Mexico are fastest growing Internet markets • Mexico is fastest growing market with 12% CAGR on a 3 year basis • There is a significant increase in growth of Internet penetration rates

Key Takeaways

65

Brazil

Mexico

Argentina

Colombia

Other LatAm Countries

Internet Penetration (%)
2009
43% 40% 33% 27%
Brazil Mexico Argentina Colombia

2011e
55% 50% 39% 36%

• Internet penetration in Brazil & Mexico is low as compared to Argentina & Colombia • Colombia has highest penetration rate with CAGR of 7%

• Growth in Internet penetration promises high growth potential

Source:- eMarketer, internet world stats and internal analysis

Latin American User Market is Big and Growing at a CAGR of 5%
Mobile Phone Users (MM)
2009 = 449 MM
101 174 42 48 84

Key Takeaways
• 3G introduction is driving growth in mobile phone subscriptions • Accessing internet through mobile phones is fast becoming a major need • One third of Latin American mobile users are from Brazil

2011e = 523 MM
120 198 43 59 103

• The pie is becoming more wide spread rather than having a major proportion confined to a few countries only

Brazil

Mexico

Argentina

Colombia

Other LatAm Countries

Source:- eMarketer, internet world stats and internal analysis

Online Advertising Spends are Increasing, Promising a Dynamic Future
Key Takeaways

Online Advertising Spend (MM)
2011e = $1,139 MM
$58 $91 $650 $285 $55

• Advertising spend in this region is increasing • Brazil leads in total as well as online advertising spend • TV attracts majority of the offline spend • The CAGR of all countries is growing significantly

Brazil

Mexico

Argentina

Colombia

Other LatAm Countries

• Brazil’s total ad market is mature and online ad market is largest in the region

• Online ad markets in Mexico boasts a 3 year CAGR of 45% respectively

Appendix

Stats from comScore
Please Note: Figures from comScore might differ from other sources used in this presentation. comScore only takes into consideration: • Active internet users • Internet users of ages 15+ • Internet usages in Homes and Work Places

LatAm Region Has Over 111 MM Internet Users Growing at Over 15% annually; Among the fastest growing regions
Internet Users by Region (MM)
Worldwide
1.324 1.222 111,4 96,6
+8%

Latin America

+15%

• Latin America and the Middle East/Africa are among the emerging markets with high growth rates • North America is the most saturated region globally, Russia is the main driver for the growth in the European region • Over 8% of the worlds internet users come from the LatAm region • 15 MM new web users were added between 2009 and 2010, a 15% increase

Key Takeaways

Asia Pacific

534,0 505,7 361,7 336,4 204,0 198,4

+6%

Europe

+8%

North America

+3%

Middle East- Africa

112,5 85,2

+32%

• The steady rise in broadband penetration will help fuel the growth of internet users within the region further

Dec 2009

Dec 2010

% Growth Y-o-Y Source:- comScore Media Metrix, December 2010

Young Audience Dominates Online Population in Latin America
% Composition of Internet Audience Worldwide 53%

• There is a high % of young users in Latin America in comparison to the worldwide average • 62% of the internet audience is between 15-35 years old

Key Takeaways

27%

26%

22%

14%

12%

Latin America

62%

33%

29%

20%

11% 7%

Age Groups

15-24

25-34

35-44

44-55

55+

Source:- comScore Media Metrix February 2011

Social Networking, Search and News are Categories with Highest Reach in LatAm Region
% Reach of Key Categories in LatAm
Social Networking Search/Navigation News/Information Community E-mail Multimedia Photos Blogs Instant Messengers Technology Retail Downloads Games Sports
41% 37% 34% 52% 61% 72% 80% 76% 98%

91% 86%

• Social Networking is the top category in Latin America • Sharing photos is becoming a key component of the Social Networking experience • IM usage still remains the highest in Latin America, despite the drastic drop in the global usage

Key Takeaways

Reach Focus

69%

79%

78%

75% 70% 70%

Growth Focus

55%

69%

67%

• Blogs and News/Info Sites capture significant portion of web audience
• There is also good potential and growth in categories likes Retail, Sports, etc

66% 62%
63% 64% 58% 57% 56% 53% Latin America

Worldwide
Source:- comScore Media Metrix February 2011

Engagement Levels in LatAm are Over Worldwide Average; Argentina and Brazil Lead Within
Total Hours Online Per Visitor in Latin America (per month)
Brazil Mexico Argentina Colombia Chile Venezuela Puerto Rico 22 21 23 21 19 19 15

• Overall usage levels have remained relatively high in Latin America • LatAm users spend approximately 22 hours online each month (global average 21 hours) • Companies in the LatAm region have a higher potential of engaging consumers by using digital platforms

Key Takeaways

Worldwide Average – 21 Overall LatAm Average – 22
Source:- comScore Media Metrix February 2011

Reach of Social Networking Sites Continues to be Very High Throughout LatAm, Outpacing Worldwide Average
% Reach of Social Networking Sites Globally
Worldwide Asia Pacific Europe North America Middle East Latin America 51,2% 91,0% 98,0% 83,1% 97,5% 75,7%

• 98% of audience use Social Networking sites with Colombia and Argentina dominating within the region • In terms of Reach, Facebook is leader, however Orkut’s strong following in Brazil generates heavier usage for the category overall

Key Takeaways

Brazil Mexico Argentina Colombia Chile Peru Venezuela Puerto Rico

93,6% 92,4% 97,0% 97,2% 96,0% 90,9% 96,2% 95,8%

• Latin America is also home to some of the most highly penetrated markets for Twitter
• Other players like Hi5, Sonico and Fotolog.com still hold a strong audience in Latin America

Source:- comScore Media Metrix February 2011

Thank You

43

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