I recently visited three majors cities in Brazil: Porto Alegre, São Paulo and Rio de Janeiro and was clear to me the great opportunity to do business in Brazil, specifically in the digital media space.
The Brazilian market overview
Since the 2008 recession, industrial powers around the world have been working hard to come out of their own financial crisis. On the other hand, the BRIC countries (Brazil, Russia, India and China) have been bolstered by the economic growth generated by a huge population with increasing purchasing power. In Latin America, Brazil has arguably the greatest potential, not only due to its large consumer population and its natural resources, but also because of upcoming global sporting events: the World Cup in 2014 and the Olympic Games in 2016.
In 2011, Brazil recorded one of the highest growths of 3G in Latin America (up 130% compared to 2010) with more than 40 million users. Added to this, carriers are offering aggressive data plans for web-enabled phones and smartphones purchases. The result: Brazil is quickly growing into a powerful mobile market.
The Estadão Jornal recently reported that the Brazilian government intends to include smartphones in the so-called Act of Goodness (Lei do Bem). The goal is to reduce or remove smartphones taxes for products manufactured in Brazil, as is already granted for personal computers and tablets.
According to the Minister of Communications, the demand is huge as people want to stay connected to the Internet everywhere they go. In addition, the Minister is discussing tax exemption for equipment required for broadband deployment. This will further propel the digital economy in Brazil.
According to details shared by Peter Fernandez, the director of sales and mobile advertising for Google Latin America, access to the Google search mobile site grew 1000% in the last twelve months, a similar pattern to what was registered in the U.S. AdMob (Google’s mobile advertising network) saw inventory grow from 133 million to 1.18 billion page views during the period of Aug 2010 to Aug 2011, including websites and mobile applications. According to Peter, Google has over 90,000 apps and mobile sites in their network in Brazil and the total number of impressions in mobile applications is up to six times higher than in mobile sites.
InMobi (the independent mobile advertising network) also celebrated the growth of mobile internet in Latin America. In their first twelve months, their inventory rose from 800 million impressions per month to 2.85 billion. Brazil, in turn, moved up from the third largest market in the region during this period to the second largest market, totaling about 700 million impressions.
Are Brazilian publishers ready?
During my visit, I had the opportunity to meet with top tier publishers in Brazil. My first thought was that those who think that Brazil is lagging behind the new digital trends are completely wrong. Major publishers such as the Folha de São Paulo newspaper have already launched their Mobile Browser in HTML5 following the pay wall business model adopted by other major brands, such as the Financial Times. Others are still struggling to maintain old CMS’s and are lacking suitable developers.
As noted in a previous post (Embracing short-term content apps and more tips to make your mobile app strategy work) Brazilian mobile users are using smartphones differently than tablets and tablets differently than desktop PCs. Brazilian publishers are aware of this and they have begun to launch ‘digital editions’ (also knows as ‘print replicas’) for iPad, free content on smartphones (to generate traffic), sponsored apps, as well as paid apps for premium content.
Brazilian publishers are also experiencing the same challenges on mobile as other media companies around the world; time-to-market, distributing content cross-device, complex back-end integration, obtaining audience intelligence, and monetization.
The mobile market in Brazil will continue growing at a fast pace, with millions of avid consumers and brands looking to make the right digital investments, spurred by advertising budgets leading up to both the World Cup and the Olympic Games.
Polar Mobile is actively participating in this emerging market, stay tuned to our blog for updates.