Inflation and foreign exchange rates bring ad spending in Argentina to a halt
Overall ad spending in Argentina registered 24% annual growth in 2012 to reach ARS20.4 billion ($4.48 billion), according to a March 2013 Cámara Argentina de Agencias de Medios (CAAM) report. Radio and internet scored the greatest gains between 2011 and 2012, at 44% and 28%, respectively.
A closer look at the data, however, offers a more nuanced picture of the current state of the advertising industry in Argentina. When measured by the number of ads sold (volume), total media advertising registered annual reductions during five of the six years between 2007 and 2012. Worryingly, the greatest drop took place last year, when advertisers purchased 5.3% fewer ads than in 2011. Most likely, inflation accounts for the divergent trends in advertising value growth and advertising volume growth in Argentina during recent years.
While inflation has given the illusion of a growing advertising industry in Argentina, deepening reductions in advertising volume will ultimately cause total media ad spending in Argentina to dip in 2013. eMarketer predicts dollar investments in the industry will drop to $3.84 billion this year, a 6.7% reduction when compared with 2012.
Overall ad spending will quickly bounce back, though, posting 6% and 7% improvements in 2014 and 2015, respectively. The recovery, fueled by the 2014 FIFA World Cup and a presidential election the following year, will bring total ad spending up to $4.36 billion in 2015.
Double-digit growth rates are unlikely in the current economic landscape in Argentina, but total ad spending will continue to post positive growth rates between 2014 and 2017.
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