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Colombia continues to solidify its status as a rising digital star in Latin America. eMarketer expects the country to have the third-highest internet user penetration (61.1%) in the region in 2015, trailing only Chile (70.5%) and Argentina (66.8%). Colombia will become the third-largest regional digital market in absolute terms by 2018, when it will be home to 31.3 million internet users, edging Argentina (31.1 million) for the first time that year. The country has already joined the top three smartphone markets in Latin America and will have more than 16 million users in 2015.
Under these circumstances, digital ad spending surpassed the quarter-trillion Colombian peso mark in 2014. According to the Interactive Advertising Bureau Colombia (IAB Colombia) and PricewaterhouseCoopers (PwC), digital ad spending rose 18.5% to reach COP255.4 billion ($127.8 million) last year. The growth rate, however, was the lowest in the country since 2011.
eMarketer estimates digital ad spending in Brazil, Mexico and Argentina—the three largest digital advertising markets in Latin America—stood at $2.64 billion, $739.5 million and $456.1 million, respectively, in 2014.
Based on traditional media ad spending reports from the Asociación Nacional de Medios de Comunicación (ASOMEDIOS) (TV, radio and magazine ad spending) and the Asociación Colombiana de Editores de Diarios y Medios Informativos (Andiarios) (newspaper ad spending), IAB Colombia and PwC estimated digital ad spending represented 9.3% of total media expenditure in Colombia in 2014, a marginal gain from the 8.7% share it held a year earlier. By comparison, the regional average stood at 14.8% of all advertising investments in 2014, according to our calculations.
By and large, digital advertising in Colombia still focuses on the fixed web despite the country’s preeminent role in smartphone adoption in Latin America. While investment in mobile advertising in the country expanded 117.0% in 2014—far outstripping online ad spending’s 16.3% rise—such a massive expansion came from a very low base. According to IAB Colombia/PwC, mobile ad spending reached only COP10.0 billion ($5.0 million)—a 3.9% share of all digital ad spending in the country—while online ad spending totaled COP245.3 billion ($122.8 million).
As formats go, banners are still dominant in both online and mobile advertising in Colombia. About a third of online ad spending and half of mobile ad spending was devoted to banner ads in 2014. But trends in spending seemed to point at advertisers testing other formats. According to IAB Colombia/PwC, banner ads’ share of online and mobile ad spending registered respective reductions of 4.0 and 25.1 percentage points last year.
On the opposite end, online video and social media experienced the greatest spending growth compared with all other formats used to advertise via fixed internet properties in Colombia in 2014. These improvements, however, were not enough to break into the top three formats in absolute spending terms. That list was led by banner ads, rich media, and classifieds and directories.
Mobile advertising is much less developed in Colombia, and large swings in spending are to be expected as advertisers find their footing in the space. Expenditure on mobile video advertising, for example, skyrocketed from a negligible COP9.0 million ($4,504) in 2013 to COP1.3 billion ($650,644)—a nearly 14,000% annual growth rate—in 2014, pushing video’s share of mobile ad spend from 0.2% to 12.6%. Mobile search ad spending also registered a meteoric rise from COP514.9 million ($257,705) to COP2.9 billion ($1.5 million) and took a 28.4% slice of mobile ad budgets—nearly triple its share from 2013.
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