Digital Video In Mexico by eMarketer

1. DIGITAL
VIDEO IN
MEXICO
A Growing Viewership
Attracts Content and
Advertising
MARCH 2013
Osbaldo Franco
Contributors:Tobi Elkin, Monica Peart

2. DIGITAL VIDEO IN MEXICO: A GROWING VIEWERSHIP ATTRACTS CONTENT AND ADVERTISING ©2013 EMARKETER INC. ALL RIGHTS RESERVED 2
EXECUTIVE SUMMARY
Digital video appears to be at an inflection point
in Mexico.Video consumption is widespread, but
viewers are mostly watching short-form content. In
addition, advertisers have committed a very small
portion of their budgets to the video channel.
But the sheer size of the market will likely spur an
increase in ad spending.TV programmers are also paying
greater attention to digital viewers, which should lead to
higher consumption.
This report provides an overview of Mexico’s digital video
consumption patterns and nascent video advertising
market. It includes insights from key brands and video
platforms about audience patterns and preferences. In
addition, it explores mobile video’s growing audience and
its implications for marketers.
KEY QUESTIONS
■■ How widespread is digital video viewing in Mexico?
■■ Who are these digital video viewers?
■■ What are digital video viewers in Mexico watching?
■■ How are content producers and advertisers tapping
into Mexico’s digital video viewership?
% of respondents
Online Video Categories Watched by Online Video
Viewers in Mexico, Nov 2012
Music videos 44%
News 29%
TV series 28%
Movies 27%
YouTube bloggers 26%
Amateur video 17%
Documentaries 16%
Cartoons 12%
Sports 11%
Concerts 10%
Short films 10%
Note: ages 13-70; yesterday
Source: Interactive Advertising Bureau México (IAB México), "Estudio de
consumo de medios entre internautas mexicanos" conducted by Millward
Brown, Jan 29, 2013
151716 www.eMarketer.com
CONTENTS
3 Digital Video Viewership in Mexico
6 Digital Video Advertising
8 Conclusions
8 eMarketer Interviews
8 Related eMarketer Reports
9 Related Links
9 Editorial and Production Contributors

3. DIGITAL VIDEO IN MEXICO: A GROWING VIEWERSHIP ATTRACTS CONTENT AND ADVERTISING ©2013 EMARKETER INC. ALL RIGHTS RESERVED 3
DIGITAL VIDEO VIEWERSHIP
IN MEXICO
Digital video usage has grown rapidly in Mexico.
Last year, it outpaced overall internet adoption
growth. But this medium is still a new format in a
developing internet market. Consumers mainly watch
short-form video, and video advertising is just in the
experimental phase.
Data about digital video uptake in Mexico is relatively
scarce, but the available numbers signal its widespread
use—and potential for growth.
A February 2013 comScore report estimated that there
were more than 23 million online video viewers in Mexico
in December 2012.This figure, which includes internet
users ages 15 and older and excludes access from
mobile devices and internet cafe connections, represents
a nearly 10% year-over-year increase, or an additional
2 million internet users watching online video since
December 2011. comScore put Mexico’s online video user
penetration rate at 81% of all internet users.
% of internet users
Online Video Viewers in Select Countries and
Worldwide, Dec 2012
Argentina 96%
Chile 92%
US 85%
Brazil 82%
Mexico 81%
Worldwide 84%
Note: ages 15+; home and work locations; excludes traffic from public
computers such as internet cafes and access from mobile phones and
PDAs
Source: comScore Video Metrix, "A Market Unbalanced - The Dollars Aren't
Following The Engaged Audiences," Feb 7, 2013
152241 www.eMarketer.com
A November 2012 survey from Interactive Advertising
Bureau México (IAB México) conducted by Millward
Brown found a higher penetration rate, reporting that
93% of internet users ages 13 to 70 in Mexico were
digital video viewers.The higher number likely reflects the
inclusion of mobile viewers.
% of internet users
Digital Video Viewers in Mexico, Nov 2012
Watch online videos
93%
Don't
watch
7%
Note: n=1,156 ages 13-70; view via any device
Source: Interactive Advertising Bureau México (IAB México), "Estudio de
consumo de medios entre internautas mexicanos" conducted by Millward
Brown, Jan 29, 2013
151715 www.eMarketer.com
IAB México’s and comScore’s data confirmed that digital
video is used widely by Mexico’s online population. But
it’s less clear how deeply users are engaged with the
video they consume.
For instance, a Garritz Online Media survey found that
only 22.4% of internet users polled said that watching
video was a “main activity” when they went online. By
comparison, more than 95% of respondents said email
was a main activity, and more than three-quarters said the
same for both social networks and search.
% of respondents in each group
Online Activities of Internet Users in Mexico,
by Demographic, July 2012
Gender Age
Email
Social network
Search
News
IM
Listen to music
Download music
Upload photos
Banking
Shop online
Gaming
Video consumption
Upload videos
Blogging
Other
Male
95.9%
80.0%
76.0%
77.4%
64.2%
60.1%
48.1%
39.3%
41.1%
41.2%
33.3%
27.2%
17.4%
11.3%
1.7%
Female
94.6%
84.9%
79.2%
68.8%
71.7%
60.8%
45.4%
51.5%
34.5%
33.2%
38.4%
17.3%
15.0%
9.7%
2.3%
15-24
91.0%
93.7%
68.8%
63.7%
73.3%
72.1%
58.6%
50.8%
13.8%
26.4%
46.6%
32.4%
18.6%
11.4%
1.5%
25-34
95.6%
89.8%
78.1%
72.9%
76.3%
65.4%
55.0%
56.3%
43.2%
49.0%
42.5%
28.1%
20.1%
14.3%
1.6%
35-44
95.4%
81.6%
78.6%
76.5%
65.3%
55.1%
41.8%
41.8%
41.3%
39.0%
31.6%
15.6%
13.5%
8.7%
2.6%
45+
98.0%
68.2%
82.6%
77.7%
58.8%
52.3%
35.4%
34.5%
48.3%
34.1%
25.6%
16.0%
13.6%
8.2%
2.2%
Total
95.3%
82.4%
77.5%
73.2%
67.8%
60.5%
46.8%
45.2%
37.9%
37.4%
35.8%
22.4%
16.2%
10.5%
2.0%
Note: n=1,558
Source: Garritz Online Media, "Hábitos multidispositivo online de México,"
Oct 1, 2012
152805 www.eMarketer.com

4. DIGITAL VIDEO IN MEXICO: A GROWING VIEWERSHIP ATTRACTS CONTENT AND ADVERTISING ©2013 EMARKETER INC. ALL RIGHTS RESERVED 4
One reason digital video may not be top of mind for most
internet users in Mexico is because they currently tend
to watch shorter videos. In fact, a global examination of
video usage conducted by Cisco found that Mexico’s ratio
of long- to short-form video traffic was the lowest among
all the nations studied.
Cisco defines long-form video as video content generally
greater than 7 minutes in length and short-form video as
user-generated video and other video clips generally less
than 7 minutes in length.
The Cisco Visual Networking Index found that Mexico’s
ratio of long- to short-form video traffic in 2011 was
0.5 times, well below the general Latin America ratio of
1.4 times and the worldwide average of 5.3 times.The US
measure came in at 8 times.
But signs suggest that the emphasis on short-form video
may be shifting. According to comScore, the share of
videos served by Google in Mexico (led byYouTube, of
course) has been declining, falling from 70% in December
2011 to 62% in August 2012.
That is not to say thatYouTube is not thriving in Mexico.
According to John Farrell, director of content partnerships
for Latin America atYouTube, “There are about 40 million
internet users in Mexico, andYouTube has 90% reach. …
Our audience in Mexico has grown more than 180% year
over year in terms of views and watch time.”
Instead, the shift likely reflects growing availability of
other channels—and long-form channels in particular. For
example, broadcasting giantTelevisa shifted its digital
strategy roughly a year ago and expects to complete a
consolidation of its online video properties under the
televisa.com website this year.
According to Michel Bauer, general sales director at
Televisa Interactive Media,Televisa’s digital arm, “Our
reach right now is around 8% to 10% of unique viewers,
and the average time spent [onTelevisa Interactive
Media properties] is around 16 minutes.” It is likely that
the company’s most popular categories, 40-minute
soap opera episodes and 90-minute soccer matches,
will continue to push up the average digital video
viewing session.
VIDEO CONTENTAND MOBILE DEVICES
Mobile phone penetration and mobile internet adoption
are still low in Mexico compared with regional averages.
But a large portion of the existing mobile user base is
already using the devices to consume video.
According toThe Competitive Intelligence Unit (CIU),
a Mexico City-based telecom consultancy, there were
nearly 6 million mobile video viewers in the country in
May 2012.This count includes any device that connects to
the internet through a mobile broadband subscription and
excludes Wi-Fi. According to eMarketer estimates, there
were 17.1 million mobile internet users in Mexico for the
entire year of 2012, so CIU’s data would suggest that at
least one-third of those mobile internet users consumed
mobile video.
“This year we will have anywhere between 18% to 22%
of our traffic coming through mobile in Mexico,” said
Farrell.YouTube expects that figure to continue to grow.
“If Mexico follows the trajectory we have seen in some
of our more advanced markets, that number will approach
40% to 50%” in the coming years, Farrell added.
It is foreseeable that greater adoption of advanced mobile
devices will indeed spur digital video consumption in the
year ahead, especially among lower socioeconomic level
(SEL) users, who are likely to substitute other forms of
entertainment with digital video.
An IAB México and Millward Brown poll found that mobile
internet users from SELs C- and lower were more likely
to have watched online video on a mobile device (24%).
Only 18% of respondents in the upper SELs performed
this activity.

5. DIGITAL VIDEO IN MEXICO: A GROWING VIEWERSHIP ATTRACTS CONTENT AND ADVERTISING ©2013 EMARKETER INC. ALL RIGHTS RESERVED 5
% of respondents in each group
Mobile Internet Activities Performed by Mobile
Internet Users in Mexico, by Socioeconomic Level*,
March 2012
Social networking
Online search
Chat or instant messaging
Email
News
Music downloads
Dictionary/encyclopedia
Online games
Watch online video
Portals
Online radio
Movies (reviews, theater websites)
Technology
Government
ABC+
(n=519)
59%
56%
34%
54%
38%
26%
25%
17%
18%
27%
15%
17%
16%
16%
C
(n=213)
59%
53%
33%
48%
37%
28%
24%
23%
18%
25%
17%
17%
-
-
C-D+DE
(n=141)
70%
54%
46%
40%
32%
27%
24%
24%
24%
20%
16%
15%
15%
-
Note: *as defined by the Asociación Mexicana de Agencias de
Investigación de Mercado y Opinión Pública (AMAI)
Source: Interactive Advertising Bureau México (IAB México) and Millward
Brown, "Estudio de Usos y Hábitos de Dispositivos Móviles - Niveles
Socioeconómicos" sponsored by Mobext and Terra, Nov 28, 2012
150086 www.eMarketer.com
Tablet users, who tend to be affluent, are on the other
end of the economic spectrum.
According to Defoe, a market research company based in
Mexico City, tablet penetration reached 4% of Mexico’s
population, or about 4.6 million people, in May 2012.
An April 2012 CIU study of tablet users in Mexico
found that 70% watched video clips or movies on
these devices.
% of respondents
Tablet Activities Performed by Tablet Users in Mexico,
April 2012
Email
88%
Browsing the internet
87%
Social networking
81%
Games
75%
Listening to music
72%
Watching video clips or movies
70%
Viewing photos
68%
Reading documents or ebooks
65%
Reading magazines or newspapers
46%
Taking photos
42%
GPS
39%
Note: n=161
Source: The Competitive Intelligence Unit, Nov 6, 2012
147263 www.eMarketer.com
Using Defoe’s tablet penetration estimate alongside
CIU’s tablet video viewership estimate, the approximate
number of tablet video viewers in Mexico works out to
about 3.2 million in the first half of 2012.

6. DIGITAL VIDEO IN MEXICO: A GROWING VIEWERSHIP ATTRACTS CONTENT AND ADVERTISING ©2013 EMARKETER INC. ALL RIGHTS RESERVED 6
DIGITAL VIDEO ADVERTISING
Perhaps not surprisingly, digital video advertising is
still in its infancy in Mexico. A May 2012 report from
IAB México and PricewaterhouseCoopers (PwC) put
the total online video ad spend in 2011 at a mere
MXN100 million, or less than $8 million.
That figure seems certain to grow—and quickly. IAB
México and PwC’s estimate, which excludes mobile
video, works out to barely 2% of total digital ad spending,
using eMarketer’s estimate of $373.7 million for 2011.
That tiny percentage seems much too low for a market
where approximately 80% to 90% of internet users
consume online video.
Meanwhile, content choices are growing rapidly,
which should in turn spur consumption. Major telecom
and broadcasting companies such as América Móvil
(Clarovideo and UnoTV), Cinépolis (Klic), Grupo Salinas
(TotalMovie), Netflix andTelevisa have launched or
revamped streaming services in Mexico in the last
18 months.
And the 2014 FIFA World Cup is likely to drive big gains as
well, with Mexico’s avid soccer fans watching video of the
event via just about any device available.
According toYouTube data, its video views in Mexico
quintupled between 2010 and 2012, and its ad revenues
have grown more than 100% annually in recent years.
YouTube usage has increased to such extent in Mexico
that the country ranks among the company’s top five
operations worldwide, according to Farrell.
Where and how advertisers will focus their video efforts
remains to be seen, but patterns are emerging.
Digital video viewers in Mexico tend to watch music
videos (44%) more than any other type, according to a
survey from IAB México conducted by Millward Brown.
News (29%) andTV series (28%) completed the top
three categories.
% of respondents
Online Video Categories Watched by Online Video
Viewers in Mexico, Nov 2012
Music videos 44%
News 29%
TV series 28%
Movies 27%
YouTube bloggers 26%
Amateur video 17%
Documentaries 16%
Cartoons 12%
Sports 11%
Concerts 10%
Short films 10%
Note: ages 13-70; yesterday
Source: Interactive Advertising Bureau México (IAB México), "Estudio de
consumo de medios entre internautas mexicanos" conducted by Millward
Brown, Jan 29, 2013
151716 www.eMarketer.com
Similar to these findings,YouTube’s most popular types of
video are entertainment and music.
Following the eyeballs, L’Oréal México is aiming to cover
some of those popular categories. According to Jimena
Sainz, corporate digital manager at L’Oréal México, “We
are planning to have our digital video ads around music,
fashion and someTV series.”
Coca-Cola México has used digital video advertising since
2009, gaining experience that it is now leveraging to
target consumers by brand in various categories. “Music
and sports are the most universal passion points for our
audiences,” said Ernesto Almada, interactive marketing
manager at Coca-Cola México. But the type of content
targeted, he added, depends on the brand.
Targeting the right audience also requires knowing what
demographic groups are more likely to consume the
content offered. In the case of digital, that audience is
often young and skews slightly male. “Our sweet spot is
what we call the C Generation—young men and women
ages 13 to 30 years. … We call them the C Generation
because they are connected, they create content and
they curate content,” saidYouTube’s Farrell.

7. DIGITAL VIDEO IN MEXICO: A GROWING VIEWERSHIP ATTRACTS CONTENT AND ADVERTISING ©2013 EMARKETER INC. ALL RIGHTS RESERVED 7
Unsurprisingly, pre-roll is the dominant ad format, and
repurposedTV ads are the most common creative.
“We run pre-roll using spots that run onTV, but we are
changing that,” saidTelevisa Interactive Media’s Bauer.
“We are trying to convince our clients that an ad with a
call to action or an [online] promotion will work better than
TV reruns.”
For now, brands are focusing their digital video strategy
on the largest digital media properties in Mexico. In
interviews, marketers tended to mentionYouTube,
Facebook, Google+ andTelevisa as their preferences.
Televisa and the Webnovela
With more than 60 years of experience producing content
for mass audiences in Mexico,Televisa is now zeroing in
on digital. Naturally, the world’s largest Spanish content
producer is leveraging its vast inventory of traditionalTV
content. But realizing the potential of the digital space, the
company is producing web-exclusive content, too.
During Q4 2012, the internet-only soap opera “Te presento
a Valentín” kicked-started the “webnovela” genre for
the company.The webnovela, comprising 15 6-minute
episodes, had such an impact thatTelevisa already has
three new productions of this type in its pipeline. In an
interview on televisa.com, Eugenio Cobo, soap opera
producer atTelevisa, said, “We will continue to experiment
with genres that target young viewers. It is [this young
audience] that seeks content through mobile devices at
any time.”
Sports, the other top online genre inTelevisa’s offer, will
also get plenty of attention going forward. After streaming
the 2010 FIFA World Cup online and expanding to mobile
devices for the UEFA Euro 2012, the company is already
planning its digital coverage of the 2014 FIFA World Cup
in Brazil. Unsurprisingly, in this soccer-crazy nation, the
hopes for the national team to qualify for the tournament
are high. “It is very important for the Mexican team to
go to the World Cup in Brazil next year.We think that
would double the amount of video watched through our
platforms [in 2014],” said Bauer.
GROWING INTEREST IN
BRANDED CONTENT
Content producers are not the only ones creating
web-specific content. “We are now trying to generate
digital video exclusively for the internet and not just
replicate what we do onTV,” said L’Oréal México’s Sainz.
“We are looking for choices that guarantee that our target
audience is watching the whole video and getting more
engaged with our content.”
Original content through branded channels is a common
marketing tactic in Mexico, not only among brands but
also among government entities and other organizations.
A quick search onYouTube turns up official Mexico
channels for brands such as Corona Extra, Nissan, Bimbo,
Universal Pictures, Warner Bros. Pictures, Movistar,
Electronic Arts andTecate beer.
Coca-Cola México, for instance, is “creating original
content that falls into the entertainment or theTV-series
category,” said Almada.
And L’Oréal México’s Sainz noted, “We are trying
to develop tutorials where a spokesperson shows
consumers how to use the product and then consumers
can show how they follow the steps and create their look.
These tutorials will be shareable.”

8. DIGITAL VIDEO IN MEXICO: A GROWING VIEWERSHIP ATTRACTS CONTENT AND ADVERTISING ©2013 EMARKETER INC. ALL RIGHTS RESERVED 8
CONCLUSIONS
Digital video remains an emerging sector in
Mexico. Data is relatively hard to come by in this still
nascent market.
Digital video consumption is widespread, but
engagement lags. By the existing measures, at least
eight out of 10 internet users in Mexico consume digital
video. But the medium is not necessarily top of mind, and
usage leans toward short-form content.
Mobile internet adoption has been slow in Mexico,
but video consumption via mobile shows strength.
Mobile could be a source of major growth, particularly for
lower-income internet users.
Digital video advertising is still in its infancy. Pre-roll is
the main form of advertising used, and creative tends to
be repurposed television advertising. But advertisers are
looking for more robust, digital-first solutions, not only in
paid media, but also in content marketing.
EMARKETER INTERVIEWS
Marketing in Mexico:Televisa ScoresThrough Novelas
and SportsVideos
Michel Bauer
General Sales Director
Televisa Interactive Media
Interview conducted on February 19, 2013
Marketing in Mexico:YouTube Boasts Cable
TV-Size Audience
John Farrell
Director of Content Partnerships for
Latin America
YouTube
Interview conducted on March 7, 2013
Marketing in Mexico: L’Oréal GrowsVideo Program
Jimena Sainz
Corporate Digital Manager
L’Oréal México
Interview conducted on February 26, 2013
Marketing in Mexico:Video Core Part of
Coke’s Strategy
Ernesto Almada
Interactive Marketing Manager
Coca-Cola México
Interview conducted on February 25, 2013
RELATED EMARKETER REPORTS
Mobile Mexico: Overcoming Obstacles to Growth
Digital Ad Spending in Mexico: Advertising Giants
Finally Join the Pioneers
Mexico Online: Usage Grows as Access Obstacles
GiveWay

9. DIGITAL VIDEO IN MEXICO: A GROWING VIEWERSHIP ATTRACTS CONTENT AND ADVERTISING ©2013 EMARKETER INC. ALL RIGHTS RESERVED 9
RELATED LINKS
América Móvil
Bimbo
Cinépolis
Cisco
Clarovideo
Coca-Cola México
comScore
Corona Extra
Defoe
Electronic Arts México
Facebook
Garritz Online Media
Google
Grupo Salinas
Interactive Advertising Bureau México
L’Oréal México
Millward Brown
Movistar México
Netflix
Nissan Mexicana
PricewaterhouseCoopers México
Tecate
Televisa
The Competitive Intelligence Unit
TotalMovie
Universal Pictures México
UnoTV
Warner Bros. Pictures México
YouTube
EDITORIAL AND
PRODUCTION CONTRIBUTORS
Cliff Annicelli Senior Editor
Kaitlin Carlin Copy Editor
Joanne DiCamillo Senior Production Artist
Stephanie Gehrsitz Senior Production Artist
Dana Hill Director of Production
Nicole Perrin Associate Editorial Director
Allie Smith Director of Charts