Google (Nasdaq: GOOG) expects the weighting of online advertising as a percentage of overall advertising revenue in Latin America to double in the next 18-24 months from the current 4%, Alberto Arebalos, Google's communications and public affairs director for Latin America, told BNamericas.
Arebalos estimates the global advertising market is worth some US$450bn-500bn, of which 6-7% is online, and Latin America accounts for some 3% of that amount, or an estimated US$1bn.
According to Arebalos, companies in more developed Latin American markets such as Chile only really started to realize in 2010 the importance of having a strong presence online, meaning that 2011 will be a big year for "evangelizing" businesses to spend more of the their advertising budget on the web.
"People spend more and more time online. Our challenge this year is to help more companies put a larger amount of that spending on online advertising," Arebalos said.
According to the executive, 60% of automobile purchases in Argentina start on the web, be that through information searches, comparing prices, reading criticisms or reading feedback from other customers.
"People are not passive on the internet, merely receiving messages. They're looking for your brand so you have to be there," Arebalos said.
According to the executive, the benefit of online advertising is that it is much easier to measure a campaign's success through clicks on banners and page views, as well as actual purchases and therefore return on investment.
In Peru, there are currently some 600,000 searches daily on Google on finance-related terms. But only in the last three months have banks or financial institutions started advertising online with Google, Arebalos said.
He added said that companies are innovating a lot with online advertising, bringing in web 2.0 sites like YouTube.
Online advertising currently accounts for some 97% of Google's global revenues.