As users Tune into Digital Video in Mexico – Advertisers Join In.

Digital video appears to be at an inflection point in Mexico, according to a new eMarketer report, “Digital Video in Mexico: A Growing Viewership Attracts Content and Advertising.” 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.

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 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.

Other studies have put digital video penetration rates in the country even higher.

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.

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.

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 by YouTube, of course) has been declining, falling from 70% in December 2011 to 62% in August 2012. The shift likely reflects growing availability of other channels—and long-form channels in particular.

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. 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, as major telecom and broadcasting companies 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.

For more information at http://www.emarketer.com