A look at the country’s ad dollars
“Ronaldo will open doors, win business, participate in presentations, and
influence strategic planning,” said
Sergio Amado, president of Ogilvy
Group in Brazil, who will help oversee
9ine and usher clients of parent WPP
Group into the venture.
Similarly, San Francisco-based
Pereira & O’Dell will launch a new
business unit in 2011 called PodSport,
to serve as a marketing consultant to
North American brands interested in
investing in Brazil. Pereira CEO
Andrew O’Dell said, “Everyone looks
at Brazil now like they looked at China
10 years ago.”
Although China has become the
world’s biggest market for everything
from cars to cellphone subscribers,
Brazil, the fifth-largest country by
both size and population, at almost 200
million people, isn’t all that far behind.
Brazil is the world’s biggest market for
deodorants, No. 2 in children’s prod-
ucts and No. 3 in cosmetics, according
to Euromonitor. Jato Dynamics ranks
Brazil as No. 4 in car sales. Brazil is the
sixth-biggest ad market, with 2010 ad
spend of $14.2 billion, according to
ZenithOptimedia’s October 2010 fore-
Fueling that growth—and a jump
in ad spending of more than 20% in
the first 10 months of this year—is
Brazil’s Class C, an emerging middle
class of almost 100 million people that
has exploded in the last couple years,
snapping up their first cars and houses
and swapping basic cellphones for
More recently, the 60 million-strong Class D, which ranks even lower
on the country’s socioeconomic scale,
started shopping for computers and
MEASURED MEDIA SPENDING
Hyundai Motor Co.
- 6. 3
Figures are in millions of U.S. dollars, discounted by AA. Data from Ibope Brazil.
plasma TV sets. Brazil also has one of
the most creative, vibrant advertising
markets in the world, which treats its
top creatives like rock stars.
Icaro Doria, who left his job as a
group creative director at Goodby,
Silverstein & Partners to return to his
native Brazil to open a Wieden &
Kennedy office in Sao Paulo’s trendy
bohemian Vila Madalena neighborhood, attributes Brazil’s boom to a rare
stretch of stable government and economic growth.
“Brazil has such momentum,” he
said. “It’s become more like a normal,
stable place, and Brazil has a lot of very
entrepreneurial people. It’s a more
mature and welcoming space.”
As agencies gear up in Brazil, the
police are, too, in an effort to make the
country safer before the 2014 World
Cup. But after years of tolerating drug
gangs in Rio de Janeiro, the govern-
ment’s efforts to crack down sparked a
violent reaction late last month when
drug gangs burned cars and fought
pitched battles with police in Rio’s
streets and slums, leaving more than
30 people dead.
“You can’t let the fear overtake the
opportunity,” said Tom Bernardin, Leo
Burnett’s CEO. “And it has to
Some agencies are launching their
own outposts, like Wieden and digital
agency R/GA, which opened in Sao
Paulo this spring. Others, like Arnold,
want to grow by acquisitions.
According to CEO Andrew Bennet,
Arnold will launch in the first quarter
with the help of a local agency.
WPP and Omnicom are the biggest
holding companies in Brazil. Of the
top 15 agencies in 2009, 12 are multinationals. Independents include DPZ,
NBS, Moma, Propeg and Santa Clara,
which split from its former international partner SapientNitro when that
agency became more technology-focused.
“We’re open to international deals,”
said Fernando Campos, Santa Clara’s
Many agencies have been in Brazil
for decades, of course. But even they are
doubling down. In October, Publicis
Creative left Goodby
for his native Brazil
to open new W&K
office in Sao Paulo.
news, go to
bought a 49% stake in Talent, the
largest remaining independent agency
in Brazil, for about $110 million, and
McCann Erickson merged with
W/Brasil in June. Digital agencies are
being snapped up. Leo Burnett’s Mr.
Bernardin has just been to Brazil—
twice—and says he’s interested in
“alliances” in areas like shopper marketing and design.
“Brazil holds enormous opportuni-
ty, but it can be a challenging place to do
business,” said Colin Spooner, Pereira
& O’Dell’s director of new business
who will run the new PodSport unit.
“Cultural differences, language barriers
and an economy undergoing enormous
change can be intimidating.”
TBWA learned that the hard way.
The agency flopped in Brazil after buy-
ing the wrong agency, three times. The
fourth deal—a savvy local shop called
Lew Lara—was the right one, and came
in the nick of time to participate in
TBWA’s successful global pitch for Visa,
which mandated a strong Brazilian
But not everyone is welcome. Media
agencies are effectively banned in
Brazil, under rules that only let full-service agencies buy media. It’s a cozy
arrangement for Brazil’s powerful
media owners and the ad agencies who
rake in lucrative volume discounts
from the media. Agencies invest part of
that windfall in paying top creatives
lavish salaries, one of the reasons Brazil
has such a wealth of creative talent.
“There’s no incentive [to open a
media agency] and you can be penalized. I don’t think the situation is going
to change very soon,” said Mauricio
Sabogal, worldwide managing director
CONTRIBUTING: RUPAL PAREKH AND KUNUR PATEL
GLOBAL MEDIA TRENDS FROM P. 3
broadcast locally produced soap operas
since the 1970s, many of which reach
80 million viewers.
4) THE U.S. AND WESTERN EUROPE ARE LOSING
NEWSPAPER CIRCULATION, BUT THE REST OF THE
WORLD IS EXPERIENCING A NEWSPAPER BOOM.
In both number of titles and circulation, Asia, Africa and Latin America are
climbing at an annual double-digit
pace. And China and India are now
home to nearly half the world’s top 100
dailies, with the average newspaper
boasting a circulation of 109,000 or
more. In India alone, the number of
paid dailies has surged by 44%, to
2,700 titles since 2005, accounting for
more than one-fifth of all newspaper
titles on the planet.
5) HERE’S WHY YOU NEED TO KEEP AN EYE ON
When it comes to time spent on the
site, Facebook crushes all rivals, with
six hours vs. less than half that time
for every other site in the top 10.
Facebook’s user base is 517 million
people, 70% of whom live outside the
U.S. According to a DDB study of
1,642 international Facebook users,
the average self-avowed fan is 31 years
old and follows nine brands. Three-quarters (76%) have already pressed
“like” to signal they are a fan of a
brand. In return, they expect special
treatment (95%) and are willing to
advocate for the brand if necessary
6) CYBER CAFÉS ARE THE ENTRY FOR EMERGING
MARKET POPULATIONS TO GET ONLINE.
The innovation of “cyber cafés” has
helped spread internet use in emerging
markets. In South Korea, people can
rent broadband access for roughly 80
cents an hour, eliminating the need for
costly monthly subscriptions, and leading to Koreans’ embrace of social networking and multiplayer online gaming. Cyber cafes or “warnets” have since
spread to Indonesia, where only 5% of
homes have a PC; and to Brazil, where
the cafes are known as “LAN houses”
and have hourly rates as low as $1.
7) BRIC LEADS FOR ONLINE VIDEO CONSUMPTION.
Brazil, Russia, India, China and
Indonesia are home to the most avid
consumers of online video. Internet
users in China and Indonesia, for
example, were 26% more likely than
the average user globally to watch
online video, while Indian viewers
were 21% more likely and both
Russians and Brazilians were 11%
more likely. Increasingly, the internet
will become TV. In 2009, one third of
all internet traffic was video. This year,
that figure will climb to 40%, on its
way to a projected 91% by 2014,
according to Cisco.
8) INTERNET USAGE AND PENETRATION RATES ARE
HOBBLED BY ACCESS COSTS. MOBILE ISN’T.
Only 81 million Indians (7% of the
population) use the internet, but six
times as many (507 million) have
mobile phones. The same pattern is
playing out worldwide. Witness PC vs.
mobile penetration rates for China
(20% vs. 57%); India (4% vs. 41%);
Brazil (32% vs. 86%); and Indonesia
(5% vs. 66%).
9) NETBOOKS, E-READERS, TABLETS WILL DRIVE
GROWTH OF INTERNET USE.
The proliferation of new screens, netbooks, e-readers and tablets is expected
to quadruple global IP traffic by 2014,
according to Cisco. By then, the equivalent of 12 billion DVDs will be crisscrossing online monthly. The biggest
growth driver is video—data-rich 3D
and HD streams delivered to computers,
TV sets and to phones, which will lead
global mobile traffic to double every
year for the foreseeable future.
10) FOR THE FORESEEABLE FUTURE, THE FORECAST
FOR THE PLANET’S MEDIA HABITS IS IN A WORD,
Time spent with computers has tripled
over the past decade among kids age 8
to 18. The bulk of this group’s time is
spent on social media, followed by
games, video sites and instant messaging. The average kid packs a total of 10
hours and 45 minutes worth of media
content into a daily seven and a half
hours of media exposure. Just think
how this group will consume media in
10 years when they enter the work
world and start consuming in earnest.
Global Media Habits 2010, an 8,000-word
report with 24 charts and 14 Power Point-ready slides to download, can be
purchased at Ad Age.com/whitepapers
Family Wines, maker of Kendall-
Jackson, digital projects are led by 27-
year-old Adam Beaugh, who formerly
did web work for Texas Gov. Rick Perry.
His latest initiative is called “every bottle
tells a story” and will encourage drinkers
to submit wine-drinking stories online
via various channels. “Wine’s a social
product,” Mr. Beaugh said. “ We need to
create an opportunity for people to
interact with it a little better without
sounding too gimmicky.”
Some companies have formed spe-
cial millennial divisions, such as The
Wine Group, maker of Franzia, whose
Underdog Wine Merchants unit is
enjoying big success with Cupcake
Vineyards. The brand was the 14th-
best-selling wine for the four-week
period ending Oct. 31, with sales jump-
ing 250%, according to SymphonyIRI.
Still, marketers risk overplaying
their hand if they reach out too aggressively to the generation, known for its
suspicion of overt selling tactics. For
instance, some industry executives are
noticing a backlash against trendy, edgier wine labels.
“If you order a wine that’s got a
dancing gorilla on it and it tastes bad,
then who’s stupid? You are,” said Don
Sebastiani Jr., CEO of Don Sebastiani &
Sons, seller of Smoking Loon and other
wine brands that make no concerted
effort to reach millennials. “If you have
a great bottle of wine that’s priced right
in a really classy package, you will be