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September 28, 2010
Brazil
I have just returned from a three day trip to Sao Paulo, my first time in Brazil for six years. Edelman acquired Significa, a leading CSR and brand attitude, strategy firm, increasing our size in Brazil by 60% and making us one of the top six firms. I met with chief executives, communications directors and media while in town. Here are a few observations:
1) Rise of the C class of consumers—This is the demographic making the equivalent of $20,000 per year. It now constitutes 46% of total consumers in the country. They are regular consumers of brands. They aspire to drive cars. It is the fastest growing segment in the world’s fifth largest country. The D class, making $6,000 per year, tends to be resident in the northern part of the country.
2) Global Reputation of Brazilian Companies—The Edelman Trust Barometer indicates that Brazilian corporations rank near the bottom of twelve nations on “trust to do the right thing,” by people around the world, along with Chinese and Russian firms. The PR directors of major companies such as Embraer, Vale and Bank Itau, recognize the issue. “Brand Brazil can no longer be football, Lula and Carnival,” said one of them. “We need to point up our innovation, beautiful environment and unique ability to manage diverse populations.”
3) Car Culture—The mass transit system in Sao Paulo is woefully inadequate for the size of population and broad geographic expanse of the city. The jammed roads are crying out for congestion pricing, new subways and ride-share programs.
4) Environment—The stated concern for preservation of natural resources stands in sharp contrast to the reality of a fast-growing, urbanized society. A drive along the river, the Marginal, is a shattering experience, with effluent pouring into what can only be described as an outdoor sewer, replete with floating plastic bottles and other detritus. Few other countries care more about a company embracing social purpose, according to the latest (and soon to be published) Edelman goodpurpose Study, with ¾ of those polled stating they would buy products from a company that supports causes.
5) Design—The modern buildings in Sao Paulo, from the cereal bowl shaped Hotel Unique to the dramatic Natura corporate headquarters gracefully inserted into the hillside, utilize bare cement, walkways that float in the air and long glass enclosed corridors that denote transparency.
6) Advertising Banned—I was stunned to find no outdoor advertising in Sao Paulo. Apparently the local citizenry, angered by the excessive “visual pollution,” made it a political issue. You cannot even find full building exhibitions of Gisele Bündchen (that is a real shame!) until you near the airport.
7) Politics, Who Cares?—You could hardly have guessed that a presidential election would be held in two weeks. It is a foregone conclusion that Lula’s designated successor, Dilma, will defeat the more conservative candidate. There is quite low expectation of government; business will push forward with its aggressive agenda regardless of public policy.
8) Self Confidence but Not Over Confidence—The Brazilian mindset has shifted to quiet assurance, based on expectation of continued strong demand for commodities and a rising industrial sector. There are still pointed jibes in Sao Paulo about the work ethic in Rio de Janiero (sounds like NYC about LA).
9) The PR Market—The market is remarkably well developed, with two very large firms doing $35 million each, plus two firms in the $15 million range. It seems that half of the business is government contracts for economic development, tourism and the like. The Brazilian multinationals are not yet big buyers of services from PR firms. The communications sector is still dominated by Brazilian advertising agencies, such as ABC run by well known entrepreneur Nizan Guanaes.
Much has changed in this country since my last visit, with domestic companies now convinced of their global destiny, hot architects with mandates to build creative showplaces and a burgeoning middle class. But the basic challenges of governance, infrastructure and branding remain. I plan to spend my Christmas break with the family in Rio, Buzios and the Iguazu waterfalls to get a better sense of this beautiful country.
Posted by Edelman at September 28, 2010 1:52 PM |
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Comments
Passionate about Brazil as I am, it's inspiring to read a summary of where - what I love to call - the Empire is currently representing as a nation, business, and PR opportunity. A true example of what's best in Latin America. Wish many other nations could define a clear identity as Brazil, a North to follow.
Posted by: Natalia Martinez at September 28, 2010 6:04 PM
The BRICs begin with a capital "B." There are interesting developments in green business, auto design and materials production. Helping Brazilian companies establish a respected position in the global dialog is a real opportunity -- and Iguazu Falls can not be beat!
Posted by: Tom Mattia at September 29, 2010 2:40 PM
It's very interesting to hear your comments about Brazil and the economic changes. The last time I visited Brazil, I taught a management course there and I felt as though the advertising and PR opportunities were untapped and had significant potential.
Posted by: Stephen Marberry at October 4, 2010 9:28 PM