Communications Implications in Brazil’s Challenging Environment

Brazil is off to a rocky start in 2015. The economy has slowed to a halt, with some economists suggesting Brazil will fall into a recession. The Brazilian Real is at its lowest rate in the past ten years. Brazil’s ongoing struggles with Operation Car Wash and the political fallout are making it difficult for President Dilma Rousseff to govern. Inflation is soaring, adding to the ongoing economic challenges in the country.

All in all, Brazil is facing an extraordinary crisis of leadership. Brazilians have taken to expressing this frustration against President Rousseff’s administration, calling for her party to be held accountable.

What does this mean when it comes to communicators and brands looking to engage with Brazilian audiences? In short, it’s a difficult time to engage in this country. Brazilians have been overwhelmed with negative news for the past several months and this environment makes it challenging for brands to effectively reach audiences. There are three factors that are contributing to this difficulty:

  • Pessimism by Association: It’s an extremely challenging time for companies to be more proactive with positive news. The fallout from Lava Jato (“car wash”), which implicates Petrobras in a massive political scandal, makes it difficult for companies in the energy sector to communicate credibly. As the investigation goes deeper, more politicians and government contractors are becoming tangled in this complicated situation. Proactive communication in these industries and sectors is a difficult task.
  • Olympics: As the pessimism grows around government officials and leadership, it has the potential to spread to the 2016 Summer Olympics. With just about a year and a half to go until the big event, this ongoing crisis in Brazil’s leadership will likely make it extremely challenging both for the Olympics organizers and its sponsors to communicate with their respective audiences. Sponsors and brands involved should be extremely cautious in this moment.
  • Lack of Trust: According to Edelman’s 2015 Trust Barometer, companies headquartered in Brazil are only trusted by 38 percent of informed publics, among the lowest scores of all countries analyzed in the study. Brazil’s ongoing woes will likely not help this score improve. While Brazil will continue to struggle from the home field, it will also likely encounter obstacles with telling its story abroad.

What is the solution to Brazil’s challenges? It will be critical for the government to transparently and justly resolve Lava Jato, as well as work to address the ongoing economic concerns. Until this is achieved, it will be difficult for brands to compete for attention without risk of association in the country’s struggles.

It is worth noting that Brazil’s military dictatorship ended on March 15, 1985. Residents in São Paulo will be marking this anniversary with a protest to call for President Rousseff’s impeachment this weekend. Despite the overarching negativity of this protest, it would not have been allowed in the military dictatorship. While Brazil experiencing growing pains, it is certainly making progress on its way to becoming a global economic powerhouse.

Nick Lucido is a Daniel J. Edelman Global Fellow for Edelman working in São Paulo