Mexico's battered peso, Venezuela's financial crisis and Colombia's political upheaval make this region a market-by-market venture, with some networks finding significant growth and others with double-digit losses.
Agencies need to view the region in the long term, build for the future and beware the pitfalls, said Joe DeDeo, vice chairman of Young & Rubicam, New York, who oversees Latin America for the third-ranked shop.
two largest holdings in the region. (Advertising Age International attributes to an agency network only the equity it owns in local shops.)
New account gains-including Ford Motor Co. in Brazil and AeroMexico in Mexico-bolstered Y&R, which also saw growth from existing regional clients.
REGIONAL GROWTH AIDS McCANN
Market leader McCann-Erickson Worldwide experienced regional growth of 2.9% in 1995, to $176.9 million gross income. McCann saw added advertising investment from existing accounts General Motors Corp., Coca-Cola Co., Unilever and Nestle.
Working with global brands helps stave off the effects of economic crises, "because these companies are looking at long-term investment, which means they will continue investing even in rough times," said Jens Olesen, regional director of McCann-Erickson Latin America/Caribbean and president of the firm's SÌo Paulo office, Brazil's leading shop.
NEEDED EXISTING WORK
He admitted McCann would have been in trouble without growth in its existing business.
Daniel Moure, regional managing director with Leo Burnett International, Miami, reported similar results. Regionwide, the agency's gross income grew to $65.8 million, up 2.1%. New business included taking local companies regional-marketers such as Bimbo, S.A., a Mexican bakery, and Arcor, an Argentine package-goods company.
A Fiat victory in Brazil also resulted in 35% growth in real terms in that market, he said. The growth trend continues into 1996, he adds.
"This is a better year than it was in 1995, for sure," Mr. Moure said.
With a large, youthful population; growing political, social and economic stability; and free-trade blocs, the Latin America audience is what marketers want-and are increasingly able to tap, said Angel Collado-Schwarz, CEO of Nazca S&S. The shop is the San Juan, Puerto Rico-based equity affiliate of Saatchi & Saatchi Advertising Worldwide, the No. 11 network in the region based on equity contribution. Among the 20 agencies in the Nazca S&S lineup, more are non-equity than equity.
"All of that put together motivates smart marketers," Mr. Collado said.
Marketers are catching on, and those in affected areas like Mexico now view the peso crisis as an opportunity rather than as a problem, said Liz Paul, director-strategic development and operations, J. Walter Thompson, Mexico City. It's been a tougher year financially, but it offers "more of an opportunity to make better advertising," Ms. Paul said.
As consumers have become discriminating shoppers-reading labels, taking lists to the market, shopping brands and prices-marketers and agencies have had to study new trends, Ms. Paul observed.
The agency in 1995 restructured its strategic planning unit, and it is studying consumers inside their homes (instead of in focus groups), she said.
"In a certain way, this is a tougher year for the advertising business in Mexico," said Ms. Paul. "It's made us smarter about the consumer."