Nizan Guanaes is leaving the Sao Paulo agency he started 11 years ago to join an Internet start-up. The company is looking to cash in on a fast-growing trend in Brazil, free online access, which is transforming the economic model for Internet providers.
Mr. Guanaes sold a majority stake in his shop, now known as DM9 DDB Publicidade, to DDB Worldwide in 1997. He stayed on as CEO, but also became an investor in Internet Gratis (Portuguese for Free Internet). Now, at the urging of IG's other investors, the 41-year-old Mr. Guanaes will become CEO of the company.
STRONG USER BASE
Launched in December, IG already has 1.2 million users. Along with a flock of new competitors, it is rapidly changing the business model for the Internet in Brazil by encouraging a stampede of new users and forcing service providers to make a living from ad revenue rather than monthly connection fees. Although only about 3% of Brazilians are online, they account for roughly half of all Internet users in Latin America.
"I accomplished a stage [in my life] and had 10 years of great success at DM9," Mr. Guanaes said. "But I was invited . . . to be CEO, and decided to take it. The Internet has unlimited possibilities. There's an entire change in the economic system happening."
Mr. Guanaes helped put Brazil on the international creative map when his agency's ad for a local diet soft drink won a print/poster Grand Prix at the International Advertising Festival in Cannes in 1993. DM9 DDB, which claimed 1998 billings of $230 million, was subsequently named the most-awarded agency at the festival in 1998 and 1999. Its clients include Microsoft Corp., Honda, Johnson & Johnson and Italian dairy products marketer Parmalat.
TREATED LIKE ROCK STARS
In Brazil, Mr. Guanaes is part of a small, elite group of top creatives known for making advertising that mirrors the popular culture and captivates Brazilians. As advertising celebrities, they are treated almost like rock stars. Mr. Guanaes' New Year's Eve party, held in his home state of Bahia in northern Brazil, was widely covered by the media.
There had been signs Mr. Guanaes was restless and ready for a new challenge. One of his creative partners, co-founder Tomas Lorente, left last year after disagreements over the future direction of the agency under DDB ownership. Mr. Lorente started his own shop, Age, with backing from Havas Advertising.
Deeply interested in politics -- he once expressed a desire to be elected governor of the state of Bahia -- Mr. Guanaes took a leave of absence in 1998 to successfully mastermind the ad campaign to re-elect Brazil's president, Fernando Henrique Cardoso.
Last year, he turned down a top job at Globo, Brazil's near-monopoly TV network. And lately he has been investing in entertainment-related businesses, culminating in his own investment fund, NG9.
Mr. Guanaes said DDB has been understanding about his departure. The executive was highly regarded at the agency network and was the first Latin American member of its board.
DDB Chairman-CEO Keith Reinhard in an internal memo praised Mr. Guanaes' "passion for creativity and excellence," adding, "Nizan has made an enormous contribution to DDB Worldwide, not only here in Brazil but to our network at large."
At DM9 DDB, Mr. Guanaes' post as CEO will be taken by another partner, Affonso Serra. In recent months, Mr. Guanaes had assembled a five-person creative board that will replace him and take a stake in the agency.