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On the night of June 27, thousands of International Advertising Festival delegates lined up at a post-awards ceremony buffet, shared champagne toasts and oohed as a dazzling fireworks display lit the sky over Cannes, France.

But one of the evening's top honorees, Nizan Guanaes, was nowhere to be found. Just minutes after storming the stage at the Palais des Festivals to accept the coveted Agency of the Year award, the president of DM9 DDB was in front of a large-screen TV in a hospitality suite at the Majestic hotel. Waving a can of Brazilian beer in one hand and a cigarette in the other, the brash, curly haired creative cheered his country's team in a World Cup soccer match.

Although Brazil ultimately lost the World Cup, the nation's performance at the Cannes festival was stellar. Not only did Brazil go home with more Lions (35) than any country except the U.S. and U.K., but Mr. Guanaes' Sao Paulo agency was the first Agency of the Year not headquartered in London or New York.

Brazil's outstanding creative performance over the last few years, especially in print, is rapidly raising the international profile of a vibrant $8.6 billion ad market, the world's sixth largest. Brazil is one of the top five markets in the world for a vast array of consumer products, from beer to detergent to TV sets.

"I think Brazil will be the next superpower," Mr. Guanaes said with enormous conviction. "People think it will be China or India, but it's us."

Driving the emergence of Brazil as an advertising force is a combination of factors led by the return four years ago of economic and political stability. That eased the pressure for quick fixes imposed by hyperinflation, allowing Brazil's advertising messages to grow more sophisticated and subtle and its marketers to focus on building brands, not just moving merchandise.

Few expect that focus to waver despite recent economic turmoil that has raised fears about a return to recession and hyperinflation.

Brazilians are skilled communicators, and their ads, like the people, brim with passion, humor and pride. While the nation's culture is not easily understood by outsiders, the rest of the world is paying close attention.

"Brazil stopped being so exotic; it's more mainstream now," said Marcello Serpa, creative director and partner at Almap/ BBDO, Sao Paulo. "Brazilian advertising has a very light touch. It's one of our best qualities, but it makes us vulnerable."

Mr. Serpa has transformed one of Brazil's oldest and most traditional agencies into a hot shop over the last three years. Almap/BBDO was the third-most-awarded agency at Cannes this year, behind only DM9 DDB and U.S. agency TBWA Chiat/Day, Playa del Rey, Calif. (all three are part of Omnicom Group).

Messrs. Serpa, 35, and Guanaes, 40, are leading members of a small band of young creative stars running major multinational agencies in Brazil with extraordinary degrees of freedom and often generous equity stakes. Others include Fabio Fernandes, 35, who built F/Nazca Saatchi & Saatchi from scratch over the last four years.

In the past, these creatives would have headed their own local agencies. DM9, for example, was a thriving independent before Mr. Guanaes sold a majority stake to DDB Needham Worldwide in June 1997.

"There's a feeling that if you're not in an international partnership with someone, you'll fail," said Alexandre Gama, 40, who joined Young & Rubicam, Sao Paulo, in 1996 as creative director and is now also CEO. "You can be a partner and they can give you resources. We're seduced by this combination."

In the last four years, global agency networks have scrambled to establish a substantial presence in Brazil as global marketers rushed in to win the hearts and wallets of Brazilian consumers.

Just last month, investors pledged more than $24 billion for telephone and cellular phone licenses to enter Brazil's exploding telecommunications industry, where there's a yearlong waiting list for mobile phone service.

"They'll be big advertisers next year," said Jose Eduardo Cazarin, the Sao Paulo-based president of Lowe & Partners Latin America. "One investor, Telefonica, uses 11 ad agencies in Spain, so no one knows who they'll pick here."

Eight new car marketers are building Brazilian factories scheduled to open next year. With 1.6 million cars sold a year, traffic is already so gridlocked that Sao Paulo drivers by law have to leave their cars home one day a week.

Multinational marketers are encouraged by four rare years of economic stability, with inflation tamed from a daily rate of 2% before 1994 to a forecast of 2% inflation for all of 1998. Consumers are taking advantage by spending money on everything from soft drinks to TV sets.

"Between 1994 and 1998, more than 30 million TV sets were sold in Brazil," said Octavio Florisbal, commercial superintendent of Rede Globo, Brazil's giant TV network. "Some were replacements or second sets for the kids, but household penetration went from 70% to 85%."

Unemployment, however, is at a scary all-time peak of about 8%, and Brazilian interest rates are among the highest in the world as the government and businesses desperately try to fend off Asia's encroaching financial crisis.

Inured to decades of insane inflation, Brazilians still use prolonged installment plans to buy consumer goods such as clothes and stereos that they often can't afford, plunging retailers into bankruptcy when payments abruptly stop.

"It's like a roller coaster," said Y&R's Mr. Gama. "We're not familiar with stability. We get enthusiastic quickly and we worry quickly."

Right now, continuing stability seems to depend on whether Brazil's president, Fernando Henrique Cardoso, is re-elected on Oct. 4. With DM9 DDB handling Mr. Cardoso's ad campaign, Mr. Guanaes is working non-stop to help make that happen.

Under Brazil's peculiar election advertising laws, each political party gets seemingly endless hours of free TV airtime. So Mr. Guanaes and his team are churning out 72 minutes of election ads a week, promising Mr. Cardoso will beat unemployment as surely as he conquered inflation.

"My clients and my colleagues are rooting for me because they know how terrible it would be if he lost," Mr. Guanaes said.

Dining late one night at Brasilia's Piantella, a buoyant but exhausted Mr. Guanaes talked about how deeply ingrained advertising is in Brazil's popular culture.

"Pick any table or anyone on the street," Mr. Guanaes said. If that random consumer can't instantly identify the advertising or positioning for DM9 client Bavaria beer, he said, "I'll give you shares in DM9."

Can every diner in a crowded, cosmopolitan restaurant really sing the jingle for a beer brand that only went national this year (albeit one that already has a 7% share of the Brazilian beer market)?

Maybe not. At a nearby table, Carmelo Furci is baffled by the Bavaria challenge. He turns out to be chairman of Telecom Italia -- an Italian who doesn't even like beer. But the Brazilian engineer dining with him, Jose Messina, obligingly bursts into Bavaria's "Today Is Friday" theme song in Portuguese.

Of two other Brazilians unscientifically polled, one imitated the commercial's rapid chant of "Bavaria, Bavaria, Bavaria," while the other unerringly described the brew's positioning.

"Advertising has a level of interest in Brazil that doesn't exist in other places," said Almap/BBDO's Mr. Serpa. "People talk about liking or not liking new commercials as if they're TV shows."

There are even commercial celebrities. Bombril, the leading household cleaning products marketer, has used the same spokesman in over 300 humorous commercials spanning two decades. Over the years, he has been fired, campaigned to elect Bombril as governor, even dressed up as Monica Lewinsky.

"Recent research showed that more than 90% of consumers adored the campaign and were anxious to see more new commercials with the same person," said Washington Olivetto, president of Bombril's agency W/Brasil, Sao Paulo, and a living creative legend.

Back in the restaurant, Mr. Guanaes' mobile phone rings at midnight, summoning him to a meeting. The results are in from the focus groups across Brazil that watched the evening's election advertising, and they have to be quickly analyzed so shooting can begin on the next round of ads.

"I'll be happy to tell my son I contributed to change my country," said Mr. Guanaes, who's often rumored to have political aspirations. "But this is my last campaign."

Brazil's leading creative executives have healthy egos, and the country's creative community functions like an extended family, with endless feuds and personality conflicts. The community unites at events such as Cannes, where snaring as many awards as possible becomes a life-and-death mission for Brazilian judges, their results closely monitored by a horde of trade journalists flown in from Sao Paulo.

Analyzing the creative history of Brazilian advertising is like tracking a family tree.

In the beginning, there was DPZ, now Brazil's third-largest agency after McCann-Erickson Worldwide and Y&R. After 30 years, the agency's three sexagenarian partners -- Roberto Duailibi, Francesc Petit and Jose Zaragosa -- are still running three different creative departments, housed separately and eccentrically on the independent agency's fifth, sixth and seventh floors.

At DPZ, Mr. Olivetto became a creative star while still in his teens. He left to start his own agency in 1986, now called W/Brasil, to DPZ's great displeasure. At W/Brasil, Mr. Guanaes emerged as a star copywriter before breaking away to set up DM9 nine years ago. He and Mr. Olivetto still don't speak.

Mr. Serpa worked at DM9 with Mr. Guanaes before joining Almap/BBDO. His move was disastrously timed, coming just two weeks before his ad for Diet Guarana, a local Amazon fruit soft drink, won Cannes' print Grand Prix in 1995. That left both men wrangling over credit for the ad, a simple shot of a taut stomach with a Diet Guarana bottle cap for a belly button.

Although Messrs. Guanaes and Serpa now greet each other with warm hugs, the spirit of competition between them remains strong.

"The problem with Brazilians," said Mr. Serpa, a 6-foot-5-inch gentle giant who spent much of his 20s working and studying in Germany, "is that none of us can bear to share being at the top."

Despite economic crises and ego clashes, few of Brazil's creative stars have any interest in working outside their own country. Or even shifting to broader management roles; a frequently heard phrase in the Brazilian creative community translates to "I'm staying in the kitchen," meaning that person is keeping a close eye on the creative process.

And it's that focus on creating great work by a handful of top talents that's the real reason for the emergence of Brazil's advertising industry on the global stage, said Lowe & Partners' Mr. Cazarin.

"A whole generation of very good creatives are now mature and running leading agencies," he said. "We've been flourishing for the last year or two with the sheer quantity of good work."

The international ad community would surely agree.

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