Mon, 07 Mar 2022 17:40:00 GMT
Brazil’s ad spend is expected to reach $15 billion by 2024 and is quickly becoming one of the largest and fastest-growing advertising ad industries on the planet. Faced with a particularly interesting – and potentially difficult – 12 months, we decided to speak with some of our Brazilian members about what they expect for their local ad market and their companies in 2022.
This year has not only already played host to the Winter Olympics, but – believe it or not – we will also witness a football World Cup before the year is up. Even with the nation’s undeniable love for the beautiful game and their hopes running high for the ‘Verde-Amarela’ to raise the trophy for the sixth time, this may yet be overshadowed by another historic event in the nation’s political sphere. This is because, also being anticipated as an upcoming influence on Brazil’s ad industry, this year is their presidential elections, which are set to take place in the latter half of 2022 – so, undoubtedly a busy and important year for Brazil and the agencies we spoke with.
To discuss their predictions for the trends and themes set to arise in 2022, LBB’s Ben Conway spoke with representatives from five Brazilian creative agencies: TracyLocke Brasil DDB, Africa, Wunderman Thompson Brazil, Hungry Man Brazil and Santa Clara. They spoke about their companies’ and the industry’s post-pandemic evolutions, upcoming industry trends and innovations and discussed how the presidential elections will play its part in Brazil’s ad industry this year.
2022 will be a year of presidential elections in Brazil, so the economy should fluctuate because of the market mood and the fear that one or another candidate wins. Even so, I want to talk about the Brazil that works. The one that wakes up early and creates startups, that become unicorns, generates technological solutions that range from agriculture to medicine and that reinvents itself independently of governments. Brazil's creative force is in all areas and this has a direct impact on the local advertising industry, which feeds back this engineering like oil. It will be a year to live our mantra at DDB: ‘Unexpected Works’.
Due to the digitisation of services at the beginning of the pandemic, today the country has the possibility to experience the maturation of ecommerce platforms, which involves more comprehensive, faster logistics. In general, the challenge will be the cost of production and transport, which can affect inflation and thus bring more promotional campaigns to generate cash. A good solution would be for brands to remember the path of Brazilian unicorns and focus on solutions with specialists for the fragmented journey that the shopper increasingly experiences.
2022 will be a year of many opportunities due to demands related to ESG (environmental, social and governance), the incorporation of new technologies in the communication industry, and changes in the working relationship. Extreme pressure and instability [is expected] from the second half of the year due to the proximity to the presidential elections.
The evolution of our business is based on three factors that we have worked hard on: being suitable for people, for the business, and society. We are a creative company. A company of solutions that is attentive to the business results of our customers. Our performance evolves according to the cultural and business needs of our customers. ESG, metaverse, NFTs, social action – whatever the topic, we bring consultants to the table and prototype the best solutions. In 2022, we will pay more attention to the themes that make our brands' purposes accurate and act more present in society.
I will highlight three macro trends that we need to be aware of - one related to purpose, another to new technologies, and the last to consumption:
ESG: The lack of belief in the Brazilian government is already forcing companies to take the lead on social issues. It is also growing how consumers positively evaluate companies that actually do and not just speak. Making ‘purpose’ real and tangible is a significant trend.
Metaverse, NFTs, cryptocurrency: It is essential to understand how brands will act legally and positively in the metaverse. Including how to produce and capitalise on this macro-universe with benefits for its consumers. Understanding behaviour and needs will be vital so that brands do not repeat the basic behaviours of other brands and understand how important it is to evolve and serve the audience in this new universe of possibilities that opens up.
True omnichannel: The growing online consumption in the pandemic is a habit that will never change. Understanding the natural relationship of the brand in an omnichannel vision will be vital. Comms planning and more assertive thinking about the importance of each sales channel will be fundamental for effective results.
Africa has a solid area of culture and business intelligence (BI) called Culture Lab. In addition to centralising all the tools for trends and network monitoring, we read macro trends and systematic studies on new technologies. The idea is to map and test. When TikTok began to expand in Brazil, we incorporated the reading of who was trending and the most consumed content on the network. Now we are doing the same with the metaverse, including an NFT lab.
The Brazilian advertising industry grew approximately 12% in 2021, ranking Brazil among one of the top five markets and one of the five fastest-growing. Africa has started operating globally with some of its local accounts. There is a growing interest in the effective creativity produced here from both the Latin and American markets.
Brands can do better, and the consumer expectation is for change. This is the year for that to happen - both for brands and the people - who have a chance to be better to themselves, the environment, their communities, and the work environments we operate in. In Brazil, our emotional state and the country’s context urge for transformation, and we’re more confident than ever we have the tools to achieve this - as there’s a growing demand (no longer invisible) to do something different and better for the people.
A brand’s role in people’s lives has changed as they now operate like economic, political, social, and health institutions which are responsible for shaping the world we live in. It’s time for brands to have more definition around their purpose to encourage some real change. During this process, brands should be open to experimenting with new formats of communicating with customers and new uses of technology. The brands that stand out have genuine brand activism from the inside-out and encapsulate entertainment experiments, to give consumers a better experience and overall, better product.
2022 for Brazil is packed with trouble, but at the same time, opportunity. It’s both an election year and a World Cup year - almost back to back towards the end of the year. This will make it very hard for brands to find space and attention. For advertising commercials, it will be tricky, by all means.
On the other hand, the industry in Brazil – with regards to production companies that are also producing entertainment series, feature films, docu-series, documentaries - are booming. [There are] An overload of productions happening. For ads altogether, this makes it even more challenging when top professionals are steering towards the entertainment projects in such a weird year for ads.
For Hungry Man Brazil in 2022, we are loaded with work in entertainment and continue to be well-positioned in the ad industry with our director roster. We continue to look for outstanding talent that understands our company culture: An international company within a very Brazilian market. We have gone through a complete change in our company structure and model since late 2019/early 2020 by removing ‘overweight’ across the board - eliminating ‘commercial division’ and ‘entertainment division’. We are now a team without borders between ads and entertainment. Our in-house team of EPs and LPs now looks at everything as ‘Projects’, regardless of whether it’s from an agency, client direct or streamer. It’s been a challenge as all changes are, but the team the partners handpicked to be part of this change has responded extremely well. We found out there were professionals that were in the commercial division wanting to learn and be part of entertainment and vice-versa. So we combined everything into one team. Sure, there are certain differences between commercials and entertainment but all in all, it’s film production.
In Brazil, production companies are fully responsible for post – we hold the rights to ads beyond talent due to specific Brazilian laws, therefore making a difference as to what stage we actually begin a project, be it developing scripts after a pitch is sold to a streamer or distributor, or bidding on an approved script by an agency or in house client direct. We are poised to have one of the best years since our opening in Brazil back in 2005.
Most people who voted for the current government expected reform coming from the Minister of Economics, especially concerning labour laws, tax structure and government spending. Then covid occurred and almost the opposite happened - no reform was passed and the government was forced to increase spending to keep the economy going. Interest rates were kept at an all-time low to favour industry, but that also means dollars flow away from the country and the Real becomes weaker, increasing inflation. We expect these trends to revert with the end of the pandemic. In fact, interest rates are higher again, and we may see inflation going down. Nevertheless, the scenario is still very uncertain as we will have presidential elections in a very polarised country, and the world is not really doing much better.
Everyone seems to have become an agency: consultancies, media vehicles, new digital players, old agencies in search of new models. Each of these groups has flaws. Consultancies know little about branding and creative work, media vehicles compete with themselves and cannot provide unbiased media planning, new digital players know nothing about strategy and seem to often rely on the same tactics (e.g., micro-influencers), and old agencies are still old. We like to think we have a good blend of capabilities and a good modular model that makes us look like a consultancy or an agency or any of those above depending on the circumstances and client demand. Although it is tough to change a market with so much background noise, we have been growing new business at a pace above our expectations.
Total ad spending in Brazil was near $12 billion US in 2020 and it is expected to reach $15 billion by 2024. The share of these investments captured by different platforms has been changing drastically over the past decade, much as in the rest of the world, and trends are expected to continue. The picture below from a recent Deloitte report summarises the message.
Photo by Rogério Trilhafavela from Pexels