Art & Commerce: Southern Exposure

The world is open for business. And independent creative agencies based in the U.S. can grow fast out there. Here’s how.

Only an estimated 2 percent of the creative shops in the world’s fast-growing BRIC economies—Brazil, Russia, India and China—are independents. The rest are controlled by holding companies. But the sands are shifting.

If you look at the financial returns of the holding companies, and the number of gold Lions won by creatives in these countries, you can see that the big payouts are roaring out of the BRIC nations.

So it stands to reason that with all the global opportunity at our fingertips, independent creative agencies with a sense of adventure should take advantage of this flat new Earth. The U.S. advertising market is the world’s largest, but that doesn’t mean you shouldn’t go fishing in other ponds. Great opportunity exists outside our borders, and who knows who you’ll meet? Some of the sharpest minds out there want out of the holding company-dominated agencies. Clients, meanwhile, are looking for an edge and want to be part of the change brought on by incredible economic growth. Take India, for example, which is reeling from the recent launch of independent Wieden + Kennedy there. No longer is it only the domain of Hindustan Thompson or Ogilvy & Mather. Now a new face has emerged and the creative culture has been forever changed. And Indians will be hungry for much more.

Developing countries like India are moving fast. They are constantly looking for better models, newer brands. At the same time, people in the domestic ad biz think it’s pretty cool to mesh with talent from other countries. Many agencies in New York now include some of the sharpest minds from Sweden, Germany, Brazil, Japan and the U.K. Global mash-up brings new cultures, new ideas and new approaches to old problems, while giving a ton of energy and enthusiasm to an industry that could certainly use it. Who doesn’t like to spend time with cool people from a faraway place?

But looking for opportunities, as we did when we decided to open our new office in Brazil, is also fraught with significant challenges. Cultural differences are perhaps the biggest hurdle. In Brazil, the advertiser pays agencies with media fees, and separate fees for strategic and creative development are virtually unheard of. For many years, Brazilian advertising agencies have survived as media brokers, gaining commission over sold spaces and a volume payment from the media vehicles. With this practice so ingrained, fixing a value on an idea is a big deal. So Alexandre Peralta, CEO of StrawberryFrog in Sao Paulo, invented a new and better way: The client cut a considerable portion of the AOR fee, which went to cover our fees for developing the ideas presented to them. We have been one of the first agencies in Brazil to no longer rely on the traditional media commission. This creates opportunities for other start-up agencies aiming to take advantage of the huge market in Brazil.

The only way to minimize such difficulties is to spend many hours going over the local culture and process. Having an already established company culture is key. And it has to be universal and understandable enough to inspire colleagues who don’t speak English as a first language. It’s a process of liberating creativity and connecting thinkers who span great distances.

A lot of time and effort went into building our founding team. The right people are pretty darn important. We chose types who like their freedom, who don’t want to be pampered or smothered or scared to death by the environment of a big agency. Pirates write better ads than the guys in the navy because clutter-piercing ideas cannot be produced by disciplined committees.

Another thing that binds us is the way clients are thinking about their businesses today. They want them to be sharper, bolder and faster. Here, once again, is where the market is evolving towards a new model. On the global clock, someone is always working somewhere. Clients need a partner who comes up with ideas quicker than the other guys. Because whether you are in Brazil or New York, it is essential to move faster than the competitor and the market.

We chose Brazil because of the fantastic growth happening there. And we saw it as a smart alternative to China. It’s also one of the best places for creative talent, especially in the all-important digital arena. If you like to keep score, you will have seen that Brazil came first in the Cyber Lions last year, edging out the Swedes who dominated in previous years. We wanted access to this incredible talent pool. We also wanted to put our money where our mouth was—we always recommend boldness to our clients—so it was high time for us to embark on a bold new initiative. Opening an office in Brazil was just the thing.