Media agencies are illegal in Brazil and ads have to be placed via a creative shop. Adrian Pennington reports on the land of full service.
 
Like the vast tracts of rainforest that have legal protection, Brazil’s communications market is a conservation success story. In the second-largest ad market in the Americas, media is the sole preserve of the creative agency.The rules have help protect the country’s major media owner Organizações Globo, which operates Brazil’s huge national TVnetwork TVGlobo, taking 75% of TVad spend in addition to its interests in radio, newspapers and cable and satellite TV.
 
Together with Grupo Abril, owner of 70% of the top circulation magazines and the region’s largest pay-TVoperator Sistem de Televisao, it dominates the country’s media landscape.
 
“The laws which prevent media agencies from operating in Brazil are absolutely a symptom of protectionism. They dictate that he who creates the ad must place it,” says David Byles, the Mexico City-based chief executive of GroupM Latin America.
 
There are additional rules too: you can’t centralise a buy, trade with multiple clients in one negotiation, and all buys have to be linked to a specific client. Business cannot be pitched or based on media costs. “The situation has prevented Brazil from developing in the same direction as the rest of the world to the detriment of clients,” claims Byles.
 

This view is, unsurprisingly, not held by Brazilian-based executives. According to Monica de Carvalho, media director at Dm9DDB: “[Our business model] allows clients to maximise investments, using the agency’s creativity and intelligence tools in all areas.”

Mixed blessing 

Ricardo Figueira, creative director at AgenciaClick, now part of Isobar, believes there are good and bad consequences.

“What’s good is the opportunity to ‘think’ creative and media together, to bring much more than just a message exposition to the client. Both media and creative teams must be engaged with the whole advertising experience.

“On the other hand, there’s a danger to creativity because some agencies can attach less importance to the creative once the money comes in from the media. A lot of agencies give creative work free to clients because they already have the media fee.”
 
The media specialists can be the first point of contact in agencies for some clients, but as Mike Segrue, global chief client officer at Kinetic, observes: “There’s arguably a shortage of media talent as it loses out to account handling or creative.”
 

Agencies have responded by looking to improve links between planners and brand account managers. “We are acutely aware there are shortcomings to the full-service system. But we also know the separation of media and creative in other markets has a lot of limitations too,” says JWT head of media Ezra Geld.

Quality work 
Compulsory full-service has not inhibited Brazil from producing internationally recognised work as demonstrated by the gongs it picks up each year.
 
“Media are much more flexible than they are in Europe,” says Geld citing a campaign for Unilever Sunsilk in which JWT used magazine Criativa to create three different covers for one issue, each featuring a model with a different hair style.
 
Nevertheless, the perception of the value that media agencies add is changing, partly driven by clients and by the pace of change in media itself, which has seen the market become more competitive.
 
While multi-channel TV only has 20% penetration, Globo TV’s share of viewing has slipped to 50% as upmarket viewers drift to pay TV, and downmarket audiences have been lost to the Record Network.
 
Moreover internet and mobile will prove less easy to regulate. Brazil is also starting free-to-air digital TV and although analogue won’t switch-off until 2016, digital devices are expected to proliferate.
 
“Brazilians are very talkative and naturally curious. This phenomenon becomes stronger when allied with digital technology. The game is over for old and traditional media,” says Figueira.
 
The market may be changing but few believe creative and media will split. “It’s more about a review of investments based on consumer behaviour,” he stresses..