WPP Reading Room: Why Life Is Looking Up In Brazil. Y&R CEO says the time has come for Brazil to fulfill its potential

He's a TV star, socialite and published author - as well as being boss of his country's biggest ad agency. Y&R CEO Roberto Justus tells Andrew Downie that the time has come at last for Brazil to fulfill its potential

CEO Roberto Justus, Y&R, ACAO, Wunderman, Energy THE STORY of how Roberto Justus created one of Brazil's biggest ad agencies and rose to become a TV personality, author and one of the country's best-known faces, began in Paris in 1949.

Justus's father, a Jewish Hungarian who had survived World War II and was now fleeing Communism, was on the Champs Elysees waiting to go to the US when he heard someone shouting for engineers. The construction worker fought his way through the crowd and found himself at the gates of the Brazilian embassy. A few days later, with little more than the shirt on his back, he was on a ship to Rio de Janeiro to start a new life.

Fast forward 61 years and the engineer's son is now one of Brazil's biggest personalities, and a giant in the country's advertising industry. Justus is CEO of Y&R Brazil, but through his Newcomm Group also jointly controls - with partner WPP - Wunderman, Energy and Ação Premedia e Tecnologia. What's more, for six seasons now he has been the Brazilian impresario fronting The Apprentice TV show, and his success is such that he's about to host local versions of The Rebel Billionaire and Deal or No Deal. He has written two best-selling books, sang on a duets CD with one of Brazil's bestknown crooners and was recently voted the second most trusted youth leader in the world after Barack Obama.

And yet, Justus, a good-looking, fast talking, born salesman, does not take his success for granted. He is aware that hard work and luck are every bit as important as potential, an observation that applies to countries as well as individuals. Right now, Justus is convinced that not only is life good for him, it is good for Brazil as well. For Brazil, famous for being the country of the future, and the joke went, always would be, has at last started living up to its potential.

"For a long time we talked about Brazil's potential," Justus says, reeling off the fertile soil, the climate, and the creativity that are among the country's hallmarks. "When you looked at Brazil you saw a country that had all these factors in its favour. The day had to come when everything would fall into place. And that day has arrived. Brazil is now a world player and one that is respected."

With 191 million people Brazil boasts around half the population and GDP of South America. But for years it seemed unwilling or unable to fulfill its promise. It was hamstrung by military dictators, then laughably corrupt politicians, and ground down by hyperinflation and an economy that seemed to go from boom to bust according to a regular timetable.

Today, though, the world's fifth biggest country is also one of the most dynamic and interesting. It has tamed inflation and grown at an average annual rate of almost 5 per cent over the last decade, a feat rare outside China and India, two of the other members of the so-called BRIC countries of increasingly important developing nations.

President Luiz Inácio Lula da Silva's economic guidance helped it avoided the worst of the recession and unlike many G20 nations, it is already growing again. Brazil is rich in the commodities sought by the developed world and the Asian giants, and it is now the world's biggest producer or exporter of beef, chicken, sugar, coffee, soy beans, orange juice, ethanol and iron ore. Recent deep water oil discoveries off the Atlantic coast, meanwhile, were the second biggest anywhere in the world this century and their exploration, along with the country's aggressive endorsement of bio-fuels, promises to make Brazil into one of the 21st century's energy powers.

Brazil is also undergoing a consumer revolution: President Lula's social aid programs have helped more than 20 million people move from poverty into the consuming classes, benefiting everyone from the corner shop selling rice and beans, to the manufacturers of domestic appliances, to the government who rake in extra taxes.

As if to crown the magic moment, the country will host the 2014 World Cup and the 2016 Olympics, guaranteeing long overdue structural reforms. The federal government has promised to finance the World Cup to the tune of US $11.3 billion, and Rio de Janeiro will shell out a further US $14 billion in preparing for the Olympics.

That overwhelmingly rosy picture delights Justus, both as a proud Brazilian and as a businessman. The two events will have a profound effect on Brazil's $16 billion a year ad industry, he explains, and already, WPP is planning its sporting strategies for the years to come.
"Y&R has topped the industry's ranking for the last eight years. It counts many of Brazil's biggest firms among its clients"

"A big sporting event like the World Cup is a huge event for the advertising market," Justus says in an interview at his Y&R office in São Paulo, Brazil's biggest city. "Clients that are involved in sponsoring the events are already investing more than they would in a normal year. And the ones that didn't manage to get direct sponsorship of the events invest more so they don't lose out to those that do. All that generates investments and jobs and extra work for the agencies."

"WPP is holding a conference here in Rio in May to deal with the World Cup and Olympic Games. So we are already looking into what can be done in terms of business, and many others are doing the same thing. The opportunities are endless."

Justus should know. Under his tutelage, Y&R has topped the industry's ranking for the last eight years. It counts many of Brazil's biggest firms among its clients, companies such as American Express, Bradesco, Colgate-Palmolive, Danone, Goodyear, the Estado de S. Paulo newspaper, Telefonica and Vivo. With retailer Casas Bahia, it became the first Brazilian company to put an advertising team inside the client's office, and today around a third of the Y&R workforce is based on site at the Casas Bahia HQ.

The Brazilian advertising market remains an unusual one in that agencies are full service with media still onboard. That makes running the business easier and helps the bottom line, Justus says. "Thank God that we still maintain this service in our hands. I think it is better for agencies and in my opinion for clients if we don't have media bureaus. When the media buying and planning is inside the agency together with the creative and all the other services, the respect of the agency in the marketplace and the financial results are completely different. We still have a market that is very attractive for this reason." Justus has vast experience in how to run an agency, having started in 1981 when he shunned the chance to take over the family construction business and instead took a half stake in a small ad agency run by his brother-in-law's cousin.

They named the company Fischer & Justus Comunicações and it did well but Justus was never entirely happy and in 1998 he left to start Newcomm. It was an immediate success and in 2000 Bates Worldwide, the English firm owned by Cordiant, bought a stake and created NewcommBates. When WPP bought out Cordiant in 2004, the firm was renamed Grupo Newcomm and a merger with Y&R was effected.

Justus admits there are constraints working for a multinational group such as WPP, and he believes Brazilians are more agile in dealing with problems, a skill learnt during years of dictatorships and hyperinflation. However, he accepts those Anglo-Saxon constraints as the price to pay for the backing and infrastructure WPP provides.

"They are not as flexible as I am," he says with a slight sigh. "I have to act the same way they act in London and New York and that ties me down a bit but I understand it. It's is a big public company and, as long as my partners are comfortable, I am comfortable too. The advantages of being partner of a group like this are much greater than the disadvantages."

That might be because Justus no longer plays as hands-on a role as he did in the past. Now 54, and with a young child - Justus is married to Ticiane Pinheiro, the daughter of the original Girl from Ipanema - he delegates more and micromanages less, giving him more time to devote to other projects, especially television. Charismatic and telegenic, he is a natural for the small screen and his willingness to tell it as it is has made him a big hit. Such was his impact on The Apprentice that he has been invited to front two new quiz shows this year, Brazilian versions of The Rebel Billionaire and Deal or No Deal.

"I really enjoy doing it. It revitalizes me for my day to day routine," he says of his television exposure. "If it wasn't for this then I might be thinking it's time to retire. Over the last six years, I was able to get lots of ideas across and people took them on board and incorporated them into their lives. Lots of people have come up to me and said, 'I decided to open my own business because of the ideas and stimulus and examples you gave me on the show'. That was the best part of doing the program.

Another important point is the synergy between the advertising and entertainment world, which brings very good exposure for my clients in my programs." What the future holds is unclear, but it will certainly be in the spotlight. Justus shows no desire to give up his newfound media roles and he still enjoys the rush of doing deals. With Brazil growing, there has never been a better time to be involved, he says.

"Obviously my vision today is very different from 30 years ago," he says. "You can't do advertising without entertainment and you can't do advertising and entertainment without interactivity. I am very optimistic, if I had to start an advertising agency in Brazil at any time during the last 30 years, I'd start it now, given a choice."
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WPP: Ogilvy and Mather’s research defines the global rise of the 'New Muslim Consumer'

Together with the research the agency launches Ogilvy Noor, the world’s first multidisciplinary global Islamic branding practice.

KUALA LUMPUR — As political and business leaders of the Muslim world come together
in Kuala Lumpur for the 6th World Islamic Economic Conference, a tectonic shift is happening in the Muslim world. According to Ogilvy & Mather’s survey on “Islamic Branding”, a new generation is redefining what it means to be modern and Muslim, creating new meanings of religious pride, economic progress and global citizenship.

In partnership with TNS, Ogilvy & Mather’s two-year survey in the making reveals what drives Muslims as consumers, against the vast backdrop of ethnic, economic, political and religious diversity of the Muslim world. Researchers looked at Islam through the lens of the tangible effect it has on how lives are lived and how that in turn affects brands and business. The research has identified trends and opportunities that are emerging from the world’s most interesting, dynamic yet controversial “marketplace”.

The report, entitled ‘Brands, Islam and the New Muslim Consumer’ also serves as the launchpad for Ogilvy Noor, a multidisciplinary global Islamic Branding practice that aims to help brands better engage with Muslim consumers worldwide. The Muslim consumer is viewed as a critically important segment for marketers, with the halal segment alone worth US$2.1 trillion, and growing at US$500 billion annually.

The report debunks many of the stereotypes that surround Muslim consumer attitudes towards brands and their marketing communications. For example, halal labels, while important to showcase certification, are no longer sufficient to persuade the New Muslim Consumer that the company behind the product conducts its business in line with Islamic values.

Said Miles Young, Global CEO, Ogilvy & Mather Worldwide: “A market of 1.8 billion people that has scarcely been tapped, Muslim consumers offer enormous potential to businesses around the world – but only if their values are fully understood. While there are vast and colorful differences among the populations surveyed, we identified behavioral trends and insights that would be valuable to marketers in developing meaningful relationships with this emerging global constituency.”

Said Nazia Hussain, Director of Cultural Strategy, Ogilvy & Mather Global: “Driven by ambition and success, today’s young Muslim consumers are open to positive change and innovation just like consumers everywhere - but that change must be aligned with their values from the start.”

In addition, the survey provides invaluable insight into Shariah values and how brands can align with them. Significantly, the report sheds light on how these practices are closely aligned with the existing universal ideals of good business practices, such as authenticity and transparency, which have only become more important for global business in recent years. The study begins to draw parallels between the evolution of business practices toward sustainability and the values of Shariah compliance, creating opportunities for businesses to simultaneously capture the Muslim market share while implementing sustainability initiatives and ethical business practices

Similarly, despite the massive sums spent by financial services brands on Shariah-compliant banking services – Ogilvy Noor can reveal that the vast majority of consumers view this category as the least effective in terms of Shariah-compliance.

The study becomes particularly important given the risk of boycotting of brands which exists when Muslim consumers are alienated. Despite the evident economic potential, for example, Muslims are often overlooked by global brands for fear of getting it wrong. Ogilvy Noor aims to clear up the apprehension by shedding light on what works and what doesn’t with the modern Muslim consumer.

For these reasons, the research incorporates the groundbreaking Noor Brand Index, which, for the first time, benchmarks the appeal of specific brands to Muslim consumers. The Noor Category Index repeats this exercise at a category level.

The study analyses the factors that drive beneficial relationships with Muslim consumers, distilling the findings into an eight-step toolkit for branding success. It is required reading for all brands that want to deliver more effectively against the needs of the New Muslim Consumer.

About Ogilvy Noor
Ogilvy Noor is a multidisciplinary practice focused on Islamic branding, drawn from across the breadth and depth of Ogilvy & Mather Group’s global network. It is the world’s first bespoke Islamic Branding practice, offering expert practical advice on how to build brands that appeal to Muslim consumers, globally. Ogilvy Noor is led by a team of experts based across our key Muslim market offices worldwide: Dubai, Pakistan, Malaysia and the UK and our core team: John Goodman, President of Ogilvy Action Asia Pacific and President Ogilvy & Mather South and Southeast Asia, Nazia Hussain, Director of Cultural Strategy for Ogilvy & Mather globally, Tanya Dernaika, Planning Director for Memac Ogilvy across the Middle East, Zayn Khan, Regional Business Strategy Director for South and South East Asia, and Shazia Khan, Associate Planning Director at Ogilvy in Karachi. A wide network of communications professionals supports the core team across all the Muslim markets in which Ogilvy operates across 450 offices in 171 markets...WPP

For further information please contact:
Jane Fraser
65 98212914
Jane.fraser@ogilvy.com

WPP is 25 years young today. Professor Joe Bower of Harvard Business School assesses the story so far ..

REVIEWING the history of WPP, I am struck by three recurring themes: it has been guided by a consistent vision of how the marketing services industry would evolve to serve the changing needs of clients; it has paid careful attention to the importance of financial as well as creative performance; and its brilliant creative and financial success has been driven by a number of truly outstanding leaders, not least its founder and CEO, Sir Martin Sorrell.

Sorrell had left the job of Saatchi & Saatchi CFO in 1985 in order to pursue the idea of assembling a stable of “below the line” marketing service firms that would somehow develop the ability to provide a relatively full line of marketing services economically delivered to multinational clients. The strategy exploited two basic trends: non-media marketing services are growing faster than media advertising, and marketing services are growing faster outside the US than inside.The opportunity existed to use acquisitions to consolidate a fragmented industry. Hundreds of acquisitions followed. And as the Group was assembled, heavy investments were made in Asia where markets were growing fastest. WPP had its first main Board meeting in China in 1989.

Those two basic ideas were played out repeatedly over the next two-and-a-half decades with two important modifications to the strategy. The opportunity arose to buy J. Walter Thompson, the icon of the media marketing industry. Its acquisition and turn around were a wonderful success, providing the confidence and financial support for the next move, the acquisition of Ogilvy & Mather which nearly took down the young firm. Neither of these moves fit the original strategy in that they were “above the line” businesses, but it quickly became apparent that with the financial markets’ appreciation of WPP’s performance reflected in the stock price, there would be opportunities to use stock as currency to acquire the wonderful resources of a series of major advertising groups. Young & Rubicam, Grey, Cordiant, 24/7 Real Media and TNS followed the first two into the fold along with hundreds of leading marketing services companies.The second modification came with the digital revolution. WPP was early to recognize the challenge to conventional marketing communication and invested heavily in the firms that would provide the new means for reaching web-based consumers.

Over the 1990s and the 2000s the small Group strategy unit led by Eric Salama, and then by Mark Read, worked to grow by leveraging the power of WPP’s diverse disciplines at the same time that the individual pieces were encouraged to expand. By the opening of the new century, WPP found itself pitching and winning multi-billion dollar mandates for global marketers such as Vodafone, HSBC and BP. Achieving collaboration across cultures, geographies, disciplines and brands is rare.
"WPP was early to recognize the challenge to conventional marketing communication and invested heavily in the firms that would provide thenew means for reaching web-based consumers"

But if the strategy was a consistent part of the vision, so also was the organizational philosophy. The Group ensured that back-of-the-house disciplines were strong and transparent. Treasury was strengthened. Budgeting was robust. Real estate and purchasing were centralized. The HR group was strengthened so that recruiting, training and performance evaluation were professionalized. These services were made available to the smaller groups. But except where it made sense for local specialists to join those in other countries to form regional or global firms, a central tenet was that companies based on creative talent worked best when independent-minded, creative spirits are left to “breathe freely”. The flags of the great brands remained flying high over the headquarters of each tribe.

And this is the third theme. Burt Manning did a truly remarkable job turning around J. Walter Thompson. Charlotte Beers saved Ogilvy from the brink and Shelly Lazarus drove two decades of growth including award-winning work on a global mandate from IBM. Howard Paster built a public relations powerhouse from an assemblage of great names. And then there is Jeremy Bullmore, sage of Farm Street, whose insight, vision and superb understanding of marketing communications has shaped the Group’s thinking for two decades.

The financial success of WPP is remarkable. But what impresses me most is the reputation of its leaders. When I am outside Harvard, I am mostly in the world of the Group’s clients. There it is clear that these individuals and their colleagues have earned the respect of business leaders who think of them as highly professional and creative advisors. WPP


Joseph L. Bower is Baker Foundation Professor of Business Administration at Harvard Business School

Landor.com: Blog: Weighing in on brand value and the BrandZ Top 100 for 2010

Which of the world’s great brands grew the most in value over the past five years? No one should be too surprised to learn that this honor was earned by BlackBerry, according to Millward Brown Optimor’s ranking in the BrandZ Top 100 most valuable global brands 2010. In this, the fifth year running that Millward Brown has produced its global survey ranking the world’s leading brands according to their financial value, it is particularly interesting to note some of the macro trends that its researchers and statisticians have observed. To learn about it first hand, visit BrandZ's website for the full report, and/or read the story in the April 28 edition of the Financial Times.

For starters, Millward Brown contends that consideration of brand in the purchase decision has increased by 20 percentage points since 2005—despite global economic turmoil and the perceived “flight to price” that many marketing experts have been preaching over the past two years. Indeed, brand values increased overall from 2008 to 2009, according to the study, during arguably the darkest days of the recession. Much of this growth in value, of course, is attributable to strong showings by emerging brands from the BRIC and their neighboring countries, demonstrating the symbiotic effect of growth economies and the ascendant brands that serve them. Indeed, when the BrandZ Top 100 was introduced in 2006, there was just one BRIC brand on the list; today there are 13 brands from emerging markets, including the addition of the first Indian brand (ICICI Bank).

Of course, this is just one global brand ranking list among several so it begs the question: what does the BrandZ survey have that the others (most notably BusinessWeek’s) do not? The Millward people cite a list of distinctions in their report, naturally, but (to me) the most important difference is that the BrandZ study uses broad-based consumer data, accumulated in large quantities (they claim over 1.5 million people queried since the inception of BrandZ 12 years ago) and tracked consistently over time. With the exception of Landor’s own Breakaway Brands survey, BrandZ's Top 100 list is the only financial brand valuation survey that uses quantitative consumer perceptions as part of its model. In other words, no mysterious “black box” analyses based on judgment calls and assumptions—just the facts, ma’am.

Needless to add, it’s always nice to see how our Landor client brands fare in all the rankings, but especially this one. And a good number of them have performed exceptionally well, starting with the aforementioned BlackBerry. But others can be equally proud: Verizon is No. 7 on the list of Top 20 risers and No. 3 among the world’s mobile operators (behind China Mobile and Vodaphone, a partner firm). BP leads the oil and gas company brands, and Bradesco is the third most valuable overall brand in Latin America, and the most valuable among all LatAm banks.

There’s much more to the study than what I've discussed here, including key sector analysis by WPP experts, and valuation rankings by geographies—but you will have to see for yourself. It's time well spent for any marketer interested in understanding today’s global brandscape and its implications for the future. Landor.com: Blog