Argentina: Overview

Lift off..Argentina raises its game

It's got some of the best filming locations on earth, and low costs to match, but economic instability, a heavy-fisted government attack on its media, and a Neanderthal approach to rewarding ideas has kept Argentina back from the front rank – but is that going to change asks Valentina Vescovi?

It’s not easy to present to foreign observers a clear picture of the state of the Argentine advertising industry. The country is marked by eternal financial instability, so making plans is generally useless and forecasts always depend on too many circumstantial factors. Cooperative thinking hardly ever works, because players in this industry tend to think of their own immediate interests instead of long-term common benefits. That’s probably the reason why a country that has everything to offer – exceptional creative talent, amazing shooting locations, competitive costs – is doing only OK and, in general terms, operating way below its full potential. At this point, blaming the global crisis for any obstacle Argentina might have had in the last year sounds petulant. As Carlos Pérez, president at BBDO Argentina and one of the biggest pioneers in the local industry, says: “The financial crisis was a ghost that haunted Argentina but it never became real. Latin America succeeded in untying itself from ‘the global evil’. We shouldn’t blame others. Argentina should change its history by boosting its own productivity, providing for the local market instead of having Brazil, China or any other foreign market buy things from us. We should grow up.”

Perhaps our assessment is too harsh. Truth is, if we look to last year’s results, there should be no reason for complaints. A report from CACEM (Argentine Chamber of Media Agencies) revealed that an ad spend boost half of 40 per cent (reaching $1,3b) in the first half of 2010, and for the first time in many years this growth was due to an actual sales increase, instead of inflation rates. Even taking into consideration the World Cup and the bicentennial celebrations, which meant a strong injection of money, it’s still an outstanding figure. CACEM estimates that ad spend will keep growing in the second half.

Creativity has been at its highest too, and there’s Cannes to prove it. Del Campo Nazca Saatchi & Saatchi got a Grand Prix for its Teletransporter Andes Beer campaign. Leo Burnett Argentina’s TV spots Inheritance and Blueberries for Car One, produced by ArgentinaCine, won gold and silver. And there were quite a few bronzes for other Argentine TV spots as well. ArgentinaCine was the regional star this year, reaching ninth place in the ranking, being the only Latin outfit in Cannes’ top 10.

In the first half of 2010, most production companies strengthened their relations with the international market and expanded their business – a trend that promises to prevail for the time being. And there is no doubt that Argentina is one of the best places on the planet for filming.

From a distance, markets such as South Africa put up a show every time advertisers weigh their options. Competition has got keener ever since South Africans noticed it was about time to lower their costs if they intended to outbid players like Argentina or Uruguay.

Incredibly enough, Uruguay, a triangle of land next to Argentina with a population of 3.5 million, is on its way to becoming a film production centre for the world. For the last 10 years, the country – which is so close in miles and heart from Argentina that it’s almost as though it was part of it – has been welcoming advertisers from all over the world.

In Argentina, even if the costs aren’t as low as they used to be, they still remain attractive to European and American advertisers. The country’s natural scenery is as varied as it’s beautiful – beaches, green mountains, rivers, snow and glaciers, and even dense jungles. There’s architecture for every taste: from European-style cities to futuristic buildings and squares. Not to mention the multicultural blend of peoples, ranging from native communities to Europeans, Africans and Asians.

Augusto Giménez Zapiola, owner and director of ArgentinaCine, comments: “Foreigners look to us mainly because of the skill Argentine directors have for storytelling. This goes hand in hand with our feature film industry. The world likes the way we tell our stories in our films. The fact that Juan José Campanella’s The Secret in Their Eyes won the Academy Award for Best Foreign Language Film this year matters to us, because the award went to Argentina specifically, and not Latin America as a whole.”

Alejandro Di Michele, partner and executive producer at Peluca Films, states: “The country is in an eternal crisis. We suffer a constant rocking back and forth, but the last year has been great, even though budgets have been a little tighter because of the crisis. We’ve got talent, a big asset on a small market like ours. Nonetheless, we still can’t think as an industry. In Argentina, it’s every man for himself.”

Sebastián Soneira, one of the leaders at Fight by Flehner, another renowned production company in Argentina, is a even more optimistic. “The industry is facing great times, basically because of three reasons: first, creative talent has led to the globalisation of our creativity, giving us international prestige. Second, because since the beginning of 2000, services from all over the world have started coming into the country. This helped us create highly qualified bilingual teams, trained to work with international directors, which led us to new sources of work. Third, the currency conversion has favoured people wanting to come and work with us.”

Agencies, on their side, all agree that one of the weakest points of the industry is that, in a country with talent as its greatest asset, ideas are not appreciated at all. Creativity is poorly remunerated and it’s only been recently that local agencies have come up with the rule that pitches should be remunerated by marketers.

Darío Straschnoy, president at Young & Rubicam, states: “Argentine creativity has turned into a big player on the worldwide scene. Our style is cosmopolitan, as we are as a society. The spots that come out of our country have made history at a worldwide level, not only because they have a local tone but also because they include ingredients that touch people all over the globe. We get people involved by relating to the core of their emotions”. On the pay issue, he comments: “When an advertiser hires an agency, he is paying for dedication by the hour and the necessary structure to provide a service. That relationship should always be respected, beyond any remuneration option”.

Gastón Bigio, executive creative director for Ogilvy Latina and chief creative director of Ogilvy Argentina, puts it this way: “Clients need to start paying for ideas and not just executions. Ideas are the engine of this industry and of brands.” BBDO Argentina’s Pérez cuts straight to the chase. “Clients need to start paying for the ideas. The question is ‘how should ideas be paid for?’. It takes a lot of courage and intelligence to face the answer to that. Sometimes we even need to lose money today in order to grow tomorrow.”

In the last year or so, Argentine agencies have been getting more involved in digital. Many of the traditional companies have even stopped having a different division for digital, and decided to put together an integrated team: same floor, no divisions. TV and newspapers continue to own almost 80 per cent of the complete ad spend cake, but internet is the fastest growing platform. Bigio elaborates: “The Argentine market continues to be traditional but it is definitely struggling to make the ‘big click’ and understand that that conventional game has got to reach its end.”

The new Argentine Media Law that created considerable consternation in the last year is another issue that deserves attention, since it threatens to alter the media landscape. It was approved but it’s still struggling against opposition and hasn’t been applied. The measure establishes a Federal Authority of Audiovisual Communication Services that will exclusively grant the necessary licenses to operate. This Authority is mostly comprised of members of the official ruling party, which has been seen as a direct attempt by the government to control the media and weaken the power of communication groups in Argentina. The law also establishes that 70 per cent of TV content must be produced locally.

Miguel Ángel Reca, president at international agency Carat Argentina, comments: “There is still uncertainty regarding the possible impact of the new media law. One of our main concerns is the reduction of the amount of advertising per hour of transmission, which could transform the relationship between supply and demand.”

Alejandro Terzi, president of Ignis Argentina, says: “The outlook related to the new media law is still a mystery, but it proposes a diversity of changes in the field of media which will inevitably modify, in one way or another, the media map in Argentina.”

The Argentine advertising industry is moving forward, but it’s doing it slowly, mainly because the efforts from different players need to find a common aim, especially when you have the government imposing measures that could end up harming the business. Hopefully, in the next few years, Argentina will change from just offering work that is talented, fresh and witty, to a more mature position that also includes strategic intelligence, jumping into the future through corporate thinking and embracing technology once and for all.