"It's very hard to work on a day-to-day basis when you can't make long- or even medium-range plans,he continues. "We don't even know what's going to happen three months from now."
And so, for the moment, Averbuj and the other PR execs in Argentina must try to get by with whatever resources they have at their disposal. That goes not only for their billable hours, but for their personal time as well. On a recent Friday night, Averbuj, exhausted, found himself wanting "a short holiday into Never Land.
He made do with a weekend spent swimming and going to the movies with his kids.
Someone trying to understand the status of the PR industry in the South American market could do worse than spend a day at the Buenos Aires zoo.
Even as demonstrators - notified over the internet - gather to bang their pots and pans at the latest cacerolazos staged in the Plaza de Mayo adjacent to the House of Government, the animal park has been doing bang-up business.
Seeking an escape from the turmoil, Argentines doubled the zoo's average attendance during December, providing its communications team with a PR opportunity.
A similar dynamic has emerged throughout South America's largest markets - Argentina, Brazil, and Chile - as the entire continent suffers the effects of a global recession. As in the US, big-money technology and telecom accounts have been curtailed or cut off. And with the exception of healthcare and pharmaceuticals, agencies are discovering that growth can often turn up in sectors that might surprise their counterparts to the north.
"Doing business in this region tends to be a roller-coaster ride; one market will be up, the next one down,
says Santiago Hinojosa, Burson-Marsteller's regional CEO for Latin America. "Seldom in my 20 years there has everything been firing at the same time. Right now, clients are going from retainers to project work. Fees are being negotiated downward. But I'm very up on South America. It still represents an emerging opportunity."
Rissig Licha, managing director for the Latin America practice at Fleishman-Hillard, agrees. "Contrary to what you read in the papers, there continues to be a great need for services such as ours,
But lately, the nation that could most use its own PR boost is the one where agencies' prospects are most dire. Argentina's economy, which has been shrinking for four years, went into a meltdown late last year. In November, the country's citizens withdrew more than $1 billion from their bank accounts, sparking fears that the entire financial system might crash.
The next month, the government placed caps on withdrawals from private accounts. Then it announced it was defaulting on its $141 billion public debt.
Over the span of two tumultuous weeks, workers - a record 22% of whom are now unemployed - watched four presidents resign. The new chief executive, Eduardo Duhalde, has announced an end to the dollar-to-peso peg that economists blame for dragging Argentina into its current mess. The policy, enacted in 1991, stemmed the hyperinflation that had long overheated the economy.
But it also made exports more expensive than competitors', creating a yawning trade deficit that must be overcome if Argentina is to regain its footing.
Duhalde's administration has stated that the economy will tumble an additional 5% this year. Outside analysts see a sharper fall; Goldman Sachs, for its part, predicts the contraction will be twice as large. "The general feeling is that - assuming the necessary political stability, the support of the International Monetary Fund, and a positive reaction from our financial markets, which are completely destroyed - it will take more than six months before we will recognize any sign of recovery,
says Flavia Di Giusto, director of Buenos Aires agency MP&M Communicion.
Di Giusto hopes that exports will increase in years to come, creating additional business for PR agencies representing the country's homegrown corporations. "Opportunities lie in the potential for development in those industries, which will demand the professional work of PR consultants with international influence who can reach those new markets."
Until that happens, the busiest agencies in Argentina will be those representing clients capable of benefiting from the fallout. Vivian Hirsch, president of Edelman Latin America, points out that - in addition to the zoo - movie theatres, spectator sports, and cultural institutions have hosted a crush of customers as of late. "Those are some of the areas where our business will be focused,
she says. "In times of turmoil, people turn to sports and entertainment culture for diversion."
When those people happen to be corporate executives, they will likely retain crisis support too, so it comes as little surprise that the agencies known for crisis PR are weathering the calamities well. "Our affiliate in Argentina, Nueva Weber Shandwick, continues to make a profit,
reports WSW chairman Jack Leslie. "And that has a lot to do with the fact that we do a lot of crisis, corporate, and public affairs work."
A big, complex market
For global PR networks, the upside to the Argentine crisis is that it hasn't spilled over into Brazil, the continent's largest and most complex economy. "If you look at senior-most executives around the world, the number of them who have spent time in Brazil is remarkable," says Jeff Hunt, head of GCI Read-Poland's Latin American operations. "It has become a grooming ground, because it represents such a big, complicated market."
Because so many of Brazil's 175 million citizens are mired in poverty, corporate social responsibility (CSR) is seen as key to positioning a client for the day when some of those people make the transition to Brazil's growing middle class. "There is a lot of interest in companies giving back, and they are investing in CSR work to make their companies more relevant in the future,
With that in mind, Bayer, encountering communities ravaged by a fever epidemic, attempted to educate people about the illness - then provided drugs to combat it. While Companhia Brasileira de Distribuicao, Brazil's largest supermarket chain, sponsored a children's music program. And for Hirsch, who has seen Edelman's presence in Brazil swell from eight to 100 employees over the past four years, the emphasis on CSR has meant hiring people with NGO or governmental backgrounds to implement the programs they've spent years developing on a theoretical level.
This October, Brazilians will elect a successor to President Fernando Henrique Cardoso. "There's been a hiatus of corporate activity,
says Licha, who notes that Brazil - which stopped pegging the real to the dollar in 1999 - has a long way to go before fulfilling its export potential.
"Once the campaign ends, there will be a renewed focus on establishing Brazil as the leading trade partner in the Americas."
That's not the only anticipated development that has PR practitioners feeling positive. "Sao Paolo is about to become the largest city in the world,
says Gary Bitner, whose agency, Bitner.com, is a Worldcom affiliate.
"Go there, see what's going on, talk to people. Once you do, you'll be sold."
If corporations are drawn to Brazil by the promise of what it may one day be, they come to Chile because of what it already has: political and economic stability, and a media that is arguably most like that of the US. Chile's strength as an exporter should increase once it finalizes a trade pact currently being hammered out with the US.
But the Chilean market is small, and the list of growth opportunities provided by Carlos Tironi, a principal of Tironi Asociados, which grabbed its category's top spot in the 2001 PRWeek global rankings, reveals why Chile's economic expansion, while steady, isn't likely to be judged explosive by North American standards.
In addition to healthcare, education, and retail, Tironi says his firm observes the greatest opportunities in sectors like "infrastructure, public works, and drinking water and residue treatment,
which "have recently been privatized and need to transform their image from old state-owned companies to providers of good service."
After Chile, Columbia - where the military recently severed peace talks with rebels that control much of its jungles - has the most vibrant PR industry. Communications efforts in the rest of South America are often turnkey add-ons to continent-wide campaigns. "A lot of those countries," says Houston consultancy owner Henry de la Garza, "are just not the kinds of places you want to take a client and try to grow some business. There are opportunities, but until their governments instill some stability, it's just not safe."
Business extends across borders
It is the fact that agencies can develop a baseline strategy for the entire region that represents perhaps the most significant trend in South American PR. "It has gotten to the point where it doesn't really make sense for a large multinational to try to manage its PR on a country-by-country basis,
explains Jeffrey Sharlach, who runs cross-continental campaigns from The Jeffrey Group's Miami headquarters.
Thanks to the websites, cable networks, and border-hopping periodicals that have sprung up, consumers in different South American nations are receiving their business news from common outlets. For Sharlach, that has meant that "it's impossible for our client, Kodak, to introduce a product in Chile one month and in Argentina the next, because both are going to get their information at the same time."
Recently, Sharlach's firm surveyed 140 Latin American journalists about how they most like to be pitched. Their answers are quite likely the opposite of their US contemporaries. "Email and fax were at the bottom," he recalls.
"'Call me, send over a press kit, and let's have coffee' - that's how they prefer to work with publicists."
"We in the US are used to getting things done in a few days - you rush over a contract, the money changes accounts, and you're in business," says de la Garza. "The biggest thing we have to convince businesspeople who haven't been to South America is that you have to cultivate relationships."
And that means developing PR plans with an eye to the long haul. "One thing I've learned is that South America's people are very resilient," says Sharlach. "They've lived through military governments, curfews, and currency devaluations, and they are a lot more used to instability than we are accustomed to here."
So while the market has suffered of late, those who have been active there stress that it would be unwise to cut PR efforts in South America.
"Sure, there are risks,
says de la Garza. "But there's a much bigger risk in your competitor getting in there first."
A VIEW FROM BUENOS AIRES When unrest swept over Buenos Aires late last December, Gustavo Averbuj, CEO of Ketchum Argentina, exited his apartment for a ground-level view of the noisy protest unfolding below. With him were his young daughters and nieces, visiting from Spain. "We had to tell the littlest one that it was a party,
Averbuj recalls. "She was very afraid."
Ketchum's offices were closed for the holidays, but he made sure to get in touch with his clients. "We called around to make sure everyone was OK, and that there was no damage to their businesses,
There hadn't been, at least physically. Reputations were another matter, and when Ketchum reopened for business on January 7, Averbuj had "to put out some fires on the corporate side,
he says. As the government attacked pharmaceutical companies for price gouging, a rumor spread that laboratories represented by Ketchum were yanking their medicines off pharmacy shelves in order to increase what consumers were asked to pay.
In reality, it was companies' inability to import products that created the shortage, and the de-valuation of the peso that prompted the price spike. "We had to rush to do damage control and issues management,
he says, "and, like a surgeon, keep our heads cool amidst a country in flames."
Other clients asked Averbuj to develop strategies for keeping their workforces motivated and informed. In the meantime, paying his own staff's salaries proved no easy task. "There were 15 banking days in two months,
"We couldn't pay our employees, and nobody could pay us. Just the other week, there was a line of people 14 blocks long, seeking affidavits to get their money out of their accounts.