| Ten years ago emerging markets were seen as a | | | | - 33% managed communications directly from the |
| sideshow by multinational companies with resources | | | | corporate centre - e.g.; New York, Madrid, London- |
| focused on the developed markets of Western | | | | working with local PROs and agencies in-country to |
| Europe and North America. Ten years on and | | | | support execution; |
| emerging markets are widely viewed as the engine of | | | | - 52% devolved decision making to a regional |
| organic growth, crucial to sustaining margins. | | | | communications head for Central or South America, |
| As a recent report by the Economist Intelligence Unit | | | | reporting to central communications and a dotted-line |
| and KPMG notes, the promise of emerging market | | | | to the regional business head; |
| growth is leading to a significant shift in resources and | | | | - Only 15% devolved power down to smaller regional |
| a re-think of corporate structures. There is a | | | | clusters or single countries, with almost all of these |
| consensus that a decade of centralisation has taken | | | | treating Brazil as a stand-alone unit; |
| its toll and what is required now is localisation of | | | | - By some margin, Miami was the favoured 'hub' for |
| decision making, flatter management structures and | | | | regional communications with Buenos Aires a |
| shared resources. The challenge is getting the balance | | | | secondary hub for the Spanish speaking markets and |
| right. | | | | most having senior PRO dedicated to Brazil |
| "Local markets need to be embedded in a broader | | | | - Overall the research showed corporate |
| regional and global structure that not only keeps | | | | communications to be much more centralised than |
| administrative costs low by sharing back-office and | | | | other business functions, with few respondents |
| functional resources, but also focuses the attention of | | | | anticipating change in 2010. |
| senior management, ensures corporate compliance, | | | | Perhaps this is inevitable: multinationals recognise the |
| prioritises markets, channels resources for growth, | | | | benefits of a centrally controlled message and wish to |
| breaks down silos and builds synergies with other | | | | exploit economies of scale, with little obvious downside. |
| markets." (EUI, 2009) | | | | But if this is the case, it is perhaps surprising to see |
| Europe has seen a gradual shift away from the | | | | such a diffuse and fragmented agency landscape |
| London domination of the 'EMEA' region, with some | | | | across the region: consistency of messaging and |
| multinationals moving to a CEMEA grouping of | | | | economies of scale are also arguments for |
| emerging markets while others decentralise further to | | | | pan-regional agency support. |
| regional clusters: Central Europe, South East Europe | | | | The agency market in Latin America is more |
| and often Russia as a stand-alone. | | | | fragmented than any other region of the world: there |
| Likewise, we are starting to see a gradual move | | | | are no fully owned and integrated agencies with true |
| away from US-centric management of the 'Americas' | | | | pan-regional coverage, although many of the global |
| with many multinationals devolving power to Latin | | | | networks do have "reach" across the region through |
| American units and increasingly to clusters of Central | | | | local affiliates. The underlying reason most of the global |
| America, the Caribbean, the Andean countries and the | | | | networks have failed to build a direct presence in the |
| Southern Cone. Brazil - like Russia - is increasingly | | | | region is almost certainly down to historic levels of PR |
| treated as a stand-alone. | | | | spend in the region; less than 1% of the global industry |
| In our recent survey of fifty of the leading multinational | | | | value, according to estimates by Paul Holmes. |
| companies in Central and South America we looked at | | | | But if emerging markets are moving centre stage and |
| how companies were managing the corporate | | | | the next decade will see increasing focus and |
| communications in the region: how the region is | | | | resources on Latin America it is clear the PR agency |
| structured and managed; where the region is "hubbed" | | | | sector has a job to do in aligning itself with these new |
| and where decision-making and budgetary power lay. | | | | corporate realities. |
| Of the companies surveyed: | | | | |