Navigating the “New” Latin America

By: Ryan Saale

Throughout the 20th century, many Latin American countries experienced external pressures and internal struggles that left states in the region lagging in the global marketplace. In recent times, however, many of these markets have capitalized on their strengths and are gaining footholds in the international economy, recreating themselves as emerging markets full of new potential. This shift in economics toward stronger, more sophisticated markets is creating the need for qualified communications professionals to manage complex campaigns in the region during global mergers, acquisitions, investment strategies and market penetration.

Underscoring this trend, in 2008 Latin America and the Caribbean will complete six consecutive years of growth, with Gross Domestic Product rising 4.7 percent in 2008, down slightly from its all-time peak of 5.7 percent in 2007. Many countries in the region are capitalizing on this impressive economic growth by expanding free trade agreements with global powerhouses, namely India and China, and are garnering favorable attention from foreign investors after earning investment grade status.

This "New" Latin America is full of opportunities. With qualified communicators who understand these ever-expanding markets leading campaigns, the potential for success is limitless. So what are some of the key basics to consider when undertaking campaigns and operations in Latin America?

Common Identities, Uncommon Differences

First, Latin America is not one country. The states of Latin America overwhelmingly share commonalities that aid in forming a homogenized perception of the region, principally Latin-based languages and to some extent shared histories. However, when communications professionals are charged with campaigns in Latin America, they must comprehend that each market is a separate state with cultures and histories unique to its territory. To build truly successful pan-regional campaigns, communicators must recognize these unique differences within the continent and understand each market individually – not globally – to ensure fundamentally sound strategic campaigns.

Take, for example, Chile and Argentina. Although these countries share a vast common border, these markets could not be more different politically, economically and culturally, and their differences often spill over into the private sector, creating communications challenges for multinational corporations. This means a communications program created for Argentina most likely would not be as effective elsewhere in the region.

It is also important to understand that Latin Americans are, in general, very active politically – to the point of extreme nationalism. So, telling your story in Peru with a Mexican market perspective is a communications nightmare waiting to happen. Successful campaigns will start with investing in solid market research and a team of quality, bilingual communicators.

Political Landscape

Nearly every country in Latin America has experienced fierce political battles for control – from dictators to military regimes – going back to the days of the conquest and separation from Spain. This history of instability in Latin American politics has left a strong lack of confidence in political systems among the populous and marketplaces of these countries. For communications professionals, a basic understanding of local politics and the historical precedents is vital to regional operations and key to succeeding in the local business environment.

Politically, the continent continues to undergo striking changes. Since 2006, Latin American countries have seen more than a dozen presidential elections, including two in which women won presidential mandates; when compounded, this has created a strong leftist Latin America. Governments in the regions are pushing widespread social agendas along with public demand for more social inclusion, reduced poverty and the creation of a stronger middle class.

All this comes at a cost – change. With constantly evolving political systems and corporate environments, foreign companies and communicators operating in the region must stay up-to-date to remain competitive, diminish risks and capitalize on opportunities. This often means having a team of communicators based in the region, which comes at a cost and risk of losing some central control, but this nimbleness and connectivity to the local market far outweighs these risks. Tailoring country-by-country messages to integrate local market insight, corporate values and strategic messages from headquarters will enable local operations to better connect their core messages with each marketplace.

Middle Class and Media

The middle class is booming in Latin America, bringing new wealth and a more educated citizenry. According to the World Bank, the number of people in the region living on less than $2 a day declined from 114.2 million in 1999 to 98.7 million in 2005, a more than 4 percent drop.

Along with this impressive growth comes increased media usage. According to The Economist, newspaper readership is actually thriving in many developing Latin American countries with newspaper sales increasing as much as 12 percent (Brazil). This trend, as stated in the article, can be attributed to increased literacy rates as more people are entering the workforce and taking more of a stake in society. For communications professionals, these impressive numbers pose a greater need for reputation management to effectively tap into and monitor regional media.

New media usage is also on the rise, creating new forums for expression within the region and increasing susceptibility for damaged corporate reputations. Markets are becoming increasingly more sophisticated and better connected with advanced technological infrastructure, including: mobile devices, Internet usage, broadband availability, and increased usage of new media forums (blogs) and e-commerce.

Highlighting this trend is the dramatic increase of online social network usage in the region. The audience from the main social networks (Bebo, Facebook, Friendster, hi5, MySpace, orkut and Sonico) is approximately 29.6 million in five Latin American countries (Brazil, Argentina, Chile, Columbia and Mexico), reaching 64 percent of the total Internet user population, which means that six of every 10 Internet users in the aforementioned countries are using one of the mentioned social networks.

New World, New Opportunities

Latin America is full of new business opportunities for foreign companies. For these organizations to be successful, they must be able to navigate the nuances of these nations, including their unique media landscapes. Qualified, effective communicators in the region increasingly will be in demand and challenged to design strategic campaigns that build relationships with key stakeholders. Those looking to bring their businesses to Latin America will be well-served by communications counsel that understands the history, politics and culture of each nation.