By D.J. Edgerton, CEO of Zemoga
While the digital revolution has given birth to exciting new forms of media that help brands reach their desired audiences, it has also exposed just how much some traditional U.S. ad agencies have failed to keep pace.
Technology is driven by innovation -- and innovative talent is no longer found in just the U.S. This fact has put traditional agency models under tremendous competitive pressure from shops and talent found in international markets once considered "emerging," but which now have filled their ranks with digital leaders.
One place to find the forward-thinking innovation that American brands demand is Latin America (LatAm). A new breed of digital talent has replaced barriers and stereotypes of what LatAm offers (think cut flowers and coffee).
In fact, U.S. agencies must adopt a new model of collaboration to avoid being washed over by the digital El Niño swelling just south of its borders.
There's good reason for the changes. Online ad expenditures in Latin America grew 13.3 percent in 2009, per a recent Service Management Group report, and is expected to grow to 11 percent of the total spend by 2014. This is proof positive that an active audience and workforce have emerged and adopted new technologies beyond just the urban centers
Over the past decade, more than a few U.S. Fortune 100 companies have awakened to the digital innovation and creative talent coming out of countries like Colombia, Argentina, Brazil and Costa Rica. American powerhouse brands like Sears, Nickelodeon, HBO, Rodale, Pfizer and Toyota have all discovered the wealth of forward-thinking, strategy-driven digital products and services coming out of South America -- as well as other regions around the world -- as our global economy becomes increasingly borderless. Recently, for instance, Doritos went to Cubocc, São Paulo, to create WWW.DORITOS.COM.BR/SWEETCHILI, a microsite of the Doritos Brazilian Web site, to help introduce its new Sweet Chili.
These companies know that improved national security and a stable government have spawned an influx of international investment in the region, which, in turn, has further empowered world-class universities that produce highly skilled and strategically minded individuals who are well-versed in the power and impact of social, Web and mobile platforms.
At the same time, Hispanic cultures have developed a deep understanding and appreciation of what I like to call "the American consumer aesthetic." Quite simply: They get it. Savvy individuals are increasingly thinking, behaving, transacting and engaging just like their American counterparts. Case in point: Who would have thought there would be a Hooters and a half-dozen Dunkin' Donuts locations in Bogotá, Colombia? And it's no coincidence that a Colombian TV show, Ugly Betty, was hugely successful in the U.S. Both are poignant indicators of the cultural cross-influence.
Meanwhile, the concept of "nearshore" digital outsourcing in the U.S. has evolved beyond the low-cost production commodity play of HTML and Java coding, where commonalities in language, culture and sensibilities are irrelevant. In many countries, cultural nuances, language barriers and even time zone challenges are inconsequential or easily overcome -- an advantage that is not going unnoticed among progressive brand marketers looking to leverage bountiful, borderless talent that is a result of huge growth in online penetration.
Traditional U.S. agencies must adopt a new paradigm and cast off the stoic we-can-do-it-all model by tapping into collaborative resources around the globe, not just around the block. By openly collaborating with experts and service providers that best suit their clients' needs -- regardless of geography -- progressive, agile U.S. agencies can, and should, leverage worldwide digital innovation expertise to complement in-house capacity and deliver the results their clients expect.
To remain relevant and competitive, the modern agency must understand the need for this multi-dimensional approach, and to actively build open, collaborative partnerships. This "new normal" will require, first and foremost, trust (remember that concept?). It will also require a willingness to share not just the bounty that it's sure to produce, but the consequences of the lessons learned.
The agencies that collaborate with talent in other regions will wield a diverse set of resources and management prowess that will enable them to oversee a multimedia, integrated approach, and provide more efficient delivery models. Those that refuse might drown in the LatAm tide.