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Grupo ABC de Comunicao

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Grupo ABC is the largest marketing services group in Brazil, centred around DM9 DDB, which is the local arm of the DDB Worldwide network, and separate agency Africa. Both agencies are among the top ten by billings in Brazil. The driving force behind the group is creative guru Nizan Guanaes, previously the managing partner and controlling shareholder in DM9 DDB. He is now Brazil's most prominent advertising executive, and was described by the Financial Times in 2012 as one of the five most influential Brazilians in the world. Since 2002 he has assembled a sizeable collection of different marketing services businesses, run along similar lines to international groups such as Omnicom, which is also the global group with which ABC has the closest links. In Nov 2015, Omnicom announced plans to acquire Grupo ABC, and absorb all its various agencies into the DDB network.

Clients

Click here for a client listing for main Grupo ABC agencies from Adbrands Account Assignments 

Competitors

See Brazil's Leading Agencies Index for other companies

Brands & Activities

Previously known as YPY Holding, Grupo ABC adopted its current name at the end of 2007. The ABC name was inspired by the three main services provided by the companies under its umbrella: advertising, Branding and Content. 

Omnicom agreed to acquire ABC in Nov 2015. Price was not disclosed, but Brazilian trade paper Meio & Mensagem estimated a tag of R$1bn, or $270m, to be paid over five years. Co-founders Nizan Guanaes and Guga Valente are expected to remain with the business.

The most widely known agency within the business is DM9 DDB, although in this case ABC is only a minority shareholder behind Omnicom. It has global recognition as one of Brazil's top three or four agencies and is a regular on the winners' podium at the Cannes Lions and other festivals. In addition to its main office in Sao Paulo there are outposts in Brasilia, Rio de Janeiro and Porto Alegre in the far south of Brazil. Although it doesn't have the same global recognition as DM9 - it rarely enters international creative awards contests - Africa is arguably Brazil's most admired creative agency (with a level of respect equal to that of the likes of Wieden & Kennedy or BBH elsewhere). It maintains a policy of restricting its client list to a small collection of accounts to which it can devote maximum attention. However, few agencies would need to have more than 16 clients, when those clients include giants such as P&G, AB InBev's local subsidiary AmBev, mobile telecoms leader Vivo and Brazil's biggest bank Itau. The main agency in Sao Paulo handles creative marketing, while an outpost in Rio de Janeiro specialises in content, sponsorship and product placement. To broaden its coverage, the group launched separate satellite unit Africa/Zero in 2013 to cater to small clients without large budgets.

The group also houses top 30 agency Loducca. This was previously affiliated with the Lowe network until 2004, and became part of ABC in 2007. It merged with sister agency MPM in 2009. Another creative agency, Morya, actually the country's oldest agency, founded in 1956, joined ABC in 2011. Another link with Omnicom is the local office of branding agency Interbrand, also now part of Grupo ABC, run as a joint venture between the two groups. Local researcher Ibope estimated billings of almost $1.1bn for Africa in 2013. It was the highest-ranking independent at #7 and the only one among the top 13 agencies. DM9 had slipped to #12 with $979m, while Loducca was just inside the top 20 with $533m.

In 2008, ABC established its first satellite in the US, in San Francisco. Full-service creative boutique Pereira & O'Dell was launched by former AKQA executives PJ Pereira and Andrew O'Dell with backing from ABC, which took a controlling 51% shareholding. (Brazilian-born Pereira started his career under Guanaes at DM9). Although it is primarily a US agency, it also produces work for the Brazilian market. AdAge estimated revenues of $20m for 2013. However, Pereira & O'Dell reacquired ABC's shares in 2015 for an undisclosed sum, breaking their links with the group.

In 2009, ABC part-funded the launch of another San Francisco creative boutique, Dojo, a breakaway from McCann's TAG unit working mainly on technology accounts. There is also a fledgling office for Africa in New York, and representation in Washington DC through an office of CDN.

Back in Brazil, below-the-line branding services are provided by sales promotion agencies B/Ferraz and NewStyle, direct marketer Sunset, event marketer Tudo and social media specialist Rockerheads. In 2013, the group acquired majority control of corporate communications and PR agency CDN, now the third biggest business by revenues within the group after DM9 and Africa. The group also organises entertainment and sporting events through joint venture Mondo Entretenimento and wholly owned event organiser Maior. All the group's various agencies are located in one or more of Brazil's key cities of Sao Paulo, Rio de Janeiro and Brasilia.

The privately owned group doesn't declare full financials, but revenues for 2013 were around R$940m (US$440m). The group is owned by its senior management team. It sold an initial 20% holding to private equity fund Gavea Investimentos in 2007. Those shares we later reacquired as the group expanded. In 2013, to raise another round of expansion capital, it sold a new 20% holding to investment group Kinea, a unit of Banco Itau, for R$170m ($79m).

Background

DM9 originally launched in the mid 1970s in Bahia in north eastern Brazil. Founder "Duda" Mendonca named the agency after his own initials and his lucky number 9. Nizan Guanaes joined the company in 1978 as an intern after graduating from university, and quickly demonstrated considerable talent as a copywriter. In the early 1980s, he left DM9, then still a small provincial shop, and moved to Sao Paulo to join much bigger agency DPZ and later W/Brasil. Keen to establish his own business, Guanaes bought DM9 off Mendonca in 1989, and with business partner Guga Valente moved it to Sao Paulo, where it quickly earned a reputation as one of the country's hottest agencies.

In 1993, DM9 was the first Brazilian agency ever to win a Grand Prix at the Cannes Lions festival with a press campaign for local soft drink Antarctica Diet Guarana. A year later, Guanaes masterminded the successful election campaign of new Brazilian president Fernando Henrique Cardoso. In 1995, a campaign for Parmalat milk, featuring children dressed up as animals, became one of the most popular campaigns ever run in Brazil. The agency soon assembled a roster of other prestigious international clients including Honda, Texaco, DHL and Budweiser.

DM9 began extending its network beyond Brazil at around the same time, establishing a loose consortium of like-minded creative shops in other South American countries on behalf of Parmalat. Having been courted for several years by several global networks, Guanaes agreed to sign up with DDB in 1997, selling a majority stake in the rebranded DM9 DDB to Omnicom. In 1998, Guanaes took time off to manage president Cardoso's re-election campaign. Meanwhile, DM9 DDB was named Agency of the Year at the Cannes festival for two consecutive years in 1998 and 1999. Keen to dabble in other areas, Guanaes quit the business in 1999, selling his remaining shares to Omnicom. Instead he moved into the dotcom arena as chief executive of newly launched free internet provider iG (Internet Gratis). DM9 DDB, however, struggled in his absence, and was hit hard by the loss of several key staff and clients.

Following the dotcom crash, Omnicom was able to tempt Guanaes to return to DM9 in 2002, selling him back a small shareholding in the agency. He used this as the cornerstone for the creation of his own marketing services holding company. The first launch was advertising agency Africa, established in 2002 by a group of partners drawn from DM9. The following year, Guanaes resurrected famed Brazilian agency brand MPM, once the country's biggest agency, but which had closed down in 1998 after its merger with the local arm of Interpublic's Lintas network. This though was subsequently merged into Loducca, the creative agency which had previously been aligned with the Lowe network.

Also in 2002, Guanaes threw himself back into politics again to run the election campaign for a new presidential candidate, Jose Serra. This time, however, Guanaes was unsuccessful, and Serra was trounced by the socialist candidate Luis Inacio "Lula" da Silva. Ironically, da Silva's winning campaign was masterminded by Guanaes' former mentor Duda Mendonca.

Last full revision 19th May 2014

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