You were incorporated in 1971 and you are today among the first leaders in the Venezuelan market as well as in the international level. For our readers, can you describe your philosophy and what it has enabled you to achieve all of this?
Our philosophy is held within a very complicated and very competitive business. Obviously as an advertising agency being creative is essential, but also getting to be good business partners with our clients. That means giving them a full service in any area that they might need in comunications, and doing that in the most transparent way. There is no under the table, or family business going on. Corruption in our country is a major issue, and I think one of the reasons that we have been successful over the past twenty-nine years is because we are seen as a serious, but at the same time very creative agency. The other factor is that this is a people business, we have tried to retain the most talented people available in the country, today just about anyone in a key position in this company is a University graduates, many with twenty or more years of experience. Leading a team of creative minds that average around the age of twenty-five and twenty-six. This way the creative bubbles come from underneath and the guidance arrives from the experience. Part of our belief has always been that one must be creative in order to sell. When you look at track history we have helped produce some of the biggest brands in the country, like Belmont cigarettes or helped maintain major Venezuelan Brands leaders in the market like Cacique Rum and the Polar Beer. We have also done very successful launches for the Procter & Gamble in Venezuela. Yes, creativity is what sells, and people are key in a service providing business.
In order to complete this presentation, can you tell us what is your Capital structures your marketshare on the national market, you're positioning regarding your competitors?
I don not know whether we are number three, four, or ten. For the last fifteen to twenty years we have been among the top ten agencies of the country. Today we are probably number four or five in the country, we had a turn over of approximately thirty-seven to thirty-eight million dollars a year, and we employ about ninety-seven people. We are a completely integrated company, we offer everything from direct marketing to database services, marketing database services, traditional advertising, and specialized media services, and Internet. We provide all of this through different specialized companies that we have created. A service industry really does not rely on capital, thirty-seven and a half percent of our advertising in owned by Grey Worldwide Advertising. I believe is sixth or seventh worldwide, and is the leading international company in terms of numbers of clients in Latin America. In 1988 we signed our partnership with them. It is not a capital inclined company. I am majority shareholder; fifty-one percent because I did found this company in 1971 and the door of this company still bears my name. The other eleven percent or so is owned by three key people, Jose Amejeiras who is the general manager, Felipe Huizi and he is senior vice-President in account management and the third is Luis Morasso and he is also in account management. Amejeiras has been with Fisher Grey since 1974, and the other gentlemen have been with Grey advertising for over twenty-five years.
Your main customers in Venezuela are Polar, Cacique, Mavesa, Bigott, but also at international level Mc Donald's, Procter & Gamble. How many customers do you have in your portfolio and what services are the most demanded?
We have approximately eighteen active clients, for whom we do all kinds of activities. They go from cigarettes with British American Tabacco, McDonalds to things like Globalstar, and Oracle; we handle most products for Seagram here in Venezuela, which are the producers of Cacique Rum. Then we run a large amount of business for the Procter & Gamble both in a local and regional basis. We have Novartis, who recently bought the Gerber, Quaker Company all those are key clients. Venezuela is still very young, in the communication highway. Concerning database services, Internet services, web services are the least demanded at the moment. In greatest demand is the traditional advertising above the line and below the line. We are basically talking about Television, Print advertising primarily through newspaper and magazines, a lot of outdoor billboards and some radios. Below the line we do anything from point of sales to major events, sales training, etc. We are doing database services for some of our clients and we are also designing web sites for several clients. It is something in which we are investing for the future and in the beginning of the year we launched these new companies that are considered in the non traditional below the line business for around twenty years. We officially launched all the database, and Internet web design for the businesses. These are independent companies that belong to our holding. We see ourselves as an overall communications company that offers integrated services, but the database, Internet as well as the public relations companies have to be run by individual professional on their individual Pnl Basis.
Are you looking for more partnerships, in order to expand your business?
Absolutely. We are very much in the process of identifying potential statistic arrangements or buying out companies or associating with them. We are looking in the IT area. We are also looking at other agencies to associate or buy. Looking into web design personal or companies. Those are the three key areas we are looking in to strategic alliances, purchases depends in what we find. People will play a decisive role in these alliances, they way they work, the chemistry, their vision. I think anything we start in Venezuela today has to have the potential of going regional, the investment that one eventually makes for this company and the kind of people one must hire would amount to a very high and unjustified cost just for this country alone. The other factor is that we are associated to Grey Advertising, which has the largest multinational client list in the region so it would even be foolish to think of only this country and not the remaining of Latin America, in terms of business opportunities. | You mention before that you did work at a local and regional level with the Procter & Gamble, could you explain what this consists of?
Various agencies in Latin America are known as Center of Excellence for developing create and strategic plan for different brands, we for example are in the fabric area of the Procter & Gamble of Venezuela, we are designing regional plans on the regional advertising for some of the brands in the fabric care area. In the past we have worked on products for them like soaps, Monclair was a soap we created a couple of years ago sold by the Procter & Gamble recently because of strategic reasons. We worked on detergents as well, so in the twenty odd years that we have been working with the Procter we have done quite a number of regional products, now it happens to be fabric care. We are also working with Pringles and visualizing it regionally.
Do you think the fact that you are an international company with presence in many countries has reassured new projects for new customers on an international level?
Yes, being part of an international network you are in constant communication with what is going on, you discover new business opportunities both with existing clients that might be coming into your market or you might contribute with past experience to their introduction in the market. There is also keeping them aware of what is new in the market in the country. It gives us opportunities to bid for projects, regional ones that we sometimes have to compete with numerous agencies in order to get. It broadens your dimensions; you become something bigger than just a local company. The reason we made the association with Grey thirteen years ago was because it had become clear to us that globalization was not a thing of the future, it was an immediate reality. Since our association with Grey we have seen clients turning in the same direction the entire country is turning to. They are going from being eighty- percent local clients to being eighty- percent international clients, or multinationals. Most of the large Venezuelan companies have been bought by multinational. The only strictly big local client that we have is Polar. The large Venezuelan government owned companies usually work on short-term basis with agencies. We have worked some projects with the oil industry and other areas, but it is not our top priority.
You have 409 offices spread over 90 countries. Which areas do you mainly target and what are your projects in terms of developing this network?
That is Grey Advertising. I can tell you about their intentions, they have re launched themselves about two three months ago worldwide as a fully rejuvenated company. The changes are turning around the agency from being "Grey" to being fresh and young all over again. Letting all the independent services that Grey offers worldwide like database, heath care services, advertising, public relations, and the Latin American agencies that are combining to create bigger scale companies. In a recent conference in May the leader of Grey spoke of the need to complete re engineering of the company, taking into consideration that traditional advertising is dead. We need to encourage change in our companies, people and ways of thinking. We want to be leaders in the race towards being connected in the communications world. We integrate services.
In Venezuela in the advertising market there is a fiercer competition, do you still see a growing potential in your sector that would interest foreign investment?
Venezuela is under going a very hard moment. It is probably the most difficult time this country has ever been confronted with in its brief history. There is a division now in Venezuela, where one half is poor an apparently this is the half the President is siding with, the other half is educated, with money and Privileges. Unfortunately the government is manipulating this division in order to catch votes on its behalf. A few weeks ago we had elections, Chavez has now full mandate. I think all the private sectors hopes that this diversionary dialogue will end, and that the President will lead us to a more prosperous, and stable economic future. Foreign investment in Venezuela has decreased, even more in the last few months, not helped by the uncontrolled crime rate. But then again we must bear in mind that the new government has just been elected and the must too have their chance to prove themselves. I am an optimist; I have lived in this country for over fifty years. I think we will overcome this, the people of this country are much nobler than the message the media gets across of them. They are willing to work. We need education, and stable economic policies. With all the resources this country has there is no reason why we should be able to overcome this slump quickly.
You know Forbes always tries to portray success stories and great challenges. What would be your greatest personal challenge over the coming months?
Survival. Staying alive. We have seen major cut backs from clients, we have seen no growth in investment. Sales volumes of most of our clients are down by twenty to forty percent. That is all affecting our business. It is difficult to make money today, we are projecting a minimum gain this year, and we are going to brake even or have a slight profit at best. It has been a tough year. We have seen cuts in our budgets of thirty-percent, the entire industry. Even having the portfolio we have. It is all about overcoming this period of pessimism, and hoping that the government policies will change and take Venezuela back to a leader of Latin America. Traditionally we have always been and now we are at the bottom of the list for everybody. All this mainly due to the erratic behavior with the political and economical policies we have live through the last years. We are optimistic that it will change and above that surviving until it does.
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