As Agencies Evolve, Where Do Hispanic Shops Fit?

by Jose Villa, May 6, 2010, 7:51 AM

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Last week, I attended the Forrester Marketing Forum. One particular discussion, led by Forrester analyst Sean Corcoran, got me thinking a lot about the future of Hispanic marketing.

Corcoran's session, "The Role of Agencies in the Adaptive Era," centered on the future of agency relationships, particularly digital agencies, in a world where people consume multiple media, trust one another more than they do marketers, connect through social media and let consumers determine what is relevant.

The session, which referred to Forrester's March 2010 "The Future of Agency Relationship" report, actually went further into an evaluation of the relevancy of today's "Big 5" agency model of traditional advertising agencies, direct marketing agencies, media planning agencies, interactive agencies and communications / PR agencies.

The takeaway: None of these five dominant agency types is appropriate for this new era that requires agencies to artfully combine branding, communications, channel planning and execution, creative, technology and analytics. Instead, a new holistic agency model, based on holistic 360-degree consumer strategies, instead of the old "push" strategies of the 20th century, must ensue.

Looking at this situation and based on Forrester's insights, I infer that two trends will follow. With so many choices (as agencies continue to compete with each other), larger marketers will move away from traditional agency of record relationships to working with multiple agencies, many of which will have stand-out capabilities either in branding, communications, channel planning, creative, technology or analytics.

These agencies will be given opportunities to work across disciplines and bring fresh thinking to the old Big 5 mindsets. Mid- to smaller-sized marketers will continue to consolidate their work with new agencies of record that will "re-bundle" media, branding, creative, technology, analytics and PR to be relevant in this adaptive era.

New specialties will be organized around industry and vertical expertise, as opposed to capabilities. The big question for Big 5 agency types will be whether to "double-down" and focus on a specialist role or re-bundle to pursue lead agency roles.

What does all this mean for Hispanic marketing agencies that are also organized around the same Big 5 model? Are there other dynamics at work, particularly vis-à-vis the relationship between traditional agencies and Hispanic agencies?

Hispanic agencies will not be immune to the effects of this dramatic realignment of the agency model and industry. However, the end results and decisions facing Hispanic shops will be different. At the top the marketer food chain, larger marketers will continue the trend we saw with Home Depot's recent decision to move its Hispanic advertising duties from a specialist shop to the company's general market agency.

As they move away from AOR commitments in the general market, these large marketers will likely give non-Hispanic agencies opportunities to develop Hispanic programs across all five disciplines. It won't be strange to see general market interactive agencies executing Hispanic programs!

Looking at mid-sized to smaller marketers, the demand for "re-bundling" will also likely include multicultural market capabilities. In a world where marketing is more pull-oriented, it's difficult to imagine marketers separating multicultural and general market programs.

The common thread in both of these market segments will be that Hispanic agencies need to expand beyond Hispanic capabilities to include other audiences as well as the general market to be relevant. While that decision won't be optional, they will also have to decide whether they going to be specialists or lead agencies in the new "rebundled" multicultural agency world.

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0 comments on "As Agencies Evolve, Where Do Hispanic Shops Fit? ".

1. Kent Kirschner from MobileBits
   

   commented on: May 6, 2010 at 12:40 p.m.

   Great post Jose and exactly why our team is so excited about the launch this week of TRAFFIQ Latino. At the end of the day it will be about the results of the work. Traditional organization gets less and less valuable without significant talent and results and so the field opens both ways: General Market can and should now become more all encompassing and traditionally multicultural can and should do likewise. There are some great opportunities out there for the nimble, smart, and visionary and the tools of the trade are so much more readily available than ever. As I always say about this industry, 'they are the best of times and they are the worst of times!'.

2. Tom Robinson
   

   commented on: May 6, 2010 at 2:42 p.m.

   I wrote a piece yesterday about a "Hispanic agency" (that is not limited to Spanish language or Latino markets) that stressed understanding of culture over channels and technology. http://www.todayscampus.com/articles/load.aspx?art=2094

3. Sebastian Aroca from Hispanic Market Advisors
   

   commented on: May 7, 2010 at 10:18 a.m.

   Great article and I agree! Transcending the concept that only a full-service monolithic agency that does everything in-house and utilizing instead the so called best-of-breed approach, partnering agencies may choose to be completely visible to each other’s clients, although with one designated project or campaign manager for strategic direction. The thinking goes: Rather than try to pretend we have this expertise, let's bring in others who really do. Together we'll be a stronger team... Bringing in expert talent from partnering agencies usually brings with it streamlined processes and efficiencies. This blog expands on that approach < http://budurl.com/nfha >
   

4. Gabriel Alvarez from LLOnline Blogera, LLC
   

   commented on: May 7, 2010 at 11:59 a.m.

   To larget extent I agree with this commentary, I believe "Latino" expertise claimed by some will eventually be done away by general agencies. As Latinos come of age, and they become more assimilated into the mainstream, and vice-versa, the mainstream is more aware about our culture, traditions and everything. General agencies will take on this segment of the population as well as any agency claiming expertise.

5. Ken Muench from Draftfcb
   

   commented on: May 8, 2010 at 6:48 p.m.

   Saludos Jose! Very insightful. I would add yet another twist: as the higher acculturation Hispanic segment grows, what is considered Hispanic and "General Market" will blur. At some point very soon, you'll end up not knowing if a campaign is targeted at Hispanics or Gen Pop. Have you seen the new Microsoft Kin work? I'm pretty sure it's a Gen market campaign executed across all disciplines. But then again, it could easily be argued that it's a Hispanic campaign too. See the campaign here: http://bit.ly/9fpVS1 (make sure to start at the first spot)

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