Part II: Are We Witnessing The End Of The Hispanic Advertising Agency As We Know It?

by Juan Aceves, Mar 24, 2011, 7:13 AM

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Continuing with the topic I raised in my previous post about the state of Hispanic advertising, I recently had a conversation with Roberto Alcazar, Partner-ECD at Revolución.

Hispanic advertising is going through its best period ever. In the U.S., 15% of the population is of Hispanic heritage and ranks number five in Spanish-speaking countries. We all know the statistics regarding buying power, consumer trends, etc., but I guess we could say that Hispanic advertising has become the goose with the golden eggs.

However, Hispanic advertising agencies now face a great challenge when trying to compete with their general market counterparts. It seems like the "Latino insight" is no longer enough for agencies.

Even though advertising budgets have not changed much over the years, the way they are distributed now is leaning more towards the Hispanic segment. Given this, mainstream agencies have realized that a market they didn't pay much attention to in the past has now become a crucial element for advertising. Hispanic agencies' existence was justified based on their cultural insight and their unique perspective, and they were allowed to exit freely because they didn't represent much in terms of overall advertising budget.

Now that advertisers are diverging more of their resources towards the alternative markets, Hispanic included, the general market agencies are taking action. By creating specialized teams that can deal with the specific needs of these markets within their infrastructure, they can consolidate accounts, which is very attractive to their clients because they have to deal with just one agency, plus they can benefit from the "added value" when buying media in massive quantities.

The media doesn't care where their business comes from. Fifty percent of Univision's, and more than 50% of Telemundo's revenue comes from general market agencies. So, the media is thrilled with the account consolidation that general market agencies are offering because advertisers who never invested in the Hispanic market are now doing so.

An argument that seems to support the rationale behind consolidation is the bicultural/bilingual Latino: a growing number of Hispanics that are comfortable in both worlds, speaking English during the day at work or school and Spanish when they get home.

Hispanic agencies have been navigating and dealing with bicultural and bilingual Latinos for many years now and, in theory, should know when to be culturally relevant, when to be geographically focused and when to be language driven. This is something that general market agencies don't have; they represent a more effective business model, not necessarily a more relevant one.

Thus, when trying to reach Hispanic consumers, programming, content and advertising that are geographically and culturally relevant are always going to be more effective than the language they are delivered in. The Hispanic agencies that possess this ability to traverse these two markets and, more importantly, sell that concept to the client, will have a clear advantage and may do a reverse cross over into one general market. I see more and more of them everywhere.

So, we may not be witnessing the end of the Hispanic advertising agency, but we may see less and less of the Hispanic agency as we know it.

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0 comments on "Part II: Are We Witnessing The End Of The Hispanic Advertising Agency As We Know It? ".

1. David Nickelson from DDN & Asssoc
   

   commented on: March 24, 2011 at 10:46 a.m.

   Is there such a thing as an agency "melting pot..."?

2. A.j. Cuervo from Comdesol, LLC
   

   commented on: March 24, 2011 at 10:47 a.m.

   Excellent post, Juan. Thank you. What I like the best is that you present not only for what has been happening with the Hispanic market, but also a forward thinking view to the whole bicultural phenomenon. We are witnessing transformational times, indeed!

3. Alfonzo Chavez from Compete Sports Media
   

   commented on: March 24, 2011 at 11:56 a.m.

   This is a very good information to have. Being someone who is part of 2-3 communities targeted by advertisers it makes me curious to find out if the gay market will be the next one to be taken up by mainstream advertising agencies.

4. Alfredo Pedroso from Batido
   

   commented on: March 24, 2011 at 5:46 p.m.

   Yes, we are.

   But you shouldn't be worried unless you're a partner or owner of a Hispanic agency.

   If you have talent, who cares if Hispanic agencies whither? What's more important, the work or the institution it came from?

5. Manuel Wernicky
   

   commented on: March 25, 2011 at 11:36 a.m.

   Good question David, but the answer is No. "Melting pot" assumes that we all blend, assimilate and become one unit of the same homogeneous thing. Instead we are a "Salad bowl" with many different ingredients and flavors, each with our own respective mindsets, attitudes, and behaviors joined together to make the whole experience that much more dynamic and interesting to enjoy.

6. Manuel Wernicky
   

   commented on: March 25, 2011 at 11:37 a.m.

   Good question David, but the answer is No. "Melting pot" assumes that we all blend, assimilate and become one unit of the same homogeneous thing. Instead we are a "Salad bowl" with many different ingredients and flavors, each with our own respective mindsets, attitudes, and behaviors joined together to make the whole experience that much more dynamic and interesting to enjoy.

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