Where Did Direct Response Go? U.S. Hispanic direct response and retail advertising lacks industry recognition

by Jose Villa, Oct 2, 2008, 3:00 PM

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I recently attended the Association of Hispanic Advertising Agencies (AHAA) conference in Beverly Hills, Calif., and was once again pleasantly surprised by the growth and prowess of our industry (full disclosure - I run an AHAA member agency). I have been attending AHAA conferences for the past five years, and it is clear to me that the industry has advanced by leaps and bounds.

 

The AHAA Account Planning and Creative conference focuses on best practices, case studies and awards for the best in Hispanic account planning and creative work. The conference always ends with a gala celebration in the form of the Advertising Age Hispanic Creative Awards (http://adage.com/hispanicawards08/), which showcase the best creative in the Hispanic ad business during the last year.

If you've ever attended the Hispanic Creative Awards, you may or may not have noticed an interesting trend - almost all the winning creative is for branding campaigns as opposed to direct response (DR) and retail advertising. In fact, all four of the Gold- and Silver-winning TV spots and 12 of the 14 Bronze-winning TV spots were branding in nature. While the creative awards do have a direct response category, there were only two ads showcased, both print pieces.

Why does this matter? Well, I argue that most Hispanic advertising is direct response or retail in nature. Just take a look at the four biggest ad spenders in the U.S. Hispanic market by category, according to AdAge:

• Automotive ($725 million)

• Retail ($584 million)

• Telecom ($549 million)

• Food, Beverage & Candy ($285 million)

Clients in automotive (specifically regional auto dealer networks like Toyota, Ford and Honda of Southern California), retail stores (Macy's, Target, Walmart, Mervyn's), food service retail (fast food, QSRs and casual eateries), telecom (Comcast, TimeWarner and Charter), not to mention insurance services (auto, life and health), communications (Verizon, AT&T and Sprint), financial services (banks, investment products and tax prep), supermarket chains (Vons/Safeway, Ralph's and Albertsons), and pharmacies (CVS, Walgreens and Rite-Aid) all have major direct response and/or retail campaigns dedicated to the Hispanic market. Many of these advertisers have DR and retail budgets that frequently exceed the typical numbers allocated for branding campaigns within the U.S. Hispanic market.

So where are the award winners in the DR and retail categories? I think the Hispanic advertising industry is doing a disservice to its very strong value proposition by downplaying its direct response prowess and results. No one in Hispanic advertising will argue against the notion that Hispanic ad spending is far below where it should be. With a population approaching 15% of the total U.S. population but an ad spend that barely tops 3.8% of total U.S. advertising expenditure, the U.S. Hispanic advertising market has a long way to go to achieve its potential.

What's the fastest way to close that gap? Increased direct response and retail advertising.

I know creatives at most Hispanic agencies will want to shoot me for saying this, but the growth of the industry should be tied to growing DR and retail budgets. This will happen if the industry puts a greater focus on its direct response capabilities. (Never mind the fact that creatives would be better served by recognizing best practices in this often derided, but nonetheless prevalent, ad category.)

Advertisers are facing more and more pressure to show results and ROI for every dollar they spend in advertising. This is particularly the case recently as digital media and its performance capabilities have put pressure on traditional media. Sure, funny and engaging branding ads are fun to make and will draw laughs and "aahs" from our industry peers, but hard-line results will increase our budgets and grow the business further.

Don't get me wrong - I am not advocating diminishing the importance of branding to the Hispanic market. All I'm saying is we should spend an equal amount of time investing in and showcasing our industry's indisputable ability to generate business results for our clients by driving sales via direct response and retail advertising. If we do that, we'll see both our DR and branding budgets increase and really show the industry the power of the U.S. Hispanic market.

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