Commentary
2011: The Year Of Creative Destruction
- by Jose Villa , Columnist, January 6, 2011
I think 2011 will result in even more changes than I boldly forecast last year. I think by the time 2012 rolls around, we're barely going to recognize the Hispanic marketing space that has seem tremendous growth -- more people, more media companies, and more agencies -- but changed very little since 2000. Here are my revised, emboldened predictions for Hispanic marketing in 2011:
Prediction #1 The death of the Hispanic advertising agency
2010 was definitely the year of the full-on assault on Hispanic advertising agencies -- starting with the Home Depot controversy in April, Crispin Porter's absorption of Burger King Hispanic in August, and the Association of National Advertisers conference controversy in September. 2011 will no doubt see a continued push by general market agencies into the Hispanic market. Not only will they continue this push by staffing up on Hispanic advertising talent, but also through acquisitions.
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I have firsthand knowledge of at least a few such acquisition plans from some big ad agency players. Moreover, advertisers, particularly those in "minority-majority" markets such as Southern California, will begin to follow El Pollo Loco's lead and consolidate their Hispanic and General Market advertising accounts. Factor in the fact that Hispanic ad agencies have been painfully slow in building digital capabilities -- they've made a valiant "too little, too late" effort during the last 12-18 months -- and the writing is in on the wall: the start of a slow death for the Hispanic advertising agency model as we now know it.
Prediction #2 Hispanic PR officially becomes Hispanic Social Media
2010 was also the year that Hispanic PR agencies took the plunge and fully embraced social media as the future of their industry. The success of the inaugural Hispanic PR & Social Media Conference and the LATISM Latino2 tour highlighted the coming of age of Hispanic social media. Hispanic bloggers and social media influencers have established themselves as the key centers of influence in the Hispanic community. This was coupled with the continued change in Spanish print media, which has started to feel the decline in readership resulting from consumer's shift online and the recession.
Looking ahead at 2011, I see a continued decline in Hispanic print coupled with an equally sharp rise in niche and "long-tail" Hispanic publishers -- whether they are bloggers, Facebook influencers, or small Websites -- with what were formerly "Hispanic PR" agencies and professionals positioning themselves as the expert guides of this growing and increasingly prominent Hispanic social media space.
Prediction #3 -- Digital leapfrogs "Hispanic"
During the boom years of Hispanic digital (2005-2008), the Hispanic digital media market looked a lot like the Hispanic traditional media landscape -- a handful of prominent Spanish-language portals / mega-publishers that owned the market -- Batanga.com, Univision.com, Terra.com, and Starmedia.com -- surrounded by a lots of small upstart ad networks -- Gorilla Nation, HispanoClick, Consorte Media -- and a couple of key general market publisher extensions into the Hispanic market -- ESPNDeportes.com, CNNEspanol.com, etc. -- that got the scraps.
During the last 12-18 months, the Hispanic digital media market has fragmented, led by the technology such as behavioral targeting, demand side platforms (DSPs) and ad networks with immense scale and reach. While the Univision.com's and Terra.com's of the Hispanic digital media market will not be going away anytime soon, their days as "market makers" are numbered.
Looking ahead, as Hispanic digital media consumption becomes more social (Facebook) and personal (mobile), and mirrored Spanish Websites /microsites become a relic of the past -- recent research and Best Buy's well chronicled experience shows that Hispanic consumers have come to view Spanish sites as inherently inferior to "main" English language sites -- the Hispanic digital marketing space will be unlike anything veteran Hispanic marketers have grown accustomed to seeing in their analog Hispanic world.
Prediction #4 The multicultural mainstream becomes a reality
Multicultural consumers already make up 35% of the entire U.S. population. Guess what will happen to that%age when the 2010 Census numbers come out this spring? Welcome to the new multicultural mainstream -- a new America where close to 40% of the overall population is multicultural: Hispanic, Black, Asian and multi-racial. DMAs like Los Angeles, Dallas, Houston, Miami, Atlanta, and Washington, D.C., are already "minority majority" markets -- Hispanics, Blacks and Asians make up more than 50% of the total population.
Expect new cities like New York and Chicago to join the list. This will only put more pressure on advertisers, particularly regional ones, to reassess how they allocate marketing resources to ethnic groups like Hispanics. My theory is more of the "El Pollo Loco" phenomenon from Prediction #1 as advertisers consolidate their Hispanic and other multicultural marketing efforts with their general market ad agencies.
Prediction #5 The birth of the Hispanic Youth Market
The last two years have seen a steady increase in dialogue among marketers about the Hispanic youth market (Hispanics under the age of 24). The statistics are already mind-boggling:
- In 13 years, 50% of Americans under 18 will be minorities (Source: U.S. Census Bureau)
- 80% are U.S.-born (Source: University of California, San Francisco)
I predict that the 2010 Census figures regarding Hispanic Youth will be the most unexpected -- and growing! Yet the Hispanic youth market represents a conundrum for Hispanic marketers -- a growing market that increasingly identifies and shows pride in its Hispanic heritage but consumes very little Spanish-language media and sees the world through color-blind lenses. This will be the toughest nut to crack for marketers and advertising professionals of all stripes -- general market, Hispanic, digital, direct response, social media and everything in between. Yet I see Hispanic youth as the biggest marketing opportunity to come out of 2011.
Think of 2011 as the year of creative destruction in Hispanic marketing -- some things will die, a lot will change, and brand new opportunities will sprout from the ashes.
Thank you for the article, Jose. Bold predictions for 2011! I would only add one trend that I see and that is transcending from a full-service monolithic agency concept to the so called best-of-breed approach.
Like this article http://budurl.com/3m8e explains, utilizing a 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, learning curves and brokered communications are reduced. Participating in a partnership program with partnering agencies can make a lot of sense in this new era.
Happy 2011!
Bold. I like it. Don't agree with all of it, but great job.
I would put # 5 as one most people are NOT thinking of which will have the most impact. Couldn't agree with you more....Selena Gomez; Moises Arias; Ryan Ochoa; Jake T. Austin; Victoria Justice...if you don't know who these Latinos are, more than likely your children and/or nieces-nephews do. All are Latino, all are on television, most Latino youth watch on a daily/weekly basis....and...none of them are on Spanish language television. Apart from the fact that most young Latinos are watching them, is the more important fact that most (fill in any race here) children are watching them-and they DON'T care whether they're Latino or not.
Thanks again; look forward to more bold posts during the upcoming year.
¡Feliz Año Nuevo, Jose!
This is very interesting and I was aware of the trend mostly through professional friends like Sandra Regalado. As someone who has always hired in-segment agencies, I am not an advocate of the old Y&R Whole Egg theory. It dilutes the end product. Even if you hire in-segment professionals, they tend to revert to big agency behavior, thus, focussed on form over substance. That's been my experience at Coke, GE, MasterCard and WaMu. Sad to see the trend, and I take it as a sign that General Market Agencies are desparate for revenue and telling clients they will get a break on fees and selling them on some phoney integration story. It will dilute the message and five years from now, the trend will reverse itself. ~ CM
Thanks for the comments everyone.
A couple of clarifications.
#1 I don't want Hispanic agencies to die. I just see a trend that doesn't bode well for the sustainment and growth of that industry niche.
#2 I don't think Hispanic agencies will die off or disappear. I just see them contracting as an industry, with their heyday (in terms of shear number of agencies) peaking back in 2008.
A big motivator for writing these type of article is to send out a "wake up" call to my colleagues. We need to re-assess everything about the Hispanic market and how we are positioning ourselves to clients. The status quo and hoping for the "good 'ole days" is not going to cut it.
Jose,
Thank you for your article. These are interesting predictions, but I have to disagree. Here are the trends we're seeing, especially in light of the current (and continued) sliding economy:
- more boutique agencies specializing in niche services or markets are surfacing, due to the downsizing of larger agencies with price points that are out of reach for many of today's budgets. We've seen this from New York to Los Angeles and everywhere in between.
- increased collaboration among those niche firms and freelance talent. The pool is rich for top-notch talent who are tired of being let go in agency settings when their accounts are lost. They can do a stellar job for any boutique firm or large agency for that matter, with more freedom, from the comfort of their own home and pay their own taxes.
- PR, by definition, already means social media. If you haven't moved into that field, you are long gone.
We've seen these trends occurring throughout the marketplace with great success. It's an exciting time, but large agencies with price points that are out of touch with today's streamlined budgets are what I would consider the "dinosaur."
Happy New Year!
Good insights, as always, Jose. I couldn't agree with you more that we will see more of a push by GM agencies into the Hispanic market. Frankly, they have no choice as their budget allocations have decreased by Hispanic shops winning business. If nothing else, this will be a defensive/survival move, whether they think they can be effective or not.
I do think the prediction is a bit too bold and don't think 2011 will be the death of the Hispanic shop. Here are a few reasons.
First, not every brand in 2011 is ready to go the Home Depot, Burger King or Pollo Loco route just yet. Many are having great success with working with a specialized Hispanic shop and won't try to fix what's not broke.
Second, in 2011 there are way too many large GM agency that still don't "get it" and thus have clients that are still neglecting the Hispanic market. They will "get it" soon enough and when they do, they will likely first seek a specialized shop before trusting their GM shop to take them to the Hispanic promise land.
Third, there continues to be a large growth of Hispanics in secondary and non-minority majority markets. Regional companies that conduct business in these areas will need specialized shops that not only know how to market effectively to Hispanics, but also shops that know their market and have the connections with the media and community organizations that will bring their brand before the Hispanics in their market. For example, most of the local Spanish-language media outlets don't subscribe to ratings companies and thus are largely non-existent to national media buyers, but are important and influential to the consumers they reach.
Fourth, as many GM agencies continue to invest heavily in social media, and the uncertaintly of the economy, they may not have the capital in 2011 to acquire a Hispanic shop.
But, judgement day is coming for the reasons you state (certainly #4) and Hispanic shops need to step up their game. Adapt or die has always been and always will be the mantra for successful business and it's great to see bold articles like this that pulls many people's heads out of the sand. twitter.com/wilo37, http://latino-lingo.blogspot.com/
Excellent analysis Jose. I agree 200% with 4 of your predictions. Maybe too drastic on the first one. There's a lot of room out there for growth if the Hispanic Advertising Agencies would go back to their roots. However, I'm a developer and you must know about these things way more than I do.
Thank you for considering the LATISM CA conference LATINO2 as the defining moment for "Hispanic PR to officially become Hispanic Social Media" and you were too humble to mention that Sensis Agency was awarded as the Best CA Advertising Agency Using Social Media to Reach Latinos.
Keep up the good work!
So apparently this blog post has elicited quite a response from some in the Hispanic ad industry.
Notably, Gene Bryan from HispanicAd.com posted a response on his company's blog disputing my predictions as off-base and "toxic":
http://www.hispanicad.com/blog/?p=271
Also, there are some interesting comments on my own blog regarding the post:
http://ht.ly/3AIyz
Would love to hear more opinions on this obviously heated topic!
Jose,
Great article. Don't necessarily agree with everything, but "bold" indeed. Lots of people fear change and anything challenging the status quo unfortunately often generates defensive responses. But I applaud your effort for elevating the discussion beyond the same old topics. Keep up the good work and best of luck in 2011.
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