• by Juan Aceves , March 24, 2011

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.