A MediaPost op-ed by Luciana Gomez ignited a conversation within the Hispanic marketing industry regarding the relevance of Hispanic ad agencies. Gomez’s piece opined that Hispanic agencies are experiencing stunted growth for a number of reasons. They are underpaying talent, have low client budgets, they need to work within pre-existing “general market” campaign structures, have an over-emphasis on Spanish TV, and stale insights. These agencies only have control of three of these issues.
This article prompted a number of responses, including one from Lee Vann positing that Hispanic agencies aren’t fading, and that many are succeeding. It’s good for the industry to have these conversations and not stick its head in the sand.
I agree with Gomez’s premise that Hispanic agencies are fading. I wrote in December, the Hispanic ad agency business is at best mature with few prospects for growth. I wouldn’t, in good conscious, advise anyone to start a Hispanic ad agency in 2016. Contrary to Vann’s position, the only Hispanic agencies doing well are the top seven specialist Hispanic agencies I referred to in my article, many of which are being fed Hispanic work by their large general market sister / parent networks (example Casanova becoming Casanova/McCann). The large, independent Hispanic ad agency is a thing of the past.
While I agree with Gomez and disagree with Vann, I think everyone is missing the bigger picture of what’s going on within the broader Hispanic marketing industry. They are focusing on stagnating Hispanic ad agency business and missing the bigger, structural shift.
Hispanic marketing is moving out of the silos and Hispanic insights, market knowledge and strategies are being mainstreamed.
This is a seismic shift that is happening for two fundamental reasons:
1. The Hispanic market has gotten too big and lucrative to be a niche opportunity.
2. The Hispanic population is assimilating and creating a new mainstream, something that has happened numerous times in our past when there have been large migrations into this country.
This means that the specialized Hispanic ad agency business model that blossomed in the 1980s through early 2000s is no longer relevant to these new market conditions. It doesn’t represent the reality of the Hispanic experience in the U.S. in 2016. Marketers realizing this – much faster than ad agencies – have started to embrace new cultural marketing models like “total market” during the last four years.
The question remains: What new business model will replace the obsolete Hispanic ad agency? I don’t know for sure, but I see a transition occurring within both the ad agency and marketing function of brands:
Hispanic advertising capabilities will be integrated into mainstream ad agency functions to create a new kind of general market agency
New models for culture marketing will emerge embracing cultural realities and cross over
An evolution of total market placing proper emphasis and focus on Hispanic consumers – understanding and leveraging how they are changing and influencing a new mainstream and placing more acculturated Hispanics into the proper perspective
More focus on culturally relevant content creation over Spanish-language targeted media buys
I believe new agency and marketing models are inevitable. The Hispanic ad agency and Hispanic marketing as we’ve known it have had a great run of more than 30 years.
What’s interesting is how Hispanic market knowledge and strategies are being mainstreamed, but US Hispanic advertising professionals are not. They’re simply not being hired in any great numbers anywhere.
Two issues are at play.
First, the US Hispanic agencies opened the floodgates and invited in hundreds of foreign Hispanic agency workers from abroad through the years. So now there’s a huge number of overseas Hispanic ad workers on HB-1 and 0-1 visas that pushed American-raised Hispanics out of the industry, when there weren’t that many to begin with. Who’s going to hire a local Hispanic college grad when you can get a fully trained Creative Director from Madrid?
Second, because the US Hispanic ad agencies sold the idea to their clients that Spanish language, not US Hispanic culture, was key to the market (hence why they hired boatloads of people from abroad), mainstream ad agencies quickly learned that they could snatch up a translator here or a bilingual art director there, one or two workers max per agency, and translate their existing General Market work for US Hispanic consumers. Why would a client go to the trouble of hiring a Hispanic ad agency when their existing General Market Agency of Record will toss in translations as part of their existing service, under the "Total Market" umbrella?
So Hispanic advertising capabilities may now be integrated into mainstream ad agencies, but US Hispanic people, in terms of being hired in any serious numbers, are not.
I have always agreed that the vision of "Hispanic" is to narrow, and with Facebook DPA (target people not audieces) and very geo-centric approaches in Mobile (Tune and other vendors) it narrows Hispanic to the end execution of the the creative, but prizes the bigger view of market and growth. I think many agencies missed the boat - I recall being in one meeting at an agency I was with where I was told by managment "los gringos no entienden el mercado" which may have been the only spanish ever used in that US Hispanic shop, but it conveyed the sentiment that language was the only and main characteristic, and as we have seen, content and context make for better results.