August 19, 2010

By Gene Bryan - CEO /

Based on factual occurrences over the last couple of years, where mainstream agencies have earned the right to handle Hispanic responsibilities laced with the recent losses of key accounts like Home Depot, Publix Supermarkets and Burger King to mainstream agencies or hybrids with internal multicultural executives, we have been measured and we have fallen short.

Don’t kill the messenger, understand that we have a problem.

We definitively find the US Hispanic Agency at a crossroad.

A couple of question come to mind:

Is today’s Hispanic agency (multinational/independent) designed to meet the challenges of clients marketing to US Hispanic for the next decade?

Have the Hispanic focused agencies given away their craft and skill-set by oversimplifying the art & science of marketing to US Hispanics?

Have the media that targets US Hispanic pushed traditional Hispanic agencies into the current state they are in by oversimplifying the homogeniality and single messaging approach to reaching the US Hispanic Consumer?

Has the inability of Hispanic agencies to handle and manage the skill-set to target US Hispanic with messaging and media in English help accelerate the process?

Has the Association of Hispanic Advertising Agencies taken a leadership role in helping their members better understand the changing dynamics and opportunities for the next decade?

Have the agency heads been myopic and provincial in their agency business models and views on how to target US Hispanics?

Have the agencies milked the sacred cow of business and strategies of yesteryear in targeting US Hispanics to the extent that they are no longer an assets to clients and are unable to manage change and a new direction?

What is the most valuable commodity for a ad agency in targeting US Hispanics - creative, Insights or media planning & buying?

Do we understand that the mainstream agency’s media planning, buying and their computers are far more powerful than ours?

Do we understand that by continually using Latin American assets to produce our creative needs just showed clients and mainstream agencies that they can rely on their own assets in place in these countries at a discount?

Do we understand that our only true assest is our unique INSIGHT into the US Hispanic Consumer?

These and many more questions will define the next 12 months for the US Hispanic Advertising Industry.

It is do or die, since mainstream agencies and advertisers know the changing demographics of America and are in some cases better prepared than our Hispanic ad agencies to handle the demands.

What do you think?


Gene Bryan



The battle of General Market (GM) agencies vs. Hispanic (HCM) agencies has been heating up for many years and I'm not sure that we, as a consolidated group, have done enough to get ahead of it. This is an issue that we need the "industry" to take very seriously, as the trend is not going away, but the $ are. Some of us may remember that early on, we were all independent agencies and serviced anyone, including GM agencies whose clients needed our expertise. Then, some GM agencies decided it would be good to have us as a partner and acquired many of those agencies; some at 10% some at 49% and some at 100%. In the last 10 years the number of Hispanic agencies exploded because of the importance of the market and GM agencies took notice of the budgets and set themselves up with many "Latino" partners or in-house groups. All along, many GM agencies were planting the seed of the "tipping point", when the volume of Hispanics turned from Span-dom. to Eng.-dom. And today, there is plenty of data out there that allows GM agencies to say that they can cover the Hispanic market more efficiently (cost - not necessarily effectively) because they are reaching the "English-speaking" Latino which is more than 50% of the "Spanish-dominant" (generalization - not all products' target segment break out this way). Add to that equation, the economic factors and you get major consolidation of accounts, GM agencies offering services that they are not experts in, but make dollar sense to CMO's (or as they are calling now Chief Measurement Officers). Yes, we deliver quality. But right now the "$ is king" and HCM agencies are being squeezed. The market continues to grow and GM agencies are not going to give back what they have garnered. So, expect more consolidation. Looking ahead, how do we get in-front of GM agencies delivering quality and absorbing the industry as a whole (remember when we all had media departments)? We all know very good creative directors and planners that are fully bilingual and can play both rolls. We use them for the same purpose of taking some of the GM business. How long before they start doing the same? AHAA?

I think Ingrid's approach is the right one. Time to chase Gen Market accounts. Especially those targeted to younger audiences where "minorities" are not so minority anymore. And that's at the core of what's happening: The "Gen Market" has shrunk. If you're targeting 18-24yr old fast food eaters, as I'm sure BK is, your "gen market" only represents 50% or less of your opportunity. So what is CPB to do? Be happy with reaching a smaller and smaller segment of the population every day? Or...come up with a way (or at least a claim) of reaching the whole shebang? Though in cases similar to this one it feels a little like sweeping some of the MC issue under the rug...or does CPB really have the staffing in place to handle a "serious" MC approach?

I read the New York Times article with a little disbelief because it was only a short time ago LatinWorks picked up the BK and now was getting fired over a "consolidation" brought on by a new global marketing director. Time will tell if it was the right decision for BK. But I also think that CP+B should be nervous too. Hot creative shops rarely have long term relationships, and ex-Coke marketing folks bring a little leading soft drink arrogance with them. Anyhow, the following quotes in the NY Times article to me are disturbing, because i read many posts/blogs/white papers written by Hispanics marketers/experts/planners/etc. who would help you rationalize the Burger King (and other recent Anglo agency consolidation) decisions. The quotes are: "Based on where our consumer is,” Mike Kappitt, chief marketing officer for North America, “the X and Y generations” and their beliefs in the “melting pot.” Is this not a reflection of the many POVs within the Hispanic market becoming more bi-cultural - bilingual and English dominant, and they're watching English TV, language is not important, its all about relevant content, etc.? If those POV writers are in fact correct, then its true, there is no future in an agency specialized in the Hispanic (or ethnic) consumer market. Another quote: "consolidating the assignments will provide “a consistent voice,” he added, without overlooking minority consumers." I'll bet you that voice is going to be English frat-boy creative from CP+B, so popular in today's Anglo ad industry. I wonder how its going to resonate with the ethnic audience. Yet another quote: Leo Leon (será latino) , vice president for marketing “We felt the right decision for Burger King is to address all our consumers as a whole,” he added, “instead of taking a segmented approach.” What he means is that BK is comfortable with a one sight, one sound, one sell approach (a fine strategy perfected by brand Coke/T. Levitt), because in the end, we're all "one human race", are we not? The issue is not the Multicultural/Hispanic Agency, the issue is that many Hispanic voices out there are using yetism (American yet Latino) and doublespeak (you need English TV and Spanish TV to reach Hispanics) to describe the Hispanic population that it ends up shooting us in the ass. Its tiring to read the posts/research/data that says "Hispanics are acculturating but retaining their cultural identity/ they live in both worlds," etc. If we want to stay in business, we need to start point out the uniqueness of our consumer, and cut out the talk of how "Americanized" Hispanics have become. I also think that like it or not, Spanish is a key element in our mix, unlike marketing to African American where language is not an issue. Just ask, how large is the pool of AA agencies out there today?

Gene, although I agree that we are at a crossroads, I have to disagree that the GM agencies have "earned the right" to play in our space. Remember when the GM agencies would not even open the door to a meeting with a Hispanic media rep because budgets were too small to care? Or when they would tell the clients they did not need to target this segment? Or when they would recommend, when a budget cut happened, to cut Hispanic budget 100%? I do... Now that we have developed the industry and our budgets are growing while GM budgets are declining, now they are interested. I say that is not earning the right, that is opportunistic (smart, but opportunistic). That said, Hispanic agencies need to continually keep pushing the bar. We can not sit idly and let others take our business away. We (Casanova) are already developing GM creative for several of our clients and in one case, our agency IS the GM agency for the brand. I know we are not alone in this. And I agree with you 100%: WE know this segment, we have the insight. And we can not give it away.

Gene, All good questions, but I would add a few more: 1. Are the advertisers leading this new trend companies known for their diversity at the senior managmenet and board of director levels, or are they run by good ole boys networks that have had frequent diversity and discrimintation issues in their histories? As far as I can tell, none of the three you mentioned have made Diversity Inc.'s Top 50 list in the recent past. 2. In looking at a retrospecitve of the campaigns these big Hispanic spenders have put on the air during their relationships with Hispanic agencies, like all companies they'll either favor a more "aligned" approach or a more relevant approach? I don't know the answer, but if I were a betting man, I know where I'd put my money. This has very little to do with the quality of Hispanic agencies as we all have clients that prefer one direction over another, and we're more than willing to compromise our beliefs when big money is involved. 3. Are the advertisers jumping on the consolidation bandwagon companies that have been struggling economically more than others, and propping up their stock prices as much as they can through cost-cutting rather than through organic growth? The consolidation trend leaders of today may be swinging the other way tomorrow, or they may also be history since they are all being challenged by much more diverse competitors like Lowes, MacDonald's and Sedanos, and are doing nothing more than retrenching to what they've always believed instead of progressing. Retrenching to old beliefs when things get tough seems to be a trend happening with the people of this country as well, and that one is truly a scary one we should be worried about.

The fact that some major advertisers are trying to consolidate their relationships to incur savings does not make it a trend. It makes it a mistake because taking short cuts to connect with consumers never wins. This is especially true of Hispanic consumers who have never been savvier about marketing that connects with them in relevant ways, with respect and authenticity. Notice I didn’t list language. In my view, language is a channel of communication, much like radio or the web. Language is not the strategy or the answer. No, it really isn’t as easy to connect with Hispanics as some may want to believe. My business partner reminds me that the first time we heard that Hispanic advertising would never survive was 45 years ago. Hispanics were all going to speak English, immigration would cease, and birthrates would slow. While it’s true that we now have multiple generations of Hispanics, the persistence of our culture has never been stronger. The reality is that at the end of the day the consumer will have the final say. Consumers will always reward those advertisers that have culturally sensitive and insightful messages, those who understand their mindset and are willing to reach out to them with honesty and respect. Communications today is intimate. The days of global messages are long gone as is the notion that Hispanics will relate to a message that’s simply translated. No doubt, there will be general market agencies that may prove to be genuinely qualified to devise Hispanic marketing strategies. I’m OK with that. In some respects it validates the segment. I’m also OK with Hispanic agencies getting general market assignments. What I’m not OK with is consolidation in the name of economics because that’s when consumers lose and consequently, the brand loses. As I heard on the radio the other day, just because you have a right to do something, it’s not always the right the thing to do.

Home Depot, Publix Supermarkets and Burger King are obviously giving more importance to cutting costs than to a sector of their market which is extremely important and the fastest growing. This is not the first or last ignorant corporation we will run into! I bet the guy who made the decision feels like a genius, but at the end of the day they are saving a dollar to sacrifice 5 which doesn't make sense. That should not change the approach of the agencies that focus on the Hispanic sector; they provide a valuable service that paints a picture of what Hispanics want and need. At the end of the day you get what you pay for, and obviously Home Depot, Publix Supermarkets and Burger King have a vision and approach to the way they do business where they are willing to sacrifice quality, experience and relationships to cut costs. Business is about building relationships that last, and these corporations are sending a direct message to the Hispanic consumer that they are not concerned with providing a product or service to meet their needs. Compromising quality of product and service is NOT the solution to getting through these rough economic times!

If we are going to start chasing GM accounts, we need to have comparable resources. GM accounts that are taken from GM agencies have certain levels of expectations. Reliable Hispanic resources are hard to come by when media and market research firms are not developing methodologies to include the Hispanic market in the mix. Like we did with Arbitron, it is critical that we become advocates for proper measurement. AdViews should measure Hispanic competitive in every market and every medium. And accurate Hispanic psychographic surveying should be fielded by Simmons Experian. GM agencies have all kinds of great resources, but any monkey can talk demographics and population percentages. Similar to Asian ad agencies in LA and Black agencies in Atlanta, what we offer is a deep understanding of that demographics' clockwork and what makes it tick because we live and breathe it. So, combining resources with this insight ... this is our upper hand.

A word of thanks to all who have chosen to comment regarding this topic. Whether you all intended it in support of our agency or not, we’re thankful either way. Debate of this kind can only be good for our industry. Having said that, please allow me to express a few thoughts: 1.As the agency on the other end of Burger King’s decision to consolidate their business at CP+B, we are the most affected party, yet we believe that Burger King acted fully within their right to explore a different approach to addressing their consumer issues. We don’t have to agree with their news media quotes, and we don’t have to agree with their beliefs about consumer marketing to understand that in the end there is no malice to their actions. They are marketers trying to sell a product and we must totally respect their right to search for a better way. 2.We are not of the belief that as an industry we are facing a General Market agency versus Hispanic agency war. Instead, we are facing clients who are seeing the true value of Hispanic consumers and are beginning to demand that their general market shops be more accountable for the way they position brands in the current consumer environment. And this poses a huge challenge to general market agencies that only time will tell how successful they’ll be in meeting it. 3.Clients who choose to go the consolidation route believe, for the most part, that their actions will help them win in the marketplace. They believe that a single voice behind a universal solution is the way to address ALL consumer challenges they face. And they are willing to incur major risks to their businesses, to their brands, and to their viability in the marketplace in order to test this point. Good for them. They are worthy of our respect for willing to roll the dice and take a chance. In the end, results will tell the story; believe me, if they fail, the Hispanic marketing and advertising industry will regain a client--guaranteed. But if they win, we must be willing to look closely at their approach and learn as much as we can from them. Nothing will kill our industry faster than a refusal to consider change for fear of the unknown. 4.As marketers who have chosen the Hispanic market as our niche, our job is the same it’s always been: Apply all of our knowledge and expertise to the understanding of this group of consumers and the segments within it. Infuse the marketing discipline with our insight, cultural intuition, and personal experience to uncover the issues each of our clients face, and craft creative solutions to address them. There is no general market agency out there that can do this better than we can. And if there is, then they deserve a chunk of our business. It’s as simple as that. Thanks again to all. Know that at LatinWorks we carry on, much richer for the learning Burger King provided to our shop, and excited as ever about the opportunities ahead. Burger King is a great company, filled with talented individuals–many of them Hispanic. We wish them well in their quest to sell a ton of product to the Hispanic market.

I agree completely with Alejandro. Why are clients rethinking their approach to the Hispanic market? Because they are dramatically rethinking their approach to marketing overall. The trend to consolidating Hispanic within a general market agency isn't new: McCann has had an internal Hispanic team for years to handle MasterCard. At the same time in the last 6 months we have seen a lot of marketers recommitting to the Hispanic market and looking for specialized partners. What is clear is that there is no longer (if there ever has been) a "one size fits all" approach to marketing to Hispanics. What makes most sense will depend on how a company is organized and how well they understand the importance of multicultural consumers to their bottom line. In the end the business results will be the ultimate judge. Was it Einstein who said that the definition of insanity is doing the same thing and expecting different results? This should be a time for experimenting in our industry. Just as LatinWorks was on the losing end of one business decision, this week they were on the winning end of another bold decision by GM. That's the nature of our business. Competition is what makes us better as agencies and ensures that we continually add value to our clients.

Gene, you allude to it in your comment on media but I think the day Hispanic media agencies pushed for network buys on Spanish-language TV, that is the day they lost the battle with GM agencies. In their quest for the holy grail they relinquished, as you have stated many times, their most prized posession: el insight.

BK was, is and will always play second fiddle to the almighty McD's, because BK chooses to do so.

i've said it before and i'll say it again. it is an open marketplace out there. therefore, any client has the right to identify potential solutions out there which best solve their current (and hopefully future) marketing and business challenges. likewise, any agency has the opportunity to seek clients who best match their unique qualifications for providing superior marketing and business solutions. now, no one said all opportunities are equal. at times some agencies have a better shot at a client if they've worked in the category, have existing relationships with client decision-makers or are seen as superior in skill set and/or talent base. but the suggestion that multicultural turf is somehow sacred ground reserved only for traditionally multicultural agencies is simply ridiculous. it's up for grab, folks. has been for sometime now. this isn't something that just started happening or was even not predictable. how many multicultural agencies have enhanced their capabilities to go over after the whole enchildada? plenty. so it goes both ways. so the historical turf is under attack. so what? why are we in defense mode? why aren't we in offense mode...constantly? vigorously? selfishly? it's game on, folks.

I'd like to approach the predicament of Hispanic business from a different angle than the ones expressed so far on this post. All the questions you listed somewhat reflect your bewilderment as to why the situation of Hispanic business,in your case advertising,has deteriorated in the recent years. As a tangential illustration of business as capitalism consider that approximately 98% of Fortune 500 CEO's are White.I believe this statistic is an accurate barometer of the business world in general.The iron law of capitalism spares no one including Hispanics.Like it or not we live in a system based on Capitalism in which racism is an integral element, a pillar of the system.The old saw "the big fish eats the little fish" has much truth to it.It doesn't surprise me at all that Hispanic business would be swallowed up by the white corporate business shark.They invented it,they are masters of the art ,they have perfected their art to the degree that Hispanic challengers have literally no chance at all to get a significant piece of the action.This is how the game of Capitalism is played.Hard ball. Like a bucket of cold water,or a slap in the face Hispanic business is getting the same "treatment" other Latinos are and have been getting all along. Your problem is not financial or anything else is a political problem. e back to the barrio.

As Alan suggests very well, many marketeers are re-thinking their "approach to marketing overall". And we in the Hispanic market cannot be excluded from an all inclusive re-engineering process that any big marketeer will pursue. The need for growth is always an imminent priority. The world is changing, therefore societies and markets are changing, what stays consistent is the need for business growth and within that, the need to stay relevant. No one in this market could under estimate our understanding of the Hispanic consumer. I do not think that is the issue. We are the marketing communications professionals that, irregardless of ethnic background composition have dedicated a good portion, or the totality of our careers studying, researching, analyzing, living, breathing, planning, creating, directing and producing on behalf of the Hispanic consumer and the brands that understand the importance of knowing how to cater to the needs of the Hispanic market. To me, being an executive creative director in this market for the last nine years on national leading brands is very clear. But another thing that has become clear to me is that the market as a whole is changing and so is the Hispanic consumer and the Hispanic market. We are ADVANCING like never before, we are the leading cultural collective group of consumers and brand advocates that are re-shaping the economic landscape of this country, and probably the political future as well. And we Hispanics are more INTENSIVELY EMBRACING than any other group many of the new communication technologies; because no other collective cultural group in this country has the need to communicate as intensively and passionately as we do. We as marketeers and Hispanic agency purveyors have a tremendous business opportunity in our hands, because the INSIGHTS that are going to meet at the crossroads with those brands are yet to emerge as we keep embracing and fostering our own needs to CHANGE.

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