From the outside, Hispanic advertising looks healthy, thanks to rising budgets, a growing client roster, and multiplying media outlets. But inside the industry, some traditional Hispanic agencies that have been acquired by marketing conglomerates face a growing fight to keep the most lucrative piece of the business: media buying.
"From the beginning, the Hispanic market was presented to advertisers and sold by agencies as a concept, as a cultural matter, not a number matter," says Eduardo Caballero, founder of radio rep firm Caballero Spanish Media and now CEO of Florida-based Caballero TV & Cable Sales, parent of music channel MásMúsica TeVe.
"General market agencies were reluctant to participate in the creative process because they didn't have the cultural concept," he says. "But recently, Hispanic agencies have accepted the absolute guidance of Nielsen on how to buy the Hispanic market, and Hispanic media buying has changed in a terrible way."
"In the Hispanic space, general agencies are making a run for media," says Jessica Pantanini, COO of Bromley Communication, a multicultural advertising umbrella agency controlled by France's Publicis. "We have the upper hand here, however, because while NBC owns Telemundo, and Viacom owns [a minority stake in] SBS, neither has been able to deliver a compelling reason to bundle the deals."
In contrast to the creative part of advertising – where knowledge of the Hispanic consumer clearly plays a role – media buying is mostly a numbers game at large agencies. The question is whether the Hispanic market is so different from other consumer segments in the U.S. economy that it requires specialized Hispanic expertise to make media buys. And that is where the debate rages.
For a corporate parent, consolidated media buying streamlines the process and allows it to gain volume discounts from media outlets, according to Joe Zubi, CEO of Zubi Advertising in Miami.
For example, MindShare performs this media service function for WPP Group, which includes Hispanic shops Bravo Group and Mendoza Dillon. MediaVest has a similar role at Publicis, parent for Bromley Communications and Conill; and Universal McCann handles it for Interpublic Group of Cos., with Casanova Pendrill and Siboney USA under its wing. Not that all of these agencies have lost their media-buying roles, but the threat is present and growing.
"There has been a consolidation of media buying at large conglomerates, but Hispanic agencies haven't lost the function of buying," says Mr. Zubi. As an independent agency, "it hasn't changed the way we buy media," he says.
Also, in recent years Hispanic agencies and clients have moved toward a numbers-based approach to the market. In the words of Daisy Exposito, former CEO of The Bravo Group in New York: "We've gone from the art to the science." Adds Ms. Pantanini, "Now that marketers understand and feel the pressure of addressing [the market], we've evolved to quantifying the opportunity."
But applying that logic to media buying can work against new media, Mr. Caballero believes. Centralized general market-oriented buyers tend to make only the big easy buys – Univision and Telemundo – while they neglect to feed the start-ups that provide more options for advertisers.
"It affects everyone, especially in new media, and media difficult to buy, such as newspaper and magazines," Mr. Caballero says. "Radio isn't getting its share of national dollars, and new media is totally ignored. You walk into these agencies and they say, 'When you have numbers, I'd like to talk to you.' "
Ms. Pantanini echoes the view of many Hispanic agency marketers when she says that centralized buying may be more efficient, but not necessarily more effective.
While a corporate parent might save a few dollars on the cost of placing an ad, it wasn't a good buy if that ad fails to sell the client's product. The Association of Hispanic Advertising Agencies (AHAA) will feature a seminar on the issue, "Efficiency versus Effectiveness of Consolidating Media Agencies," at its conference this month in San Antonio.
The growth of English-language media for Hispanics also plays to the strength of centralized media buys.
The current Hispanic market includes English-language or bilingual cable channels such as SíTV and Mun2, as well as a English-language magazines and bilingual newspapers. With most of these outlets accepting ads in English or Spanish, the language barrier between Hispanic and general-market ad buys has blurred.
"Corporate marketers are more confused than ever about what they should be doing to reach Hispanics," states an AHAA study on the Hispanic youth market. "Crossover work (culturally relevant English advertising) is a great example of how AHAA agencies continue to deliver solutions to the market."
So far, "traditional Hispanic agencies have focused on the in-language Spanish marketplace," says Ms. Exposito. "I see an evolution: There will be a confluence as 'mainstream' agencies become more multicultural, and Hispanic agencies become more mainstream. However, Hispanic-centric agencies will continue to play a major role as more and more marketers recognize the need to penetrate this complex and important market."
In the future, Ms. Pantanini doesn't expect Hispanic agencies to devolve into boutique marketing consultants in the context of a vast corporate agency. She cites the experience of African-American agencies, a segment where language isn't a factor. While centralized media buying overtook the African-American shops, that was the extent of the slippage.
"African-American agencies continue to provide a full-service offering to their clients, from creative to promotions. They still provide media services as well. Why? Because while cross-viewing exists and clout counts, one cannot ignore the power of vendor relationships [and] of really knowing the consumer and their relationship with media," Ms. Pantanini explains.
What Ms. Exposito predicts is that "mainstream agencies, in many instances, will no longer be able to do their job effectively unless they become more infused with multiculturalism. So it's not a question of one market eliminating the other."
In advertising, the market dictates everything – including the future of Hispanic agencies. "At the end of the day, the client will dictate what that evolution looks like," says Bromley's Ms. Pantanini. "There is power in partnership, and if the holding companies that have a stake in Hispanic agencies don't recognize that, they will fail.
"They must recognize that if they didn't naturally address the changing marketplace and had to go outside their own organizations to secure the expertise, they certainly won't be successful by simply hiring ethnic talent or absorbing the ethnic agencies in the fold of the general agency."
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