Twenty-five years ago, Hispanics occupied nearly all of the executive, creative, and copywriting positions in the then-smaller Hispanic advertising industry. General market advertising conglomerates also lacked Hispanic divisions and few Latin America-based media conglomerates targeted U.S. Hispanic consumers.
Now, a growing variety of media companies based in Latin America and Mexico are chasing Hispanic consumers, Hispanic advertising agencies are hiring talent in droves from the two regions, and practically every general market advertising agency interested in owning a Hispanic agency has bought or launched such a unit.
Marketing to Hispanics in the United States and the media that delivers it are taking on a Latin flavor as a consequence of globalization. Latin American television and cable networks, publishing companies, and other media all want a piece of the fast-growing and increasingly diverse U.S. Hispanic consumer market.
Hispanic media executives say that the growing global influence on U.S. Hispanic-oriented media is inevitable, and the impact is mixed.
"Is it going to be the most effective way to connect with all levels of U.S. Hispanic consumers? Perhaps the more upscale, more global and educated consumers, yes. But there are multiple segments of the Hispanic market. The diversity of that market makes connection more difficult," says Daisy Exposito, chair and CEO of New York-based D Exposito & Partners and former chair and CEO of The Bravo Group, a Hispanic agency also based in New York.
According to media executives, the internationalization of U.S. Hispanic marketing and media has the advantage of giving Hispanic consumers more media options.
However as advertising executives turn to advertising professionals from Latin America to fill what they say is a shortage of U.S. Hispanic Spanish-speaking talent, some in the industry see a downside. Advertising professionals fresh from Latin America don't fully understand the U.S. Hispanic consumer market, its historical roots and marketing complexities, they say, so some advertising campaigns may not reflect the unique cultural sensibilities of U.S. Hispanics. Global advertising conglomerates with Hispanic units take business away from small independent Hispanic agencies.
The globalization of media and marketing to Hispanic consumers occurs as they become more internationally diverse themselves. People with Mexican roots dominate the U.S. Hispanic population, as they have for decades. Mexicans account for about 65 percent of Hispanics, according to the U.S. Census. Puerto Ricans, Cubans, Salvadorans, and Dominicans represent about 20 percent of Hispanics, and the remaining 15 percent come from every other Latin American country.
The diversity is more apparent in certain regions. In Florida, for example, Cubans were once by far the fastest-growing Hispanic group. Currently, the number of non-Cuban Hispanics is growing at a faster rate than the number of Cuban Americans.
Latin American Influence
The growing size and diversity of the U.S. Hispanic market attracts Latin America-based media of all types, for example Azteca America, the U.S. Spanish-language subsidiary of Mexican television network TV Azteca, which targets Hispanics with affiliates nationwide. Cable television channels and satellite services bring more than 75 Spanish-language channels into U.S. Hispanic homes, according to the Cable Advertising Bureau, a New York-based industry trade group. Channels specialize in news, sports, entertainment, movies, and other areas. The channels originate in Mexico, Colombia, Venezuela, Argentina, Peru, Spain, and several other Spanish-speaking countries.
Mexico's Grupo Televisa is the leading producer of Spanish-language media and content in the United States. The media conglomerate provides the bulk of primetime programming for Univision, the No. 1 Spanish-language network in the United States. Grupo Televisa's Miami-based Televisa Publishing unit produces 12 Spanish-language magazines in the United States, including two of the top five titles ranked by advertising revenue, according to Fort Lauderdale-based Media Economics Group, which tracks Hispanic magazines.
Because of the growing Latin American ownership of media aimed at U.S. Hispanics, "Hispanics have more choices for consuming media," says Gabriel Reyes, president and founder of Reyes Entertainment, a Hollywood, California-based public relations and marketing agency. "They are able to see an evolution in content offered."
Much of the Latin American-owned media reports heavily on Hispanic singers, actors, celebrities, and trends that are increasingly influencing U.S. pop culture, Mr. Reyes adds.
On the other hand, critics say, Latin American-owned media that target U.S. Hispanics don't reflect their culture. That's especially true for second- and third-generation Hispanics, and that's where U.S.-based Hispanic-oriented media has an edge, Mr. Reyes says. The leading players targeting young Hispanics are Los Angeles-based English-language cable network Sí TV, MTV Tr3s – the music video network's bilingual, youth-oriented cable network – and Miami-based Telemundo's Mun2, which targets young Hispanics mostly in English.
The Big Guys
Nowhere is the globalization of Hispanic media more evident than in the Hispanic advertising industry. Nearly every advertising conglomerate has a Hispanic agency that they acquired or started in-house. Advertising giants with Hispanic units include London-based WPP, Paris-based Publicis Groupe, and New York's trio of The Interpublic Group of Companies, Omnicom Group, and Euro RSCG Worldwide. Some conglomerates own more than one Hispanic agency. For example, WPP owns The Bravo Group and New York-based Winglatino.
Conglomerate-backed Hispanic agencies make it tougher for small independents to compete for accounts. The theme of this year's conference of the Association of Hispanic Advertising Agencies (AHAA) was "Are Hispanic Advertising Agencies Dying?" Of course not, convention attendees concluded. But AHAA executives say they raised the question partly to examine how agencies are rethinking their approach to the Hispanic market partly due to competition for ad dollars against agencies owned by global companies.
"The smaller agencies have a little bit more of a struggle. We have to fight for bigger accounts," says Barbara Ruano, CEO of Huntington Beach, California-based independent PlanetWoot.
Eduardo Bottger, president and executive creative director of Tustin, California-based independent alPunto Advertising says: "Ten years ago, we would go up against five Hispanic agencies during the first stage of competing for an account. Now some of our clients say they start with up to 30 Hispanic agencies."
Larger independents tend to fare better than the smaller ones. Miami-based independent Zubi Advertising is one of the 10 largest Hispanic agencies in the nation. "Hispanic shops of the big agencies have more resources due to their size and can borrow resources from their parent company, but we are more than holding our own," says Michelle Zubizarreta, Zubi's chief administrative officer.
She notes that independent agencies such as Zubi enjoy a side benefit of their status. "It has advantages when you look at the push in large corporate diversity programs to hire minority firms. It would affect us if we sold 51 percent of who we are," Ms. Zubizarreta says.
Hispanic agencies compete for pieces of a small pie. Marketers spent more than $4 billion on Hispanic media in 2006, compared to more than $150 billion on all media, according to TNS Media Intelligence. The $4 billion for Hispanic media represents about 3 percent of the $150 billion total, although Hispanics make up 15 percent of the U.S. population.
Another critical outcome: Hispanic agencies handle a shrinking portion of clients' media buying budgets. More corporate clients are consolidating their media planning and buying duties. Earlier this year, Wal-Mart shifted its $60 million in media planning and buying responsibilities to Starcom MediaVest Group's 42 Degrees, which is based in New York. The agency took charge of duties previously handled by Wal-Mart's multicultural advertising agencies, including Houston-based Lopez Negrete Communications, which remains the retailer's creative agency of record for the Hispanic market.
Corporations claim that such consolidation makes their advertising and marketing efforts less expensive and more efficient. While consolidation may make good business sense for corporations, it leaves Hispanic agencies to execute only creative duties and less able to become full-service shops.
"The division of media from the creative and strategic has hurt even general market agencies," Ms. Exposito says. "So, imagine doing this in the Hispanic segment when we are still in the process of building the industry ... [and] educating corporate America about this consumer segment."
As the Hispanic advertising industry matures, it is recruiting more talent from Latin America and Mexico to work in the United States, or to work from their home countries on U.S. accounts.Agency executives say they must hire from abroad for two major practical reasons: Nearly all of their advertising campaigns are in Spanish, and there is a shortage of U.S. Hispanics with the right combination of marketing talent and Spanish language skills.
Agency executives say that the U.S. Hispanic advertising industry, for most of its existence, hasn't been large enough to attract and train enough domestic talent to go around. "The Hispanic advertising talent base hasn't matured in this country," says Bryan Garcia, president of Plastilina, a Los Angeles-based independent agency that was founded this year and specializes in targeting Hispanic youth.
Mr. Garcia's partner was recruited from Mexico two years ago by another agency. "There is a premium on creative talent from Mexico because they represent the largest portion of the Hispanic population," Mr. Garcia explains.
At alPunto, which has more than 45 employees, most of the agency's U.S.-based copywriters are from Mexico and Latin America. "We hire foreign-born copywriters because we want their first language to be Spanish," Mr. Bottger says. "Most Hispanic copywriters have English as their first language."
The agency also has six employees that work from Argentina, Mexico and Peru.
"Most of them have worked in the Hispanic market but for different reasons are back in their home countries," Mr. Bottger explains.
Tony Ruiz, partner and chief strategic officer at The Vidal Partnership, says his New York-based independent agency has recruited 10 to 15 percent of its creative people from Mexico, Argentina, Colombia, and other countries.
Zubi Advertising has hired a copywriter from Mexico and a member of the creative staff from Argentina. "It's difficult to find them in the U.S. The best talent already works at competitors," Ms. Zubizarreta explains.
Some agencies recruit Latin American talent only for certain positions.
"In the case of a designer, it's not crucial for the person to have lots of U.S. advertising experience," says Ms. Ruano of PlanetWoot, who hired a designer from Chile. "However, for creative people, I would feel more comfortable with somebody who has been around the U.S. and knows this market."
Hispanic media pioneer Eduardo Caballero has noted the hiring trend.
"We see more educated and well-prepared talent coming from Latin America and becoming involved with creative positions in Hispanic advertising than Hispanics who are educated in this country," says Mr. Caballero, a founder of AHAA and former owner of MasMusica TeVe Network, which was sold to Viacom Inc. in 2005.
Mr. Caballero believes the trend is impacting Hispanic consumers.
"They are bombarded with commercials that often aren't culturally relevant," whether they are in Spanish or English, he says. "A creative person might be Argentinean and the marketing director might be a Mexican-American Hispanic. Maybe the Argentinean doesn't speak English and perhaps the Mexican American doesn't speak Spanish. They come from different cultures and may have different visions for advertising that don't reflect Hispanic consumers."
Ms. Exposito agrees: "The globalization of marketing to Hispanics can create a one size fits all attitude that sometimes fails to make that emotional connection with consumers that can make a difference in purchasing decisions," she says.
Executives at Hispanic agencies say that the influx of Latin Americans doesn't make it more difficult to produce culturally relevant advertising for Hispanics. The executives say that the industry is growing because agencies create ads that get results for clients using talent from Latin America along with Hispanic talent. "Not too long ago, corporations gave Hispanic agencies the perfunctory million-dollar budget," says Alex Lopez Negrete, CEO of Houston-based independent Lopez Negrete. "The budgets are much bigger now because clients are getting good returns on their investments."
Nobody believes the shortage of Hispanic advertising talent will last.
"Now that the Hispanic market is approaching critical mass, there are more Hispanics clamoring to get into the industry and they are of high quality," Mr. Lopez Negrete says.
Ms. Exposito adds, "There is more Hispanic talent in universities these days that can be trained and groomed to fill positions in the advertising industry."
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