Status Check: U.S. Hispanic/LatAm Agencies in 2008 and 2009
Portada speaks with Andre Jean, Associate Director of Strategy for OMD Latino, on the current state of affairs for Hispanic agencies, the challenges surrounding GM agency encroachment, growth categories for 2009, and the different trends influencing agency approaches in U.S Hispanic and Latin American markets.
What can a Hispanic agency accomplish in terms of engaging Latino consumers and producing results that a general market agency cannot?
A Hispanic agency can accomplish a faster, smarter, warmer response from Latino consumers and be a step ahead, having case studies, trial & error experience of ROI programs that produce results. Because grassroots, word-of-mouth, community/family marketing is so vital to create sales from the Latino household and Hispanic agencies can leverage the edges it has over General Market agency.
What are those edges? The #1 edge a Hispanic agency has right now is the first-to-market 20 year head start they have. The #2 (and most important) edge the Hispanic agency has is the knowledge, experience, relationships, and philosophy of its leaders / management team. #3 is the insights that are gathered by the personal experiences of its (hopefully) bi-lingual, multi-national staff. #4 is the “borrowed-from-the-Africa-American-community” FUBU (for us by us) mentality that the U.S. government and other industries foster by mandating business go to Hispanic owned entities. Latinos (just like Blacks, Asians, etc…) will always gravitate to things created by them for them. Now soon, when the General Market agency hires the talent of the Hispanic agency, I may have to think about this much harder.
What impact do you think the current economic situation is going to have on the number and size of Hispanic ad agencies?
In general, the number and size of agencies with a client roster centered around Auto or Banking related accounts may shrink. Smaller and/or newer agencies may have to fold or merge with larger agencies. This may also be the time that holding companies that were looking at buying a Hispanic agency or specialty company should move aggressively.
Will the current economic environment cause marketers to target one particular market segment over another (English-preferred, Spanish-preferred, etc)?
Yes, there is already evidence that many marketers’ expansions into the English dominant, Bi-lingual, Luxury, and even Young Adult/Youth Latino markets are on hold or cancelled for 2009.
Why do you think we are seeing more Hispanic agencies partnering with one another?
For one thing, there are many smaller Hispanic agencies and specialty shops that need to partner or get merged because they will be too small or too specialized to prosper moving forward. In other words there are too many Hispanic agencies in this country – in 10 years the leanest and meanest will be left standing.
Does it help, as a Hispanic and Latin American focused agency to have the backing of a large general market ad agency?
In the U.S., yes, in Latin America not necessarily. Before in Latin America, a name brand general market agency launching a branch in Latin America was much more likely to succeed. But now that concept has matured and there should be newer, independent, nimble shops popping up all over Latin America. In the U.S., the reverse is true. There are too many little and/or independent Hispanic agencies and those, outside the top, that are aligned with a General Market agency are positioned to survive in the long run.
What would you say to the argument that since many U.S. Hispanics aspire to American ideals and customs, they are best reached by general market advertising?
I say to change the phrasing of that sentence to WILL BE best reached by general market advertising. That can be a 20 year process. Hispanic media / Spanish language media has been growing over the last 25 years due to immigration and stronger family ties being built over time to the U.S. born Latinos. It is ok for young people in the U.S. to have two cultures. None of these things should change over the next 25 years. But after that, we could see a shrink in the totally Spanish dominant or unacculturated Latinos that may be reaching their senior years (or the yet to be discussed "Return Home to Retire" syndrome). If this was a graph we are nearing a long (safe) safe plateau in the bell curve, but 25 years from now the dip will be on its way down.
Are any ad categories increasing ad-spending in ’09?
Yes; telecommunications, healthcare, pharmaceuticals, and even certain banking brands that were behind to being with.
Has OMD Latino won any new accounts recently?
OMD Latino / OMD in 2008 picked up Visa, Clorox, & Absolut Hispanic accounts.
How is the way in which you approach Latin American markets different from how you approach the U.S. Hispanic market?
First off, for Latin America we can leave the English vs. Spanish and GM vs. Hispanic arguments out of it, which spares a lot of wasted time, energy and resources from the agency & client. Second, there is a necessity (no “Should we?” conversations) for most brands to have a strategy for each country which allows for robust and different approaches.
Soon the strategy to combine Latin American and U.S. Hispanic approaches will start to become a larger part of the most sophisticated marketers’ (P&G, McDonalds, Nike, Apple) plans.
That will become more obvious as older Hispanics, the wealthy, and students start moving to home countries in huge numbers when the economies of Latin America and the U.S. change
A) If the U.S. has a prolonged slump and/or
B) Those countries economies start to improve.
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