At the crux of Starcom Media Vest’s decision to appoint Monica Gadsby’s as CEO of both SMG Multicultural and Latin American units is the assumption that there is a strong relationship between the U.S. Hispanic and the Latin American advertising and media markets.
While there is an obvious cultural and linguistic overlap, generally there is not a strong connection between the Latin America and the U.S. Hispanic markets. Put in economics terms, the composition of the demand (clients and agencies) for advertising and marketing campaigns differs a lot between both markets.
Expertise held by different agencies/clients
Portada covers and knows both markets in-depth, it actually organizes conferences for each of the markets, and while the players on the media side often have interests in both the Latin American and U.S. markets (e.g. DirecTV in the U.S., Mexico’s Televisa, Spain’s Prisa, Venezuela’s Venevision etc..), decision making for advertising purchases tends to come from different agencies for each of these markets. In fact very few, agencies share their Latin American and U.S. Hispanic media departments and often, particularly in the case of smaller agencies, they have expertise in one or the other, but not in both. For example, Miami’s Grupo Uno is a shop exclusively dedicated to reaching Latin American audiences, while Zubi Advertising in the same city is exclusively focused on helping its clients (e.g. American Airlines, Chase) to reach Hispanic consumers.
Rarely the same decision makers buy advertising for both U.S. Hispanic and Latin America (San Antonio’s Bromley is one of the few exceptions; see for instance their 2007 Reynolds Wrap campaign).
…who are based in different places…
In fact, even geographically there is a big difference. While agencies and corporations targeting the U.S. Hispanic population are based all over the U.S. (with a strong representation in New York City, Miami, Los Angeles and some Texan cities (e.g. San Antonio), agencies and clients targeting the Latin American consumer are mostly based in Southern Florida (particularly in the Miami area) and, of course in Latin America. In the case of large Spanish companies (banks, telecommunication and energy companies) in Spain.
…and cater to very different audiences.
Clients and agencies interested in reaching the U.S. Hispanic market and the Latin American also cater to very different audiences While the U.S. Hispanic consumer tends, with notable exceptions, to be a first or second generation immigrant and relatively low, for U.S. standards, purchasing power, the Latin American consumer targeted by clients and agencies generally is a high income individual that belongs to the upper or middle class Latin American consumer segment.
Why integration of Latin American and U.S.Hispanic may make sense for large companies
Large Fortune 500 companies generally have totally separate departments for their U.S. Hispanic and Latin American marketing endeavors. However, they may centralize their creative and media buying/planning work with one agency and there are efficiencies and “brand consistency issues” across all markets that speak in favor of the integration of Latin American and U.S. Hispanic work. In fact, according to SMG’s Gadsby, her new job will include looking at cross-border opportunities to help develop content that works in both Latin America and the U.S., for clients that SMG handles in the two regions, such as Procter & Gamble Co., Kraft Foods, Kellogg's, Coca-Cola Co. and General Motors Co.
"There is a lot of possible overlap between U.S. Hispanic and Latin America. For a long time, we were so stuck on how the consumers we're targeting are different. One thing we now have in common is that technology has enabled consumer control across all borders." Gadsby told Advertising Age.
One of the few other networks to put a similar structure in place is DDB Worldwide, where Miami-based Juan Carlos Ortiz is president of DDB Latina, a region that includes U.S. Hispanic, Latin America and Spain. DDB Latina has already won two accounts, Rosetta Stone and Kyocera Wireless, through joint U.S. Hispanic-Latin America pitches. (Most of the media buying of DDB accounts is done by OMD out of Miami).