No Fading Here

  By Linda Lane Gonzalez, president of AHAA: The Voice of Hispanic Market

MediaPost recently published an article entitled, “Why Hispanic Agencies Are Fading,” talking about underpaid specialized talent, smaller budgets with big-impact expectations, and incorrect Total Market implementation as contributing factors. As the national trade organization for Hispanic marketers, AHAA: The Voice of Hispanic Marketing, we agree with many of the assessments but not the conclusion.

Hispanic agencies are not disappearing. The article fails to address the broader context of the rapid changes happening within the entire advertising and marketing ecosystem. Do these changes mean more competition for us? Yes. Is this competition anything new? No. Are Hispanic agencies in a better position to tackle these changes? Absolutely!

Research says – Follow the Leader

Marketers looking to connect with the Hispanic market need only to look at the trends among category leaders. Companies like Nissan, Toyota, Walmart, Target, Lowes, Verizon, AT&T, McDonalds and many others that strengthened their investment and reach to the Hispanic market.  And these market leaders are not alone. In 2015, the top 500 U.S. marketers are allocating about 8.4 percent of their overall ad spend to Hispanic dedicated efforts, this is up from 5.5 percent in 2010.  Over the past five years, the top 500 advertisers boosted their spending in Hispanic targeted media by 63 percent. This growth is led by the Best-In-Class marketers who allocate more than 14.2 percent of their ad dollars to Hispanic dedicated efforts and the number of these elite companies more than doubled in the past 5 years. The lesson from the top U.S. marketers is clear – follow the leader.

Giving Specialist Agencies a Seat at the Table

In another example of where marketers can follow a market leader, some leading marketers have not only thoroughly embraced the Hispanic consumer but they have restructured their business units and agencies around it.  They have not used Total Market as a way to take a blanket approach, but rather have embraced their specialist talent and given them an equal seat at the table and a voice in the overall strategy but with dedicated efforts. These are great examples that other marketers are following and we encourage this.

Definition of Total Market Gone Wrong

Competitive voices often lead marketers to believe they can reach Hispanic consumers with a “Total Market” approach. The Total Market definition they often hear is based on wrong assumptions and defined as a one size fits all approach. This couldn’t be farther from the truth. The real definition endorsed by ANA, AAAF and AHAA says a Total Market campaign should have an overarching campaign that resonates across key target audiences, BUT it also needs to include segmented approaches that speak to cultural nuances, insights and purchase triggers unique to key growth targets.

Talent Shift Does Not Equate “fading”

We are seeing, multicultural talent being lured away from Hispanic agencies into non-multicultural agencies and/or client side, but this is not a new phenomenon and certainly doesn’t mean Hispanic agencies are fading. Those that take this route often find themselves creating broad, multi-platform, multicultural, mediocre solutions – another “one-size fits all” for clients. One only needs to look a bit further to see that the agency battleground is littered with the fragments of these multicultural do it all agencies who failed and lost in the end. Competition for marketing dollars has increased – but that is across the board, and is not limited to the Hispanic market. For every Hispanic agency that “faded” in the last 10 years, others have grown and new ones have formed –  a sign of a viable and vibrant market. In fact, more Hispanic focused agencies made Ad Age’s 2016 list of Top 500 Ad Agencies than ever before — a trend we expect to continue.

Change and competition is not limited to Hispanic Agencies

Finally, the ever-changing demographics and frenetic digital innovation have left ALL agencies – not just Hispanic –scrambling. Ad Age’s 2016 Agency Report illustrates just how the agency landscape is changing, and how old-line agency companies face increasing competition from all sides and from new players, including the media, tech companies, consulting groups, and specialist players.

According to Mark Read, CEO of WPP’s Wunderman, “Agencies will be built around clients and consumers, not brands or channels like TV or digital. There won’t be a lead agency but disciplines sitting as equal partners in a much more fluid structure.”

Hispanic agencies — large or small, independent or part of a conglomerate — are here to stay.  Hispanic agencies are uniquely equipped to deliver cutting-edge creative that is backed by key consumer insights. Hispanic agencies are strongest as a united front working together to educate marketers on the power of the Hispanic market and the proper way to harness it.