An account executive needs to know more than Spanish to succeed in Hispanic advertising.
In 1977, a young community relations manager for Levi Strauss & Co. called on a fledgling Spanish-language network affiliate in Corpus Christi, Texas. After the meeting, he came away certain of the potential for the jeans company to make inroads into the Hispanic marketplace–if Levi’s approached those customers in a more targeted way. He took the idea to his bosses. “Victor,” he was told, “we’re already reaching them through general-market advertising.” The rookie’s response? “You’re mistaken because all the ads are in English.”
Twenty years later, that Levi’s community relations manager, Victor Ornelas, is president of Ornelas & Associates, an independent $20 million Latino marketing agency in Dallas. The south Texas television station is now an affiliate of Univision, which, according to Nielsen ratings, brings in more prime-time viewers nationwide than all but the four major networks. And, last August, Levi’s launched a Hispanic campaign from Bromley, Aguilar & Associates of San Antonio, Texas, which attempts to permeate the Hispanic psyche so deeply it engages in wordplay, toying with the familiar swapping of Spanish and English prevalent in Hispanic America to reflect cultural pride and optimism. Even the “They go on” tagline morphs into “Te llevan” (“They take you”).
Though client dollars allocated to Hispanics remain small as a percent of total domestic advertising spending (no major mainstream marketer spends more than 4 percent of its budget in the field), most blue-chip clients have recognized the potential of the Hispanic market in the U.S. In 1996, according to Hispanic Business magazine, Procter & Gamble was the leading spender in the field, alotting $39.5 million. After P&G came AT&T ($25 million), McDonald’s ($12.8 million), Sears, Roebuck & Co. ($11.5 million) and Anheuser-Busch ($11.3 million). In the past two years, companies such as Levi’s, Texaco, Campbell Soup and MoneyGram executed or developed plans for new forays into Hispanic advertising to the tune of $4-10 million each.
What are those dollars chasing? According to a DRI/McGraw-Hill Hispanic consumer market report for Univision, spending power in the American Hispanic market has mushroomed to $350 billion from approximately $279 billion in 1994. While U.S. marketers doled out some $1.2 billion to reach the community, it still remains a fraction of the $66.7 billion that Competitive Media Reporting estimates was spent on domestic advertising last year. If the total were based on ethnic population, annual spending to reach Hispanics would be in the $6-7 billion range.
All this should be nothing but great news to the minority-managed agencies that have earned profitable and powerful reputations for their Hispanic niche. But there are some clouds amid the blue skies. Agencies say they are still struggling to get clients to spend enough money to support their recommended programs and are now facing the challenge of fending off general-market shops picking up the scent of bigger Hispanic budgets. Agency executives say both issues are pushing Latino shops to define and defend their marketplace–and their very existence to clients–that much further.
Still, Hispanic accounts seem primed for growth in the U.S. As client dollars come into the market, the infrastructure in areas such as media research and commercial production is improving. As the support structure starts to resemble that for mainstream brands, those servicing Hispanic accounts theorize, clients should be more comfortable committing budgets to the market. The bright prospects, however, are also placing more demands on those servicing Hispanic accounts, making the field more crowded and competitive than ever before.
“The whole area of Hispanic advertising, production and promotions is right at the $2 billion mark,” says Lionel Sosa, chairman of KJS Marketing, San Antonio. “That’s big business.”
“It’s an ideal time for account executives in Hispanic marketing,” says Rosario Cuellar, director of client services at Miami’s Sanchez & Levitan. “We finally have a lot more resources at our disposal, and we’re better at developing strategy. Ten years ago, there wasn’t a strategy perspective and a research perspective out there. It was done a lot on gut [instincts].”
Key to running an account that targets Hispanics is knowledge of the market, which transcends just speaking Spanish. “I think what’s important [for a Hispanic AE] is to understand the strategic thinking process . . . but still have a thorough knowledge of Hispanics in general, geographically and by segment,” says Tony Dieste, president of Dallas’ Dieste & Partners. “To me, you have to be credible, you have to be relevant and you have to be ubiquitous.”
But to be relevant, Luis Messianu, chief creative officer at Coral Gables, Fla., shop del Rivero Messianu, says, “you don’t need to show a pi-ata, a mariachi band or a guitar.”
“We pitch new business; sometimes we present campaigns and we hear the question, ‘What makes that commercial Hispanic?'” says Messianu. “The truth is, it was created by a Hispanic, in Spanish, but it is a universal idea.”
Yet defining those differences and commonalities may be the Hispanic account executive’s most important role. The variety of Hispanic ethnicity is as rich as one would expect in the American melting pot. The Cuban American influence in Florida and the vibrant Mexican connection in south Texas and California provide perhaps as wide a cultural berth as Italian Americans from the Bronx to White Anglo Saxon Protestants in Connecticut.
A message aimed at a young, urban Mexican immigrant in Southern California listening to Rock en Espa-ol would have to be altered for an older, third-generation Hispanic in Texas who prefers Freddy Fender. “It depends on the product you’re selling,” says Cuellar. “Targeting a younger consumer may mean a more bilingual approach, and he may be into the English culture more than the older [Hispanics].” It can also be broken down by common sense, Cuellar says, as with her agency’s use of Florida Marlins pitcher Alex Fernandez in Florida BellSouth ads and model Daisy Fuentes elsewhere.
With budgets on the rise in the Hispanic field, a minicrisis is developing for agencies in terms of getting work done and raising the competitive stakes for those client dollars. “You have a Hispanic project that used to be $1 million. Now, new advertisers are getting into the Hispanic marketplace with $5-8 million or $10 million budgets,” says Sosa, who founded what is now Bromley, Aguilar. “General-market agencies are not going to want to let go of this business.”
That scenario has recently played out in a few instances. Coca-Cola reassigned Hispanic media buying to McCann-Erickson from Bromley, Aguilar, and Johnson & Johnson absorbed placement duties in-house from Mendoza, Dillon & Asociados in Newport Beach, Calif. As well, Miller Brewing Co. took away its multibrand Hispanic media account from Marti Flores Prieto & Wachtel of San Juan, Puerto Rico, in favor of Leo Burnett’s Hispanic Media Group in Chicago.
In the case of Leo Burnett, the business went to a specialized ethnic unit, which shows that complete independence for a Hispanic marketer is not a prerequisite. Most of the global networks and holding companies are positioned to service their clients’ needs in the Hispanic area. Young & Rubicam owns Bravo Group, and Grey Advertising’s FoVa and True North’s Siboney USA are among the longtime fixtures of the New York-based Hispanic scene. WPP Group owns the $43 million Mendoza Dillon shop, while Bromley, Aguilar is 49 percent owned by the MacManus Group.
Some of the largest accounts are handled by the network-owned units. FoVa works for Procter & Gamble and Arco; Siboney handles Nestle and Colgate-Palmolive; and Bravo services AT&T and Kraft. Independents, however, still have a stake in major clients. Castor Advertising, for instance, handles Anheuser-Busch out of New York.
To protect their turf from general-market shops, independent Latino agencies are turning to a traditional method: creating public-relations heat. Planned for a first-quarter 1998 launch aimed at CEOs and the media, a public-awareness campaign from a newly founded trade group, the Association of Hispanic Advertising Agencies, will look to direct attention to its members comprising 55 of the top Hispanic shops in the country.
“We’re getting new competitors in the field, but they happen to be competitors who are not proficient in our business,” says Hector Orc’, president of La Agencia de Orc’ in Los Angeles and also 1996-97 president of the AHAA. “For instance, the way copy is developed, first strategy is done and then it’s reviewed. If people participating in this process are not fully bilingual and bicultural, I don’t see how they can add anything to it.”
The AHAA member-promotion effort coincides with the formation of a Hispanic Advertising Committee of the American Association of Advertising Agencies (of which AHAA is not affiliated) to begin addressing the concerns of the 4A’s 26 Hispanic shop members. Like AHAA’s public-relations campaign, the committee’s goals and objectives are still on the drawing table.
Orc’ estimates that 85 percent of all Hispanic ad dollars are generated through minority-owned or -managed agencies, versus the general-market shops trying their hand in the market. “There are no secrets to [getting into] our market,” says Orc’, but a problem for most general-market advertising professionals is that many outside the specialization do not know how Hispanics behave in relation to products.
This gives the Hispanic account executive not only a decided advantage over a general-market counterpart in serving the Latino field but, careerwise, places him or her on a faster track and in higher demand. “There were half as many Hispanic advertising agencies five years ago,” says Dieste. “We all have talent on board and not a lot of talent coming out of the universities, so we hire from each other.” (Clients also raid these agencies for their Hispanic marketing staffing needs.) Dieste says the shortage of talented account staffers puts a premium on their services. “A good midlevel or senior-level account person at a Hispanic agency earns the same salary that [similar managers] make” at larger, general-market agencies with up to three times the billings, Dieste notes.
The bottom line? Fewer ceilings, more avenues of responsibility and more opportunities for the individual account executive. Since Hispanic shops are smaller and more specialized, a Hispanic account executive may be in charge of promotions or merchandising for a client simply because the agency isn’t large enough to have a dedicated unit for that category, not to mention limits on client spending. Thus, senior-level jobs and even partnerships can come early to account execs who travel the Hispanic route. Dieste, 31, co-founded his own shop last year after a stint as senior vice president at Ornelas & Associates.
As competition evolves, a number of stereotypes and problems remain to challenge shops servicing Hispanic accounts. Many clients are still unwilling to commit large budgets to the market. Octavio Nuiry, publisher of the annual National Hispanic Media Directory and owner of Long Beach, Calif., shop ON Marketing, says clients that spend too little or nothing at all are the ones “who just don’t get it yet.”
“Some clients think Hispanic equals ‘cheap’ and they don’t spend enough money in the market,” Nuiry believes. “That just ends up hurting the client, because they don’t get the sales they are anticipating.”
Commitment from the client is twofold–giving the agency enough rope to do the job and listening to its in-house Hispanic marketing expertise. Bromley, Aguilar president Al Aguilar says one of his continuing frustrations is having to deal with a fresh batch of client-side ad representatives. “By and large, there has been a very slow response in designating financial and human resources” by clients to Latino advertising, says Aguilar. “For the longest time, we’ve been relegated to working with the entry-level type of marketing managers. At the client level, those are the people who don’t have the authority” for budgets or strategic decisions.
“I think the most frustrating part is the turnover on the client side,” says Cuellar. “The person who generally handles the Hispanic market is usually the assistant [marketing executive], who gets promoted and moves on. We are having to reteach the same thing over and over again. Just when you think you’ve got them sold, they leave and you’ve got to start all over again.”
Leading Hispanic Dominant Market Areas, 1996
Source: Hispanic Business. Expenditures in millions of dollars. * Hispanic population
Hispanic Market Ad Spends, 1996
…..Network & national TV…..$380.3
Source: Hispanic Business.
Expenditures in millions of dollars
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