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Hispanic Shops Confront Future of Media Buying

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Unlike the general market, where unbundling has become the norm during the past decade, the U.S. Hispanic market has been slow to separate media buying from creative. Now, though, the competition for Spanish- language buying is starting to heat up as a major media-agency player enters the $3 billion segment. At stake is market share in the fastest-growing population and media categories in the U.S.

"We obviously were looking for a solution to this growing market, and we needed instant credibility," said OMD North America chief executive Page Thompson about OMD Latino, its new union with sibling Omnicom Group Hispanic shop del Rivero Messianu. The new Hispanic media shop launches with a staff of 12, and will plan and buy for clients such as State Farm, Exxon- Mobil, HBO and McDonald's (which both partners already share). Thompson estimated the new entity would command more than $250 million in billings, making it one of the top three or four Hispanic media buyers in the country.

OMD Latino is the second media specialist to be launched so far this year, joining Viva Media, spun off in January from independent Hispanic shop Viva Partnership, and Omnicom is the third advertising holding company to enter the fray. Both Publicis Groupe and Havas have had Spanish-language media specialists since 2001.

Publicis multicultural buying shop Tapestry, based in Chicago, has increased billings by 20 percent since it launched two years ago, and now claims $400 million in billings from clients such as Kraft, Walt Disney, Best Buy, Hanes, Miller, Americatel and ESPN Deportes. Havas' MPG has MPG Diversity, which was created in 2001 with $1 million in billings from one client—Reckitt Benckiser—and two staffers. It now has 12 clients, including Intel and Volkswagen, and an estimated $60 million- plus in billings.

Barcelona, Spain-based MPG, moreover, hopes to use its Hispanic presence to leverage growth in the U.S. general market. MPG Diversity evp, managing director Jorge Percovich said the main difference between MPG Diversity and bundled Hispanic agencies is that "one is integrated with the English market, and the others are not." Percovich pointed out that Hispanics are largely bilingual and are consuming general-market media along with Hispanic, and the mix is important in reaching consumers. (Nielsen Media Research estimates show that 75 percent of Hispanics watch both Spanish and English television.)

The three holding company-owned shops tout the breadth and depth of their big- network resources as an advantage. But their peers have chosen a different business model.

Initiative has kept its Hispanic division in-house because "ethnic segments don't exist autonomously" from the general market, said Carolyn Bivens, Initiative North America president and COO.

WPP Group's New York-based Bravo Group—with $270 million in billings—has kept creative and media buying under one roof. "I don't know what OMD's motivation is," said Isabella Sanchez, vp/media director for Bravo's Miami office. "To me, it seems like a big disconnect, because there's so much that is unique about Hispanic planning and buying."

Many Hispanic shops agree. Early in 2003, Publicis' Bromley Communications pulled media duties out of Tapestry. "I think that general-market agencies think they can do Hispanic just like they think they can do African American, and the irony is if they could have done it, they would have already been doing it," said Jessica Pantanini, vp, managing director of Bromley's internal media unit, Interlink.

With such growth potential, the Hispanic-media-agency category is bound to get more crowded. The Census Bureau found that the U.S. Hispanic population exploded by more than 60 percent between 1990 and 2003 and now exceeds 35 million. And the Association of Hispanic Advertising Agencies estimates that expenditures in Spanish media grew by an average of 17 percent in the past five years, with no signs of slowing down.