Hispanic cultural events such as Diez y Seis de Septiembre (Mexican Independence Day, Sept. 16) have long provided venues for promoting major brands to Hispanic consumers. But with the growth of Hispanic retailers and the need for more data on the demo, marketers are gravitating to more targeted promotions, particularly in-store efforts, to reach the group, industry executives said.
Omnicom Group's Dieste Harmel, a Dallas Hispanic agency, is the latest to enter the arena, preparing to open its new promotional unit, Spice, next week. The shop created Spice in an effort to extend its clients' reach to the retail floor, founding partner Warren Harmel said.
"We're seeing a pretty significant shift in spending toward promotion," said the 15-staffer unit's general manager, Bill Cashman, formerly Pizza Hut's director of Hispanic marketing. "Clients are asking, 'How can we get more legs with our product?' "
With the fact that promotional dollars can be more carefully targeted than those in event marketing, executives said, there's great potential in the budding medium. Promotional spending in the Hispanic market, including direct and loyalty marketing, grew by almost 10 percent in 2003 to $288 million, according to the Promotion Marketing Association. Hispanic advertising grew 14 percent from 2002 to $3.4 billion in 2003, according to Nielsen Monitor-Plus, while total U.S. ad spending grew 9 percent to $125 billion during that period.
"With promotion, you can begin with a budget of $100,000, whereas an ad budget of $100,000 won't buy you squat on TV," said Paul Castillo, managing director of PanaVista, the Hispanic promotions arm of independent Ryan Partnership in Dallas. "When we say promotion, it's strategic marketing at retail that moves cases. That's why we kind of believe the next [medium for Hispanic marketers] is the grocery-store floor or the drugstore floor."
Typically, clients trying to reach the Hispanic market devote about 20 percent of their budgets to promotion, 70 percent to traditional advertising and media, and 10 percent to trade expenses, Castillo said. Mainstream advertisers typically devote about 40 percent of their marketing budgets to promotion, he said.
The promotional side has few major players. In addition to PanaVista, which has been in business for six years, and Spice, the major shops include independents Mass Promotion in Miami, and Market Vision and PMG, both in San Antonio.
Dieste Harmel had handled its own event marketing, overseeing the Nokia-sponsored "Café Tacuba" tour showcasing top Latino bands this summer. The agency also handled marketing for singer Thalía's U.S. concert tour in the spring, which was sponsored by Hershey chocolate.
For Diez y Seis, PanaVista is doing in-store promotional work for Clamato, which is supported by Budweiser beer. Clamato juice, mixed with Budweiser, creates "red beer" or Micheladas, which are popular in Mexico, Castillo said.
"Promotion is all about movement," he said. "The good news is you can tell what the results were. The bad news is you can tell the results."