Mas Appeal Mañana Means Now For Hispanic Shops By Jack Feuer Illustration

By Jack Feuer Illustration By Fran O'NeillHispanic advertising agencies and Spanish-language media have existed in the U.S. for some time—the agencies for 30 years, the media, in some cases, for hundreds of years. For at least the past two decades, true believers have prophesized the coming of an Hispanic Age in American marketing. Certainly, there has been steady growth in the category in the past 20 years, but the predicted explosion of influence and ad spending never came. Until now."There are 32 million [U.S.] Hispanics, representing about 12 percent of the country, and by 2050, there will be 100 million, or 25 percent," says Peter Chrisanthopoulos, former president of national broadcasting and programming at MindShare USA, who left last month to join fledgling Spanish network Azteca America, New York, as president and COO. "This year, Hispanics are expected to spend roughly $430 billion, and that figure is projected to be $950 billion in 10 years." Spanish-language media are enjoying a fiesta of accomplishment. The top-rated radio stations in New York and Los Angeles are Spanish. People publishes en espanol. There will soon be three national U.S. Spanish-language TV networks. And in the general market, Latin culture, particularly in entertainment, is front-page news.For Hispanic marketing, mañana may finally be here. And with it, come changes in the way Hispanic media is planned and purchased as dramatic as those that have so vividly impacted the general market. Just as they have in the general market, transformative variables, such as fragmentation and a rapidly changing consumer, are all affecting the Hispanic market.Consolidation on the seller side has always existed in the Hispanic marketplace. There weren't many media options to begin with, and what existed was controlled by a few. But buyer-side consolidation is now taking place—as the ranks of independent Hispanic agencies steadily dwindles. Today, even the most conventional marketing and media plans include an Hispanic component, and the general-market giants are all building, acquiring or expanding their in-house units. Unbundling, however, has not hit the Hispanic market with anywhere near the hurricane force of its impact on the mainstream."For the shops that have traditionally competed for Hispanic dollars, the full-service Hispanic agencies, the cost of becoming a media specialist has by and large been prohibitive," says Monica Gadsby, senior vice president, director of Hispanic media for Starcom Worldwide in Chicago, who launched what was then Leo Burnett's Hispanic in-house capability 14 years ago. It now handles $125 million in billings from clients such as Kellogg's, General Motors, Miller Brewing, Nintendo and Disney. "What makes a media specialist stand out is a true commitment to media tools, research and systems. It's a very expensive game. But as more new-business briefs come out with Hispanic components, the general-market media specialists will see it's something they need to do."Apart from Starcom, Initiative Media, Carat and Horizon have or have announced plans to add in-house Hispanic units. The mainstream full-service agencies, conversely, often opt to acquire independent full-service Hispanic ad agencies. McCann-Erickson, FCB Worldwide and Young & Rubicam, among others, have gone that route.Part of the absorption of Hispanic media into the mainstream is client-driven. "In all of our new-business pitches at MindShare, multicultural was a segment of our presentation because it was part of what clients needed and wanted to know about our capabilities," Chrisanthopoulos notes.But profit potential also fuels the movement. As with the media function in the general market, Hispanic marketing has had a service-area-to-revenue-source makeover. The general-market giants don't just offer Hispanic work as a specialty, they expect their in-house units to make money and win business. "It's no longer just a response to a client need," says Rosa Serrano, senior vice president/group account director at Initiative Media North America in Los Angeles, which handles $100 million in Hispanic billings and has done Hispanic media planning and buying since 1984. "Now, it's let's get out there and target Hispanic business. The attitude has gone from, 'Well, it's just a couple of million dollars' to 'Hey, that's a couple of million dollars we don't want to see go away.' "All of these new and revamped players are still working with relatively small budgets. Hispanic media takes in less than $2 billion of the $200 billion-plus in annual U.S. ad spending, and $30 million in capitalized billings puts a Latino shop, or a unit of a mainstream agency, in the top tier of Hispanic agencies. With so much of its population concentrated in a few geographic areas (Los Angeles, New York, Chicago, Miami, Houston, while Texas metro areas alone deliver one-third of the Hispanic population in the U.S.), buys don't have to go very deep to cover the market.Hispanic media's disproportionately small share of the spending pool, in fact, is arguably the most frequent complaint heard from Hispanic media and marketing executives. But that obstacle, as well, is likely to fall, or at least be significantly mitigated, in the face of an influx of new media options. At any rate, spending in the Latino market is increasing by double digits every year.Hispanic media planners and buyers do share the challenge of fragmentation. In 1980, there was one national Spanish-language TV network, no cable networks, 21 local TV stations, 190 radio stations, 100 newspapers and 15 magazines. Today, there are at least three national broadcast networks, eight cable networks, more than 75 TV stations, more than 400 radio stations, in excess of 155 newspapers and over 50 magazines. Plus, a growing number of English or bilingual media targeting U.S. Latinos, such as SiTV and Galavision on the TV side, bilingual radio in New York, Houston and other markets, and magazines such as Latingirl and Vista, among others.The Internet adds to the increasing fragmentation of the Hispanic media marketplace. Three years ago, marketing resource The National Hispanic Media Directory contained no e-mail or Web site addresses. Today, there are hundreds.Bravo Group, the Y&R unit that commands an estimated $200 million in Hispanic billings from clients such as Sears, Orchard Supply Hardware and Glaxo-Wellcome, has created Bravo 2.1, an interactive unit dedicated to the Latino market. "I get very anxious now," says Leon Potasinski, senior vice president/media director at La Agencia de Orc & Asociados, the pioneering independent Hispanic shop in Los Angeles that claims billings of just under $70 million from American Honda, Verizon, Washington Mutual and Allstate, among others. "There's so much more to keep track of: numbers, outlets and much more research."There are also new differences in the target market itself, not just cultural differences between Mexicans, Cubans, Puerto Ricans, et al., but in language and media usage. According to Nielsen figures, about 87 percent of the nation's Hispanics 18 and over speak Spanish, but many are comfortable in English, too. Sixteen percent describe themselves as bilingual, and one-third report speaking mostly or only English. For Hispanic media planners and buyers, this has introduced a novel idea: using English to reach Hispanics, and in some cases, Spanish ads in English-language media."When this market was created 30 years ago, they were selling Spanish only," agrees Octavio Nuiry, president and CEO of ON Marketing in Long Beach, Calif., and co-author of The National Hispanic Media Directory. "That's how the segment was pitched to advertisers by Hispanic agencies and media. There was no bilingual or English-dominant Hispanic. But those two areas are growing, and it makes planning a little more difficult when you add language usage into the mix: Is Maria Spanish-dominant, bilingual or English-dominant? Is she watching The Young and the Restless or Spanish novellas on Telemundo?"This planning wrinkle is most apparent in campaigns targeting younger, more acculturated Hispanics (14 percent of the U.S. teen demographic is Hispanic) and in the rapidly increasing number of English-language, Hispanic-targeted magazines, where English editorial is routinely accompanied by both English and Spanish-language ads. The tactic is also used in urban radio, where a high concentration of young Hispanic listeners also makes mixed-language advertising viable."Language has always been at the core of our strategic thinking," says Meg Bernot-Rodriguez, senior vice president/managing partner at Bravo in New York. "It is the root of what we do, and why we exist as an industry. The majority of early advertisers in Hispanic media were clients whose target consumers were Hispanic adults who happened to be heavy users of Spanish-language media. [But] today, we are starting to see a more diverse group of clients who are talking to a more diverse type of Hispanic. For example, we have a specialty capability called Bravo Lateen-o that helps advertisers leverage the growing Hispanic youth market. Many teens feel that speaking to them in both languages reflects the reality of the world they live in."Inevitably, the introduction of English into a U.S. Hispanic media plan raises turf questions. With an English element, "You now have to have separate creative, of course," notes Potasinski. "Then, you need more budget, and maybe it's the general-market agency that should fork over that money. So we get into that little arena."Still, with all the changes and perhaps because of its increased importance, Hispanic media is likely to remain Spanish-dominant.""I go back to the idea that you can reach 70 percent of Latinos in English," explains Hector Orci, co-founder and co-chairman of La Agencia. "It may be inefficient, but they're there. But effectiveness is when a communication comes on they don't turn off. [English-language advertising] tends to be irrelevant to Latinos. You can reach me with your regular stuff or you can try to isolate me and reach me as a Latino—in Spanish."If the trends continue, however, the general market may become less English."In many ways, Hispanic media was easier when you had two universes, the mainstream and the Spanish world," concludes Serrano. "That isn't the case now. It's integrated. It's one world."

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Mas Appeal Mañana Means Now For Hispanic Shops By Jack Feuer Illustration

Fran O'neill

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