Hispanics represent the fastest growing population segment in the country, a huge and growing buying power, with an undeniable over-indexing of numbers in multiple categories. The power and magnitude of this group makes success in any field requiring consumer support virtually impossible if not engaged appropriately. Yet, while the need to market to Hispanics increases the appeal for Hispanic marketing agencies is declining.

This is the overarching contradiction of an industry whose code we have not yet been able to crack. Hispanic marketing agencies in their majority have been constantly, and often unsuccessfully, trying to find a way into the bigger pockets of brand marketers. There are of course exceptions to this where the investment, level of ideas and talent are commensurate with the needs of the market, and those are the few success examples we have seen in the past years.

Brands that are winning are those leading with multicultural strategies given the increasing importance of multicultural segments for their business. Yet there are some Hispanic agencies that are still sitting on the sidelines of major marketing strategies. I have seen a lot of contradictions in my 15+ years in the Hispanic marketing world, and I believe that these have led to the fragile situation of Hispanic agencies today.

Among the many contradictions, I believe these to be the Top Five that are stunting the growth of the Hispanic marketing industry and potentially the growth of their clients.

The underpaid best-in-class specialized talent: A Hispanic copywriter is no different than a mainstream agency copywriter in terms of basic skills. The only difference is that the Hispanic one has an added skill, which is an expertise in a particular segment. This is so unique to this industry. Specialized doctors make more money, and this is true in many industries. Hispanic advertising professionals are required to have all the skills of a mainstream advertising professional plus the expertise of a niche segment. I have always seen this as an advantage but it has been tough to justify this to clients. There is an expectation that Hispanic agencies deserve smaller budgets. As a consequence, specialized talent gets paid less. Often they turn to mainstream agencies for more equal pay, even if this means walking away from their specialty.

The big-impact, low-budget campaign: Enough has been said about budgets and anybody that has touched this industry in one way or another knows that Hispanic budgets are the first ones to be cut when times are tough. And times are always tough. The expectation is, however, that small budgets deliver big results. Hispanic agencies are evaluated under the same microscope as mainstream agencies, yet the conditions are not the same. In many cases, when the smaller budgets do not deliver the big results, these budgets are cut completely, losing all communication with consumers and breaking a relationship that was being built with them. This is due to a misconception that a smaller segment requires smaller efforts. A Facebook ad costs the same regardless of who you are targeting. Why should Hispanic agencies be expected to do more with less?

The integrated targeted campaign: In most cases, Hispanic agencies are asked to “Hispanicize” already existing campaigns for the sake of integration. This is a formula for failure. Campaigns should be thought of as integrated from the get-go, and they should be inclusive of all segments, given the composition of the US market today. When a Hispanic agency receives a campaign concept, they are asked to find an insight that can lead to targeted executions under a pre-existing box that might not be strategically relevant to the Hispanic consumer, regardless of what insight the agency discovers. For a campaign to be targeted within an overall strategy, it needs to be thought through in an integrated way from its inception.

The multi-media TV-focused campaign: Marketers need to stop thinking that Spanish media, and particularly TV, is the way to reach this consumer. Campaigns need to be as diverse in their media outreach as consumers are in their everyday lives. This segment is multifaceted. So should media choices be to communicate with them. Only through a deep understanding of who this consumer is today, along with more sophisticated and diverse media plans will brands be able to truly engage in a meaningful conversation in the right place with Hispanic consumers.

The traditional approach to an ever-changing demographic: The Hispanic market is still covered in stereotypes. Client approvals are often the result of a lack of understanding of deep insights about the segment. Thus, executions default to the expected and antiquated norms no longer relevant to today’s consumer. Most marketers still fail to deeply understand the behaviors that drive the Hispanic consumer today. Marketers need to be culturally invested and immersed in this demographic. To do so they need to hire talent that lives and breathes and represents the group’s present and future.

The main reason why Hispanic agencies are still standing is because they are not and have never been in the spotlight. When the Hispanic market is not your priority, your Hispanic agency isn’t either. This has been a blessing in disguise for Hispanic agencies. Not too much budget equates to not too much attention. This has driven the industry to a stagnant area full of conformism.

The Hispanic agency world needs to reinvent itself pronto. Less delayed reaction to changing consumer behaviors and more anticipation of the real client needs to get to this consumer. Become an insider versus remaining an observer. I have the feeling that while Hispanic agencies are dressing up and getting ready for the party, many of their clients are already at the party flirting and dancing around with non-Hispanic agencies.

If Hispanic agencies want to be part of the conversation, they need to stop talking to themselves and push their chair to the main table to participate in the conversation. Nobody will do this for them. Clients, in turn, need to make room for them. Agencies need to move outside of their comfort zone and lead the change with forward-thinking, unapologetic ideas that can transform the market to meet the new consumer needs. The only way this industry can be saved is by stepping out of what it is today and reinventing itself with the current landscape in mind instead of holding on to outdated standards that are making it obsolete.

Maybe what has always been feared as the decline of the Hispanic marketing industry is actually an opportunity for a revalorization. This will only come in the form of more diverse representation in mainstream agencies, an increase in integration of better insights about Hispanics into bigger marketing strategies and the capacity of cultural infusion into general ideas – something Hispanic consumers are doing in their everyday life and that has changed this country forever.

Eight comments and replies

1. Stu Klein from Interpublic, May 27, 2016 at 8:59 a.m.

Excellent points, but I would add a sixth, which is the difficulty in accurately measuring the impact of a Hispanic campaign. There are others with far more experise on this topic than me, but it appears that given the increasing acculturation of the Hispanic population coupled with the increasing fragmentation of media overall, the ability to precisely measure a campaign in the traditional test/control format is increasingly difficult. With more precise measurement tools, I believe additional funding for Hispanic efforts would be easier to secure, remedying many of the issues you’ve cited.

Reply

2. Luciana Gomez from Luciana Gomez Marketing Consulting replied, May 27, 2016 at 8:21 p.m.

Thank you, Stu. You are right. Measurement has always been a hurdle for the progress of this market. Years ago, we did not have proper data to track our efforts. Now that we do, the blurred lines between segments that you point out make it difficult to attribute success to specific initiatives. Maybe it is time we rethink the way we see the market and focus on collaboration toward the same common goal vs. fighting for shrinking budgets.

1. Tony Stanol from Global Recruiters of Calabasas, May 27, 2016 at 9:22 a.m.

Quite right. Sad, too. It’s like there’s a hidden but active prejudice.

This link covers the Dirty Little Secrets:

The Dirty Little Secrets in the Hispanic Advertising World

Reply

4. Luciana Gomez from Luciana Gomez Marketing Consulting replied, May 27, 2016 at 8:24 p.m.

Dirty secrets indeed. I am confident we can change this though. It is entirely up to us. Thanks for your feedback, Tony.

1. Oscar Allain from PrizeLogic, May 27, 2016 at 11:05 a.m.

This is fact. Even more prevalent (and evident) in cases where the ‘Big’ mainstream agency has a Hispanic marketing team. Here the double standard often forces the ‘specialized talent’ to do double the amount of work (compared to their GM counterparts) for half the rewards. Not anyone’s fault, as the client’s are the ones paying the bills. But certainly a discouraging fact.

There is an expectation that Hispanic agencies deserve smaller budgets. As a consequence, specialized talent gets paid less. Often they turn to mainstream agencies for more equal pay, even if this means walking away from their specialty.”

Reply

6. Luciana Gomez from Luciana Gomez Marketing Consulting replied, May 27, 2016 at 8:27 p.m.

Very true, Oscar. I agree. Specialized talent is still under-estimated, whether they are an independent Hispanic agency or part of a group. This needs to change. Thanks for your feedback.

1. Anna Christina S. from Freelance Designer, May 27, 2016 at 3:58 p.m.

The Hispanic agencies did this to themselves. They made themselves obsolete.

Brands have been asking for campaigns for Latin@s living in America, and insight into that audience. Sometimes those consumers speak Spanish, sometimes they don’t.

The Hispanic agencies have been giving them account managers and strategists and creatives fresh from Portugal or Spain or South America who haven’t spent any time living in the US. They don’t speak much English, and their point of view is pointed towards Europe, not the USA.

The work, the talent and the messaging coming out of Hispanic agencies these days looks like it belongs in Madrid, not Chicago or Houston or Miami.

Reply

8. Luciana Gomez from Luciana Gomez Marketing Consulting replied, May 27, 2016 at 8:30 p.m.

Thanks for your feedback, Anna. Yes. For a long time, it was thought that what defined this market was language. If you speak Spanish, you can do Hispanic work. It takes time to truly understand this segment and the approach needs to be unique.

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After a much-heralded launch in late 2014, Commonground/MGS abruptly closed down last week, putting some 300 employees out on the street.

It came as a shock.

A merger that included MGSCOMM and the Vidal Partnership, two big names in Hispanic media, Commonground/MGS was ranked the sixth-largest Latino agency in billings. It came just months after one of the best-known Latino agencies, Bromley Communications, shuttered after 34 years.

And so the talk began: The bells are tolling for Hispanic ad agencies.

That’s simply not true. Quite the opposite.

If a trio of your neighbors kick the bucket, you can’t rationally claim everyone you know will perish.

Here is what is happening. Hispanic media is going through huge changes as it joins the ranks of mainstream media.

As it does so, the role of the Hispanic agency is changing as well—and for the good.

Some background: For most of the U.S. Hispanic market’s 50-year history, Hispanic agencies existed alongside general market agencies on a separate but equal basis. Spanish-language media – whether print, radio or TV – needed Spanish-language ad agencies to create copy. They also bought the media. General market agencies had neither the desire nor the staff to do either.

But much as desegregation brought the entire mosaic of American children together in classrooms, the total market movement in media—the idea of advertising reaching out to all sectors of society—has desegregated American marketing.

Latinos have entered the mainstream – and so has Hispanic media, snapping up larger and larger shares of clients’ ad budgets.

One outcome is that much of the buying of Hispanic media has now moved to the global advertising holding companies–WPP, Omnicom, Publicis, Interpublic, Dentsu-Aegis, etc.

That only makes sense. Media has become a commodity buy, and these giants have invested princely sums to create efficient media buying and planning machines. To maximize profits, these worldwide networks set out to court and win clients’ Spanish-language media budgets.

True, the loss of media buying has been tough on independent Hispanic shops, but it’s been good overall for the state of multicultural advertising. Reaching Hispanics is no longer an afterthought but an essential part of every marketing mix.

What it’s left Hispanic agencies is a role they’re particularly good at: creative.

And creative can never be commoditized.

Alex López Negrete, founder of the agency bearing his name, talks about the “secret handshake.”

The secret handshake is a sense of the Hispanic consumer that’s crucial for crafting smart ad copy, and it comes from understanding the cultural, linguistic and generational nuances that connect with Hispanic consumers, whether the target message is in Spanish or English.

The secret handshake is the not so secret weapon of successful Hispanic agencies. It belongs to them. It is their calling.

For evidence of the vibrancy of Hispanic advertising, look no further than the great year the industry had at the Cannes Lions International Festival of Creativity. Seven agencies took home 18 awards, including a Grand Prix for Miami-based agency The Community. D exposito & Partners was honored as Agency of the Year by the Advertising Education Foundation, the first Latino shop to receive the award.

This past fall the Smithsonian Museum honored the legacy of Hispanic advertising, inducting into its archives campaigns and artifacts from Zubi Advertising, Dieste, López Negrete and Orcí.

Yes, Commonground/MGS may have closed and Bromley is no more, but Hispanic agencies are more vibrant than ever, their creative more in demand than ever.

So the sounds you hear are bells ringing in celebration, not mourning, as U.S. Hispanic advertising ushers in a new golden age.

Court Stroud is a writer and a longtime media executive who has worked for companies such as Univision, Telemundo and several digital startups. He most recently served as Azteca America’s EVP of network sales and digital. Stroud holds degrees from UT-Austin and the Harvard Business School. Follow him on Twitter: @CourtStroudNYC