Think Multicultural

Or says the CEO of Razorfish in this week’s Advertising Age. Yes, Advertising Age, not MediaPost or MarketingVOX.

For those who follow my rants and raves, this type of proclamation is commonplace. Yet, to hear it in arguably the most important advertising trade publication is a whole other story.

In this week’s AdAge, Rupal Parekh and Abbey Klaassen cover what some see as a growing trend - interactive agencies, such as Tribal DDB and AKQA, being selected as Agency of Record for serious brands like McAfee and the National Tourist Office of Britain.

While the article is careful to note that this trend is happening on the fringes driven by brands with significant e-commerce channels, whose identify and proposition live on the Web, or are very youth-focused, they make the case that digital agencies have significant advantages over their traditional counterparts. These advantages, including proximity to the consumer and the ability to understand and leverage the rich data of Web marketing, bodes well for the speeding up of this trend.

There are two other trends that I see only speeding up the trend toward lead digital agencies:
1. The digitization of traditional media (e.g. TV going digital, digital outdoor, and digital radio)
2. Shifting consumer media consumption patterns towards digital.

if the brand’s identity and proposition live in the digital space, if a product involves a complex sale where online research is a big component, or if it’s a very youth-focused marketer going after a demographic that lives largely in the digital space

NPR’s Morning Edition had a segment this morning on the fact that KMEX in Los Angeles is the most watched local television station in America and that Univision is competing with the big four networks, while still keeping ad costs lower.

I’ll post a link to the story as soon as it’s ready.

In this last installment of my three-part look at the U.S. Hispanic market in an economic downturn, I will focus on the Hispanic business market, particularly Hispanic small businesses.

First, some data to understand the market:
- Hispanic Business magazine’s HispanTelligence estimates there are 2.2 million Hispanic-owned businesses generating close to $388.7 billion in revenues this year.
- This has been a rapidly growing market, with a CAGR of 9.1% over the last 5 years (Source: HispanTelligence)
- Over the next 7 years, Hispanic-owned businesses will be the fastest-growing component of the business market in the U.S., and their rate of growth is projected to be almost three times that of overall U.S. firms (Source: Latino-Business Barometer United States, 2005, RDA Global).
- By 2010, there are expected to be 3.2 million Hispanic firms generating $465 billion in revenues (Source: U.S. Small Business Administration, HispanicTelligence)

Furthermore, research indicates that among minority groups Hispanics are the most likely to start their own business (Source: SMOBE, SBO, U.S. Census).

Aside from all of the aforementioned positive projections that were made before the recent slowdown in the economy, the Hispanic business market has some intrinsic fundamentals favoring a positive outlook, even in a contracting economy, including the following:
- Many Hispanic businesses cater to the Hispanic consumer market, which is growing (see my previous post) and will weather the current slow-down relatively well
- While many Hispanic Business are in industries that are being hit hard by the slowdown (retail, construction), many are in growth industries – including health care, accommodation and food services, professional services, and admin and support services
- The growth and increased emphasis on supplier diversity (find out more about supplier diversity) by large U.S. corporations in all industries and the government sector will insulate many Hispanic businesses from reduced budgets and contracting opportunities
- Most importantly, a continued growth in the population, an increasing number of 2nd generation Hispanics, coupled with an overall trend towards starting new businesses, will keep positive pressure on the number of new Hispanic-owned companies started, even in a slower economy.

I am very bullish about this segment of the U.S. economy during the next 2 years. Entrepreneurs and the small businesses they start and run are the most nimble, flexible and adaptive areas of our economy - they adjust the best to changing market conditions - and this holds true for their Hispanic brethren. The Hispanic population is exploding, and a direct by-product of this population growth is a rapid growth in the Hispanic business community, comprised of new and established Hispanic-owned businesses.