2011: The Year of Creative Destruction in Hispanic Marketing
(an edited version of this article originally ran on MediaPost’s Engage Hispanic blog on 1/6/2011)
I made the bold prediction almost a year ago today that Hispanic marketing was in for big changes in 2011. I have to admit I think I will be proven wrong.
I think 2011 will result in even more changes than I boldly forecast last year. In fact, I think by the time 2012 rolls around, we’re barely going to recognize the Hispanic marketing space that has seen tremendous growth (more people, more media companies, and more agencies) but changed very little since 2000. Here are my revised, emboldened predictions for Hispanic marketing in 2011:
Prediction #1 – The death of the Hispanic advertising agency
2010 was most definitely the year of the full-on assault on Hispanic advertising agencies (starting with the Home Depot controversy in April, Crispin Porter’s absorption of Burger King Hispanic in August, and the ANA Multicultural Conference controversy in September). 2011 will no doubt see a continued push by general market agencies into the Hispanic market. Not only will they continue this push by staffing up on Hispanic advertising talent, but also through acquisitions (I have firsthand knowledge of at least a few such acquisitions plans from some big ad agency players). Moreover, marketers, particularly those in “minority-majority” markets such as Los Angeles, will begin to follow El Pollo Loco’s lead and consolidate their Hispanic and General Market advertising accounts. Add in the fact that Hispanic ad agencies have been painfully slow in building digital capabilities (they’ve made a valiant “too little, too late” effort during the last 12-18 months), and the writing is on the wall – the start of a slow death for the Hispanic advertising agency model as we now know it.
Prediction #2 – Hispanic PR officially becomes Hispanic Social Media
2010 was also the year that Hispanic PR agencies took the plunge and fully embraced social media as the future of their industry. The success of the inaugural Hispanic PR & Social Media Conference and the LATISM Latino2 tour highlighted the coming of age of Hispanic social media. Hispanic bloggers and social media influencers are establishing themselves as the key centers of influence in the Hispanic community. This was coupled with the continued decline in Spanish print media (magazines and newspapers), which has started to feel the decline in readership resulting from consumer’s shift online and the recession. Looking ahead at 2011, I see a continued decline in Hispanic print coupled with an equally sharp rise in niche and “long-tail” Hispanic digital publishers (whether they are bloggers, Facebook influencers, or small Websites) – with what were formerly “Hispanic PR” agencies and professionals positioning themselves as the expert guides of this growing and increasingly prominent Hispanic social media space.
Prediction #3 – Digital leap-frogs “Hispanic”
During the boom years of Hispanic digital (2005-2008), the Hispanic digital media market looked a lot like the Hispanic traditional media landscape – a handful of prominent Spanish-language portals / mega-publishers that owned the market (e.g. Batanga.com, Univision.com, Terra.com, and Starmedia.com), surrounded by a lots of smaller upstart ad networks (e.g. Gorilla Nation, HispanoClick, Consorte Media) and a handful of general market publisher extensions into the Hispanic market (e.g. ESPNDeportes.com, CNNEspanol.com, etc.) that got the scraps. During the last 12-18 months, the Hispanic digital media market has fragmented, led by technology such as behavioral targeting, demand side platforms (DSPs) and ad networks with immense scale and reach. While the Univision.com’s and Terra.com’s of the Hispanic digital media market will not be going away anytime soon, their days as “market makers” are numbered. Looking ahead, as Hispanic digital media consumption becomes more social (Facebook) and personal (mobile), and mirrored Spanish Websites /microsites become a relic of the past (recent AOL research and Best Buy’s well chronicled experience shows that Hispanic consumers have come to view Spanish sites as inherently inferior to “main” English language sites), the Hispanic digital marketing space will be unlike anything veteran Hispanic marketers have grown accustomed to seeing in their analog Hispanic world.
Prediction #4 – The multicultural mainstream becomes a reality
Multicultural consumers already make up 35% of the entire U.S. population. Guess what will happen to that percentage when the 2010 Census numbers come out this spring? Welcome to the new “multicultural mainstream” – a new America where close to 40% of the overall population is multicultural (Hispanic, Black, Asian and multi-racial). DMA’s like Los Angeles, Dallas, Houston, Miami, Atlanta, and Washington, DC are already “minority majority” markets (Hispanics, Blacks and Asians combined make up more than 50% of the total population) – expect cities like New York and Chicago to join the list in 2011. This will only put more pressure on advertisers, particularly regional ones, to re-assess how they allocate marketing resources to ethnic groups like Hispanics. My theory is more of the “El Pollo Loco” phenomenon from Prediction #1 – as advertisers consolidate their Hispanic (and other multicultural marketing efforts) with their general market ad agencies.
Prediction #5 – The birth of the Hispanic Youth Market
The last few years have seen a steady increase in dialogue, events and attention among marketers about the Hispanic youth market (Hispanics under the age of 24). The statistics are already mind-boggling:
• In 13 years, 50% of Americans under 18 will be minorities (Source: U.S. Census Bureau)
• 80% are US-born (Source: University of California, San Francisco)
I predict that the 2010 Census figures regarding Hispanic Youth will be the most unexpected… and growing. Yet the Hispanic youth market represents a conundrum for Hispanic marketers – a growing market that increasingly identifies and shows pride in its Hispanic heritage but consumes very little Spanish-language media and sees the world through color-blind lenses. This will be the toughest nut to crack for marketers and advertising professionals of all stripes – general market, Hispanic, digital, direct response, social media and everything in between. Yet I see Hispanic youth as the biggest marketing opportunity to come out of 2011.
Think of 2011 as the year of creative destruction in Hispanic marketing – some things will die, a lot will change, and brand new opportunities will sprout from the ashes.
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Your Doom and Gloom views are so useful to our Industry. In full disclosure you should mention your involvement with the management team of Hispanic PR & Social Media Conference in Prediction #3.
So your thoughts are very self-serving Mr. Villa and tipical of toxic thought.
Gene Bryan / CEO HispanicAd.com
Hi Gene,
I completely understand and respect if you disagree with my opinion (you’re not the only one). In many ways, I hope I’m wrong about my predictions regarding Hispanic ad agencies’ future. I also feel it’s important that you know that I do not want the industry to “die” – I just feel that the trends are not positive at this point.
Although it may not have come across, I am still optimistic about the future of the industry – but I feel that Hispanic ad agencies need to transform themselves. How, exactly, I’m not sure (if I knew the future I wouldn’t be working and writing articles). Maybe they need to start pursuing general market opportunities. Maybe they need to acquire general market ad agencies. Maybe they need to expand from simply targeting Hispanics to include other multicultural audiences. However, the status quo won’t cut it in an environment like the one we’re in today.
The reason I titled my article “creative destruction” is that I feel that a new industry will sprout from what we now know as Hispanic advertising. Our industry needs to be open to what that new industry might be. I think the Hispanic youth market will be a big part of that rebirth.
As to your other point, I mentioned the Hispanic PR & Social Media and LATISM Latino2 conferences because I attended both those conferences in 2010 (our perspectives are inevitably shaped by our experiences, right?) and I feel they are indicative of a growing Hispanic social media industry (my point in mentioning them). While I wasn’t involved in planning the 2010 Hispanic PR & Social Media conference, I was invited to serve as Vice-Chair of the 2011 conference, a non-paid advisory position I am fully transparent about.
Lastly, you say my article is self-serving. To a certain extent that is true. I have strong opinions about the multicultural advertising industry that guide how I run my ad agency (Sensis) – which is a for-profit enterprise. However, I have always been very sensitive to avoid self-promotion in every article and blog post I write (including this one). My goal is to provide fodder for enlivened debate and spur dialogue – ultimately improving our industry for everyone.
I am sorry you feel my opinions are toxic. That is truly not my intention.
-Jose
Gene, defending the status quo is not a solution. Seriously.
Folks love attacking everyone who is trying to figure out a new way to play the game. Remember Gene, if you stay still, you die. In this, or any other industry.
I hope your predictions don’t all come true, but I applaud your intentions Jose!
Great article!
Great article Jose. When I started in the Hispanic advertising industry, Mr. Rafael Conill, one of the Hispanic advertising pioneers told me that once Hispanic advertising becomes a lucrative business most Hispanic agencies would be acquired by large general market agencies. He was a great visionary and his predictions are becoming a reality. It is up to us in the industry to transform ourselves and adapt to market changes. I am an advocate of a “total market” approach where advertisers tackle the market based on its characteristics rather than dividing into general market, AA, Hispanic, Asian, etc. I believe that will be far more efficient and will eliminate the constant struggle for budgets between general market and multicultural shops.
Jose:
You are dead on, this is a great post. Many of the same points apply to Black agencies too. The general market shops have won the game. The era of minority owned-minority targeted agencies is pretty much over. Now it will be interesting to see if some pretty good hybrid shops like yours get more play. Good luck.
Spot on Jose! Evolution is inevitable and the fact that Hispanic agencies have remained stagnant expecting bigger investments based solely on climbing stats is dangerous… “Salsa is outselling ketchup” is not cutting it anymore? [HE GENUFLECTS AND PRAYS TO THE US CENSUS DEITY OF 2010 FOR ANOTHER KILLER, SHOCKING STATISTIC]
Have you all read the great article in Fast Company about the Future of Advertising (http://www.fastcompany.com/magazine/151/mayhem-on-madison-avenue.html) The truth is that Hispanic ad agencies are suffering from a lack of digital outlook at much more severe levels than general market agencies… Could it be lack of investment, fear of stepping away from million dollar tv commercial, lower churn among Hispanic ad elites leading to a stagnation in thought leadership…
Ironically, the Hispanic market is a market that thrives on the evolution of technology and digital communication as a means of connection with everyone and everything dear to them that they cannot get from traditional media.
As for the claim of being self-serving, I just find that funny… As I write this comment you can even see the Sensis logo at the bottom and that the format is a blog… hmm… sometimes you have to laugh and wonder…
Thanks for pushing the button!
Jose, you hit the nail on the head. Thanks for having the courage to speak the truth even though some of the old folks don’t like to hear it. I’ve been watching this trend for a few years and this is the first time someone with your clout has the guts to put it in writing. Toxic? No, REALITY…. and those who don’t get it will not be part of the new world.
Nice overview, if lacking in specific solutions. Here’s some
thoughts:
#1, #4 – inevitable and value-neutral — nothing to do here.
#2, #5 – Will be taken advantage of by mobile-first methodologies. Design & Develop for the lowest end technologies/mediums first, and progressively enhance to give a unified experience on all platforms.
#3 – Don’t build a alternate language site. Add multi-lingual content capabilities to your existing website, and spruce that up while you’re at it. Provide one, identical, multi-cultural-aware experience to all users. Text is just text; it can be delivered to users in their preferred experience without any degradation of the functionality/usability of a website.
While I agree there has been and will continue to be an evolution of the Hispanic advertising space I don’t know that we’ll see the death of the Hispanic agency. Two reasons. The first, something you don’t touch on in your predictions, I suspect we’ll see a surge in the next few years with Hispanic-focused products & services. While institutional brands such as Coca-Cola and Home Depot want global we can’t forget everything still starts local. Managers of big brands are obviously frustrated as echoed by Pam at last year’s ANA conference, but if I was a brand manager of Jarritos I don’t know that McCann Erickson would be the right shop for me. And with the growing population and buying power local won’t have to mean small budgets. Two: While its true there are often ‘universal truths’ that cut across any demographic (e.g. a mom is a mom no matter what) there will always be tremendous power in messages that are unique and powerful to that audience. As agency’s consolidate and brand’s look for the one message, the great insights and ideas relevant to one audience will inevitably get left on some strategic planner’s or creative’s hard drive. I think for some brands it may work, but for many it will not. I hate to see brands figure that out the hard way and leave great ideas on the table.
I will say however that in the coming years, with the enhancements in technology, advertising will inevitably focus more on where & when versus who. Mobile will certainly lead the way here. In this respect we’ll also see a shift back to more DR related efforts versus brand efforts. Check in and get 20% off versus shop here because you’re latino and we get you makes a lot more sense.
Thanks for the article and thoughts.
[...] you’ve read any of my articles the last few years, I’ve been making the case that the Hispanic ad business is heading for radical change – driven by the growth and mainstreaming of the Hispanic population (“50 million is too big to [...]
[...] you’ve read any of my articles the last few years, I’ve been making the case that the Hispanic ad business is heading for radical change – driven by the growth and mainstreaming of the Hispanic population (“50 million is too big to [...]