Hispanic Advertising Agencies are Experiencing a Swing of the Pendulum

Hispanic marketing follows a pendulum pattern. Back in 2000, when Hispanics became the largest minority, there was a boom. And that boom consisted of Hispanic advertising agencies. So the pendulum swung to the left favoring Hispanic agencies. GM agencies did not care too much and often argued that the market was not really worth chasing. Now, 10 years later, money is tight, and companies are looking to consolidate their efforts to supposedly save money. So the pendulum is swinging to the right favoring GM agencies.

But this is a farce. When has a GM agency ever cost less than a Hispanic agency? When have you heard of a GM agency having fewer employees than a Hispanic shop? See where I’m going? There is no real savings. GM shops cost more. Adding a Hispanic arm to it won’t change the rate? Will it? Anyone?

Do GM agencies know Hispanic media habits or consumption? I don’t really think so. I recently put together a plan to reach Hispanics in Northern California, collaborating with a GM shop. It became very clear that they did not understand that Hispanics consume media differently. They wanted us to move 10% of the early morning news and fringe media mix to primetime to make the plan have “high-reach premium programming.” Does that make sense to anyone else? We had to explain that the early news and fringe are #1 rated news programs in either English or Spanish. There is a huge learning curve in understanding Hispanics. You can’t just boilerplate a GM plan to effectively reach Hispanics.

GM agencies may know numbers: Hispanics are the fasting growing segment, Hispanics have the highest birth rates, or that there is a digital divide between acculturated Hispanics and first generation Hispanics. But do they understand Hispanics? Do they understand that there is more to Hispanics than age, language, cultural heritage, or economic situation? Have they really lived with a Latino and seen the struggle of trying to make it in the US? Sat down to have a Modelo Especial after a fútbol game? Or sang a Juan Gabriel song on the front of your porch on a sunny afternoon? There is a difference between knowledge and understanding.

It is true that Multicultural Agencies are losing ground to their GM counter parts; just look how Home Depot hired a GM agency to reach Hispanics. But does this mean that the GM agencies will deliver efficiencies of scale or provide better results in reaching Hispanics–probably not. It really means that the GM agencies have finally caught-on to the shifting demographics in the US population and they don’t want to lose that potential revenue. I feel bad for companies that think they will find efficiencies in consolidating, but I am sure it will help the pendulum swing back to the left favoring Hispanic agencies again.


Fausto Gortaire
Account Director
HeadQuarters Advertising Inc.

My Baby Counts

Two months ago I filled out the 2010 Census forms for my household. Today, I received a call from the Census Bureau to verify or confirm the information submitted. The call was quick and the questions were easy. And at first glance the process seemed simple and painless until I mentioned my unborn child; due to be born this July.

Apparently, since my baby will be born in July–three and a half months after April 1, 2010–she does NOT count for the 2010 Census. Yet, in April, my wife was 27 weeks into her pregnancy, allowing my baby to be considered a human by most legal standards. So why doesn't my baby count? And if my baby does not count, how many other Hispanic babies are not being counted?

According to the BabyCenter.com, over 4 MM babies are born each year. The site states that most babies are born during the summer months, coinciding with summer vacation. Since 25% of all newborns are Hispanic, there will be about 1 MM Hispanic babies born this year. If they are born after April 1, 2010, they will not count either.

In essence, the census is not counting close to a million Hispanics. To put it in perspective, a million uncounted babies surpasses the total population of Wyoming, Vermont, North Dakota or Alaska. Imaging not counting an entire state? Imaging if that state did not get the resources they needed from the government to succeed. It would be disastrous. That state would not receive things like new roads, bridges, schools, and services like job training centers needed to thrive.

Just like the million unborn Hispanics, my unborn child counts. The $4 trillion that will be distributed over the next 10 years must to account for the children being born this year or face the challenge of building communities with insufficient funds.

Fausto Gortaire
Account Director
HeadQuarters Advertising Inc.

Response to an Article About MLS and the World Cup

This is a response to an article I just read on Ad Age. The article talks about how the MLS hired Dentsu America to help generate awareness of the MLS during the World Cup. Excuse me if this post sounds a bit abrasive, but I am so tired of the MLS treating the sport I love, fútbol, like all the other American sports.

I do agree that advertising for the MLS during the World Cup and taking a 2-week hiatus is a smart strategy for the MLS. But I question its sustainability. What will happen after the two weeks when the games get really good? Come June 26, after the Group Stage, viewership of the World Cup will definitely skyrocket, right as MLS's hiatus is over. Will viewers remember MLS or the games? The strategy seems more like temporary hype than a solid brand building strategy.

In order to reach critical mass with 90%+ attendance, MLS needs to stop treating fútbol like the rest of the sports in this country–where the fans are spectators who have either never played or stopped playing the sport after high school; where fans take a seventh-inning stretch after sitting for an hour and a half; where the fans that are sitting down yell at you for standing; where there is a pause after every minute of the game; where one player can carry an entire team… this is not fútbol–it’s soccer. And we all know soccer will never gain momentum in this country.

Fútbol is not about “community” or “tribalism” at all. This statement sounds like people are going to a game to hug-it-out over some hotdogs. Never! Fútbol is a way of life! Fútbol consumes you with rage and passion. It’s not civilized. It’s not PC. Want community? Go to a baseball game. Want tribalism? Go to Burning Man. Fútbol is not for the weak and dreary. It’s for the passionate and alive.

As a person who grew-up playing fútbol (and still plays fútbol), and watching fútbol games from Latin America, I was somewhat disappointed when I went to my first MLS game. Not only was I the loudest person in the stadium, I was told by security to keep it down. The crowd felt passion-less except for one area in the far corner–the Supporter’s Club. And I thought, “there’s a section for the fans? Who are the rest of these people?” So, I worked my way to that area several times, but was kicked out because my tickets were not from that section. Then I noticed some fans were escorted out of the area for being too rambunctious–I think they had fireworks, which was awesome!

And then it hit me. It’s not the game. It’s not the fans. The problem is with the MLS. If the MLS would only recognize how different fútbol truly is, they would start on the sustainable strategy of promoting fútbol as a way of life inside the stadium.

Fausto Gortaire
Account Director
HeadQuareters Advertising Inc.

Is Spanish Language Media Sustainable?

The U.S. Hispanic market is the fastest growing segment of the US population and has currently surpassed 15% of the entire population, about 49 MM. The Hispanic population is projected to reach 29% by 2050, or 127MM. If we set aside the advent of new media, is Spanish language media a sustainable media for our market?

For decades, the growth of the Hispanic market was heavily driven by immigration. Almost one-third of the Hispanic population growth was propelled by immigration. This immigration pattern perpetuated the popularity of Spanish-language media. But after 2001, Hispanic immigration took a dive and dropped 24%. This trend will continue with the new political hype on immigration, which will make it even more difficult for Hispanic immigrants to enter the US.

Though Hispanic immigration declined, Hispanic population keeps growing–mainly because of Hispanic birth rates. The average US woman has 1.9 children, but broken down by ethnicity, the numbers are 1.7 for Asian Americans, 1.8 for non-Hispanic whites, 2.0 for blacks and 2.3 for Hispanics–the highest.

In fact, Hispanic teens represent 20% of the total US teen population. Hispanic kids are growing up in the US–defining the emerging Hispanic market in the US as bilingual and bicultural. But what media are they consuming? Does a 10-year old Hispanic in the US watch Univisión or Telemundo? Or do they watch Cartoon Network? Will they continue to watch Spanish channels as they grow up? Or will they just reminisce about these stations every now and then?

I checked the Saturday morning program lineup for Univisión, Telefutura and Galavisión to see how they are addressing our kids. I was surprised to see that Galavisión had no kids programming at all, just infomercials; Univisión broadcasted Planeta U and Inspector Gadget; and Telefutura broadcasted Plaza Sesamo. Between the three channels, there was a total of three shows broadcasted for kids on Saturday morning; half as many shows broadcasted by NBC’s Saturday morning lineup, which consisted of six shows. It's a start, but more shows in Spanish need to be made for kids.

As a Hispanic marketer, I often wonder about the sustainability of Spanish language media, especially if the growth of Hispanics in the US is no longer immigration, but actual birth rates. What is going to happen to Spanish Language media when our kids grow up–in English? Will our kids watch Univision or Telemundo when they are teens? Do these stations address the changing needs of the Hispanic market?

What do you think? How should we, as Hispanic marketers, address this issue? Join the discussion. Thanks!

Fausto Gortaire
Account Director
HeadQuareters Advertising Inc.

Arizona Immigration Law

I’ve been reading some interesting articles and comments about the controversial legislation enacted last month in Arizona. Especially the ones about illegal immigrants creating a financial burden. The truth is that most illegal immigrants do pay taxes, but don't actually receive any benefits from those taxes. With the economic downturn, Mexican immigration has actually declined.

Go figure, less work means a lower rate of illegal immigration, which results in fewer taxes being collected from those immigrants. See a pattern? Life is really stranger than fiction isn’t it?

The other argument, which states illegal immigrants have brought a stream of crime, is just not true. In the past ten years, as the number of illegal immigrants in Arizona grew, the rate of crime across the board declined; the rate of violent crimes dropped by 23%, and the rate of property crime dropped by 28%.

Arizona law enforcement has mixed feelings about this bill as well. But why? Many Arizona cops feel that the law amounts to an unfunded mandate that could damage community relations and distract their attention and resources from serious crimes.

America was build on the backs of immigrants from all over the world. It is our social responsibility to advise Arizona that their new legislation is shortsighted and economically unsustainable. Immigration isn’t the problem–a lack of creativity is at the heart of it. Though I am not a believer of conspiracy theories, the Arizona Immigration Law SB1070 2010 has all the markings of a good political plot.

Fausto Gortaire
Account Director
HeadQuareters Advertising Inc.

Hispanic Cultural Leadership

Food. Flavors. Art. Movies. Premieres. Stars. Music. Rhythms. The works. Hispanics influence much of the fabric of American society, culture and state of mind. The face, taste, colors and even language evolving from the Hispanic influence in America culture helps create Hispanic Cultural Leadership.

Hispanic actors blend the lines between American and Latin culture in many movies. Movies like “Vicky, Chrisitina y Barcelona” and “Spanglish” appealed to Hispanics and the general market in very different ways.

American television has its first Hispanic TV host. The latest success of the George Lopez Show is a clear indicator o how the American audience accepts Hispanics and how Hispanic-American culture broke through American programming.

Some of the fastest growing TV programs are actually bilingual shows MTV Tres, which features both Hip Hop and Latin American artists with Video Jockies that speak both Spanish and English interchangeably.

More and more Hispanics are becoming leaders and are having greater influence on the trends and dialogue of the country. In May 2009, President Barack Obama nominated Sonia Maria Sotomayor for appointment to the U.S. Supreme Court. She became the first Hispanic to become and Associate Justice of the United States Supreme Court.

According to a study conducted by Telemundo, Hispanics out spend non-Hispanics Whites on electronics, movies, clothing, beauty products, video games, CD’s, and groceries.

In the political arena, Hispanics have become more active with their voting power inflating from 5 million to approximately 9.2 million in the past 10 years. Many actually feel that the Hispanic vote helped Obama become president in the recent presidential elections.

When one out of five teens in the US is Hispanic, Hispanics must be leading a cultural revolution in this country. Their influence on the rest of the American population is growing because they themselves are becoming an undeniably larger part of American life.

Fausto Gortaire
Account Director
HeadQuareters Advertising Inc.

Hispanic Market Relevance

The recession forces many businesses to cut programs and department budgets in order to stay afloat. Cuts in advertising to the Hispanic market are among the most common because it poses an easy solution for lowering costs, but may also present unforeseen consequences—especially from competitors that continue to advertising to Hispanics.

When a brand abandons their commitment to the Hispanic market, they are ignoring the power of emerging markets. Hispanics have a strong purchasing power that is forecasted to increase to $1.1 trillion by 2012. Though this recession affects everyone, the Hispanic market happens to be a more stable market than others because their type of work—manual and blue-collar labor—continues to be plentiful.

Also, the cost to effectively reach Hispanics is extremely competitive, not totally because of cost, but consumption. It is a know fact that Hispanics consume more media the average American. Hispanics watch an average of 17.3 hours per week of Spanish language TV and brands can reach 91% of the market with TV alone. Couple this with the fact that Hispanics use TV as a valid source of information; a smaller budget can really make an impact to any brand.

The Hispanic market is more relevant now than ever before. Investment in the Hispanic market makes sense and has the potential for exponential growth. The economic state of America affects everyone, yet Hispanics keep spending. Companies that invest now, during this recession, will ultimately capture the loyalty of the market and grow their brands.

Fausto Gortaire
Account Director
HeadQuareters Advertising Inc.