When Julie Lugones cofounded Miami-based Fusion Communications in 2006, there was a firm line between Hispanic-oriented campaigns and general market work, with Hispanic firms pivoting between the two.
That’s no longer the case, she says, as the U.S. population has shifted younger and increasingly multicultural.
Over the last decade, clients have increasingly sought to invest in U.S. Hispanic markets, with brands in categories such as technology, CPG, beauty and spirits spending billions of dollars annually to reach Hispanics.
And who can blame them? Hispanic buying power reached approximately $1.5 trillion in 2020, up 212% this decade, according to the Selig Center for Economic Growth at the University of Georgia. The data is coupled with 2020 U.S. Census results, which show the Hispanic population reached 62.1 million and accounts for more than half of total growth in the U.S.
But over the years, what was once believed to be a unifying factor for reaching all Hispanics, the Spanish language, has become a stereotype. Hispanic-owned firms are preaching to clients that simply translating a campaign into Spanish isn’t sufficient for reaching the audience.
Consequently, many are choosing different methods for meeting client needs as the lines between the two worlds blur. For instance, since the early days after founding Formula PR, renamed Havas Formula after its acquisition in 2014, CEO Michael Olguin says he has never sought distinction as a minority-owned agency.
“I never wanted that distinction,” he says. “I wanted us to be able to win the business because we had the capacity and capability to do the work.”
It was a choice made on the foundation that the modern Latino can be reached in English, a reality he personally identifies with.
“Historically, there was a belief that you can only reach Latinos in Spanish, and I agree that you still can reach them contextually in Spanish, but you can also reach them in mass media,” he says. Olguin notes that campaigns should be “contextually relevant” and target Latino passion points such as family, music, sports and food.
His assessment is consistent with data that shows that much more than Millennials, 91% of Latinx Gen Zers were born in the U.S. and are more likely to consume English-speaking digital content. Still, they value their cultural roots, with 79% of Gen Z parents saying it's important to teach their children Spanish.
Joining forces with Havas allowed Olguin’s firm to reach a wider scale, growing to a mid-size agency with six offices in key markets. Since being acquired, Havas Formula has led Latino communications strategy for large brands such as TurboTax and Chase. Olguin declined to share spending figures.
Similarly, full-service independent ad agency Chemistry recently took full ownership of Miami-based Pinta, which it had a minority stake in, leading to an integration of advertising and marketing services with PR.
The decision was made to increase scale while maintaining the integrity of the firm and its work, says Mike Valdes-Fauli, CEO at Pinta.
“We did a lot of soul-searching about whether we wanted to take on any partner at all because we were proud to be independent and minority-owned,” he says. “But the world has changed in many ways and increasingly, this business has necessitated scale for agencies to compete. So I was faced with two options: staying independent or selling into the holding company model, which I had never been interested in. I was thrilled to have found a middle ground.”
In addition to communications, the firm now provides social media strategy, advertising and creative services to clients including Heineken, T-Mobile and Microsoft. According to Valdes-Fauli, it is reporting 30% revenue and headcount growth compared to 2019.
“There is some skepticism, these days, about whether the Hispanic population will assimilate and ultimately become English-dominant, therefore no longer requiring specialist firms and targeted campaigns. I strongly decline that perspective,” he says. “The [current] Hispanic population is very different from any immigrant population that came before it.”
While some firms are striking deals to meet client needs, others say flying solo is the way to go.
For instance, the multicultural and certified minority-owned Axis Agency, which began as a practice of Weber Shandwick in 2005, bought itself out of Interpublic Group last year in a bid to focus more on the Hispanic market.
“When marketers and brands were simply asking us to take a campaign and translate it to Spanish, that was easily done through the general market lens,” says Armando Azarloza, CEO at the Axis Agency. “But now that our clients are asking us for deeper insights about the nuances of segments in the community, it requires much more specialization, and I think that specialization comes from us being independent.”
Audrey Ponzio, founder and CEO of APC Collective, a communications agency collaborative that provides multicultural consulting services to clients, expressed similar sentiments, noting that she is in conversations about what model is sustainable.
“Equity is connected to ownership, and if we could serve more and do more to change the world for the better, I’m all for it. But if it's a partner that just wants headcount so that they look more diverse and they're going to relegate us to specific conversations where we can't have the impact we are meant for, then no, those aren't the right partners,” she says.
Meanwhile, in Spain, Hispanic firm LLYC, which has offices in Latin America and the U.S., has grown steadfastly as an independent entity, filing for an IPO on the Spanish stock exchange in June. LLYC’s partners bought back a 30% stake this spring in the firm that French private equity firm MBO & Co took in 2015. Aside from going public, since then LLYC has also acquired performance and digital consultancy Apache, and took a 70% stake in Spanish ad agency China.
Regardless of structure or business model, to achieve success with Hispanics, PR pros agree there is a key insight to understand: they are not a monolith, and to reach them, marketers will need to implement various efforts.
To start, brands should think about the segment of Hispanics that identify as “hyper-cultural Latinx,” the second-generation, young Hispanic that identifies as both 100% Hispanic and 100% American.
“There's room to talk about race or ethnicity and country of origin within the Latino identity,” says Michelle O’Grady cofounder of Team Friday, which leads communications for clients including Whole Foods, Good Rx and AARP. She notes brands can appeal to other identities within the Hispanic community, such as AfroLatinos, members of the LGBTQ+ community and even Spanglish-speakers.
Alejandro Romero, CEO of the Americas at LLYC, suggests agencies and brands should data-mine against the audience in order to understand cultural nuances, a practice his firm implemented by employing several engineers.
Similarly, Erika Sanchez, cofounder of Braid Communications and president of the Hispanic PR Association New York Chapter, says brands and firms should do more to put Hispanics in leadership positions, even within general market firms to get “culturally specific.”
In general, however, all PR pros agree that fundamental to reaching Hispanics is to invest in them. Ned Show, CEO at ad agency Chemistry, which acquired Pinta says, for his firm, investing in Hispanic services is simply a good business move.
“[The U.S. Hispanic population] has a large impact on consumer purchasing and the brands that want to be successful better start understanding that segment of the U.S. population,” he says. “Chemistry found a partner in an agency that understood that and [we are] a stronger agency [for it].”
Havas, which acquired both Havas Formula and Republica Havas, echoed the sentiment, noting that “multicultural marketing intelligence needs to be in every brand’s DNA.”
“It was important for us to find the best partners who do not just understand multicultural marketing but are embedded in the fabric of different cultural communities in America such as Formula and Republica,” a Havas spokesperson said in an email. “Combining Havas’ integrated capabilities with their fluency in multicultural values and preferences allow our clients to connect to diverse audiences with authenticity and impact.”
For now, Hispanic firms continue to watch the market and prepare for the RFPs to come. Fusion Communications, for instance, leads Latino marcomms for major brands including Xerox, JBL and Medtronic. Pinta has added Western Union to its roster, as well as other clients it declined to name publicly. The Axis Agency is developing a Latino strategy for Realtor.com.
“It's always an exciting time to be in the business of communicating but now, with the census, companies are taking note of where their growth is going to come from,” says Ponzio at APC Collective. “You're going to see that those that have invested will double down [on that investment], and those that haven't will think more about it.”
This story first appeared on PRWeek US.