• by Jose Villa , Columnist, August 4, 2011

Hispanic advertising in the U.S., since its inception in the 1960s (check out Latinos, Inc. if you are interested in the reading about the early days of the industry), has historically been a specialty segment served by specialized agencies focused solely on Hispanic advertising. The business of Hispanic advertising has seen consistent growth since those early days and has become a robust segment within the overall advertising business. Other ethnic segments, such as Asian and African American advertising, have a similar history and growth trajectory.

However, anyone who has been paying attention to the Hispanic advertising industry in the last three years knows things have started to change, as two forces have emerged:

1) So-called "general market" agencies have created Hispanic advertising teams or departments within their agencies to pursue this specialty advertising work

2) Some clients have begun to consolidate their general market and Hispanic assignments within a single agency -- usually with general market agencies but with ethnic shops on a few rare occasions

The trends are obviously not positive for Hispanic ad agencies, as they see big agencies "crowding" into their space, diminishing their role.

The trends playing out in the Hispanic advertising industry appear similar to those that have taken place more generally in the ad agency business as new disciplines have emerged over the last few decades. Every couple of years, a new discipline emerges -- whether it was direct response in the late '70s / early '80s or digital in the late '90s -- that has a significant effect on the ad business. A similar cycle has taken place: as the new disciplines emerged, specialist agencies initially arose to address them. However, over time, these new disciplines were "integrated" into larger agency offerings, and the specialist agencies disappeared or were absorbed into larger agencies.

Yet, occasionally, major tectonic shifts occur, representing much more than the addition of a new discipline to the ad agency repertoire. The emergence of TV in the 1950s marked the first tectonic shift of the modern ad agency age, ushering in the "Mad Men" era that focused advertising on the "big idea," based on emotional advertising broadcast to the masses using network TV. I would argue the second wave of digital media, ushered in by social media in the early 2000s, marked the latest tectonic shift in the ad business -- forcing ad agencies to fundamentally change their focus towards two-way, pull-focused marketing, leveraging connected consumers as critical agents in their ad programs.

So is Hispanic advertising -- and multicultural advertising more generally -- simply a new discipline, like direct response, that larger agencies will "bolt on" to their service offering? Or is Hispanic and multicultural advertising a tectonic shift that forces agencies to significantly change their approach to advertising?

I would argue the latter.

As the demographics of the U.S. rapidly change (as the Census data clearly show), the model of an ad agency that focuses on some amorphous, non-ethnic "general market" will have to evolve -- and rapidly. "Bolting on" a Hispanic team or department to a large agency will not cut it. That is akin to creating a digital group within a traditional ad agency.