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Ads Directed at Growing Hispanic Audience Are No Longer a Niche Business

Hispanics recently became the country's largest minority and in recent years have grown increasingly affluent. Spanish-language television and radio companies are U.S. media giants. Hispanic entrepreneurship has boomed, and in the past five years, Hispanic consumer spending increased more than 50 percent, to $531 billion last year, according to a recent study by Spanish-language television network Telemundo.

But the economic power of the nation's more than 37 million Hispanics, a group as diverse economically as they are ethnically, has attracted little U.S. advertising. While 40 to 50 percent of Fortune 500 companies have Hispanic-oriented advertising programs, only 3.2 percent of national advertising budgets is directed at Hispanics, according to the Association of Hispanic Advertising Agencies.

The McLean-based association is urging companies to spend more money on advertising to attract Hispanic customers. It says, for example, that financial services companies will have to allocate at least 6 percent of their national marketing and business resources by 2007.

"Many people in corporate America are not waking up to the fact that they can't keep waiting to target this market," said Ingrid Otero-Smart, the association's immediate past president. It's a necessity. It's not an opportunity."

Some Washington area advertising agencies have tapped into the nation's fastest-growing ethnic group. In Arlington, 20-year-old ZGS Communications Inc., a Hispanic-owned marketing and advertising agency, this month began a Spanish-language financial planning campaign for the Social Security Administration and the American Savings Education Council. "Ahorre para su futuro" (Save for your future) includes events to teach about saving and planning for retirement and other financial needs.

ZGS's clients have included Giant Food Inc. of Landover, the National Highway Traffic Safety Administration, Provident Bank and the Smithsonian Institution. The agency also has done political work such as the Spanish-language television and radio commercials for Democrat Mark R. Warner's 2001 campaign for governor in Virginia.

ZGS chief operating officer Patricia Gaitán said the agency has noticed more interest in Hispanic-targeted marketing in the past five years. In 2000, for example, ZGS assisted Giant's campaign to help customers fill out applications for the chain's discount BonusCard program at 26 local stores with a heavy Latino customer base. ZGS recruited bilingual support staff to handle questions from customers and helped Giant tweak its general advertising campaign to fit a Spanish-speaking audience, Gaitán said.

For Giant, which uses the slogan "Fresh Ideas. Fresh Values.", the agency came up with "Calidad y servicio a su alcance," which literally means, "Quality and service within your reach," to follow cultural sensitivities representative of the Hispanic audience, Gaitán said. The campaign's first-year sub-tagline was "Venga, visitenos y sientase como en casa" ("Come, visit and feel right at home").

"Quality and service are key, especially with ethnic consumers," Gaitán said. "We had seen research that Latino consumers are willing to spend more for quality ingredients." The BonusCard ads ran in local Spanish-language newspapers El Tiempo Latino and El Pregonero, and on TV networks Univision and Telemundo.

Gerry Hemming, marketing director, said the Hispanic population in its trading area is 6 percent, the majority being Salvadoran. At some stores, Latinos make up nearly a quarter of customers, such as Giant on 14th Street NW in Washington, which has a 22 percent Hispanic clientele, Giant said.

"Our BonusCard is a great value for all of our customers, and we don't want cultural differences or language barriers to impede any of those groups," Hemming said. "We're making every effort we can to reach out to that community and other communities."

Advertising requires understanding the culture of the market, Gaitán said. "Just translating an ad is not going to cut it," she said. Washington, like other markets with large Hispanic populations, has a mix of new immigrants from Central and South America. It includes second-generation bilingual and educated professionals. Washington is among the nation's most affluent Hispanic markets.

"With that comes money and purchasing power," Gaitán said.

That fact is sometimes lost on advertisers, many of which have a noticeable lack of Hispanics in their corporate ranks, said Luis Vasquez-Ajmac, president of District-based agency Maya Advertising and Communications, whose clients include Washington Gas , Riggs Bank and Pepco. Stereotypical media images of Hispanics as poor immigrants who don't know English persist, and despite the slight increase of Latino characters on TV, "we are drug lords, we are maids," he said. "Most people watch reruns of 'I Love Lucy' and think all Latinos are Ricky Ricardo."

More than 55 percent of Hispanics in the United States are native and heavily entrenched in American culture, he said.

"This is a very vibrant community," Vasquez-Ajmac said. "These people are putting down their roots here in America. People look at us as foreigners."

That perception seems to penetrate some companies' attitude toward targeting Latino consumers, Vasquez-Ajmac said. Some say they want to advertise to Hispanics, but "we don't want to hurt our current base" by deterring non-Hispanic customers, he said. And there have been advertising missteps, such as Taco Bell's "Yo Quiero Taco Bell" campaign, featuring an "annoying" Chihuahua with a Mexican accent that seemed to belittle Hispanic culture, Vasquez-Ajmac said.

"Until we start getting up into those executive levels, I think that's when you'll see some significant changes in terms of ad expenditures toward the community," Vasquez-Ajmac said. His agency, which has 10 full-time employees, 12 consultants and under $5 million a year in billings, is growing mostly from general- market advertising, although it started as a Hispanic-niche firm, he said.

Also in Washington, Maria Rodriguez, president of Hispanic-owned public relations agency Vanguard Communications, said the need is apparent for marketers to do more than translate English-language ads into Spanish to reach the Hispanic market, and to market higher-end products, such as luxury cars. Her agency specializes in multicultural marketing and has annual billings of more than $3 million.

"It is going to take more time if you're going to reach out to different populations," Rodriguez said. "I do think advertisers and marketers need to put the time and money in. I'm sure the payoff will be there."

Posted on aef.com: May 15, 2003


Sabrina Jones, Washington Post. May 12, 2003

Copyright © 2003 The Washington Post Company. All rights reserved.