Dieste Harmel on top of game

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Pepsico's Frito-Lay discovered in 2003 that guacamole, like salsa before it, has migrated from a Latino taste to the mainstream palate.

One of the year's highlights for Dallas-based Hispanic agency Dieste Harmel & Partners was launching Lay's Cool Guacamole potato chips in January, with a target of $12 million in mostly Hispanic sales. With Dieste's help, the new product took off, crossed over into the general market and headed for first-year sales of $65 million.

"We launched assuming it was more urban and Hispanic-targeted, and found out it had a lot of mainstream appeal," says Lora de Vuono, Frito-Lay's VP-advertising. "It's a great product, and Dieste did terrific ads."

CEO Tony Dieste says Frito-Lay involved the agency from the early stages of research and development, naming, and positioning for Lay's Cool Guacamole. And Dieste adapted into English its high-scoring Hispanic spot "Dipping," still featuring the same Latino male who can't resist dipping chips into an imaginary bowl of guacamole.

CROSSOVER APPEAL

"It started as an authentic Mexican product, but it had huge crossover potential," Mr. Dieste says. "It's the Corona [beer] of chips."

In the two years since Omnicom Group-owned Dieste was named Advertising Age's first Multicultural Agency of the Year for its strategic insights and creative work in 2001, both the agency and the Hispanic market have grown and matured. In winning for a second time for 2003, Dieste reflects the expanding role of the best Hispanic agencies.

Such agencies play a key role in ads and products like Lay's Cool Guacamole that increasingly cross over into the mainstream market. And the shops' proven success with Latino consumers inspires marketers to add more brands to their Hispanic programs.

Clorox Co., for instance, has increased its Hispanic commitment at Dieste from four brands several years ago to 12 now. And Frito-Lay, a major Dieste client with its No. 1 and 2 brands Doritos and Lay's, will add the first Hispanic component to its No. 3 brand, Tostitos, this month, Ms. de Vuono says.

As part of its growth strategy, Dieste in the last year set up separate units with their own creative and account teams for direct response, promotions and events. "We offer integrated solutions with the same look, feel, tone and strategy," says President Warren Harmel.

Mr. Dieste estimates that billings grew by at least 35% in 2003. And at a time when general-market agencies were still trimming already lean staffs, Dieste hired about 40 new people in 2003. In new business, the agency picked up Washington Mutual's banking and mortgage business, Western Union, Office Depot, GE Corporate, Jose Cuervo tequila and the National Football League's Dallas Cowboys. One new account, Cingular Wireless, arrived at Dieste without a pitch because the general-market business is at sibling Omnicom shop BBDO Worldwide. The Hispanic account is now in review, with a decision due in February.

STRONG COMPETITION

Dieste faced strong competition for Multicultural Agency of the Year from last year's winner, the Vidal Partnership, New York. Despite losing two major accounts in early 2003 that would have led to a round of cost cutting at a holding company-ruled agency, independent Vidal fought back to boost billings by 33% to $113 million, ending the year with 98 staffers, up 40% from 2002. Besides being a formidable contender in any new-business pitch, Vidal dazzles with its creative work for Heineken and other advertisers.

Among other multicultural agencies, Omnicom's Spike DDB, New York, had a strong year with billings growth topping 33%. And in the Asian-American segment, which struggles to break into new product categories, Interpublic Group of Cos.' IW Group, Los Angeles, was the first Asian-American shop to capture a major fast-food marketer by winning McDonald's Corp.

If Dieste had a weakness last year, the agency's creative work was more solid than cutting edge, compared with both its own past ads for marketers like Anheuser-Busch and Vidal's stunning 2003 output.

But there was much raising-the-bar work for marketers not known for their creative daring.

Dieste takes Clorox Corp.'s Glad plastic containers, for instance, far from the kitchen in a fun spot that shows an urban commuter's dropped lunch falling through a manhole cover and traveling safely across the world to a man fishing through a hole in the polar ice.

"I'm still thinking we can do much better," says Aldo Quevedo, Dieste's executive creative director. "But very methodical clients like Clorox have allowed us to take Glad from a man at the kitchen table to a guy fishing at the South Pole. That's a major achievement for us to change (for the Hispanic market) the paradigm of what Clorox is doing in the general market."

Dieste has also cracked the pharmaceuticals industry, one of the categories that most underserves Hispanics. As Pfizer's main Hispanic agency, Dieste has developed an umbrella educational program to inform Latinos about health problems they're often unaware they suffer from, starting with high cholesterol.

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