Starcom MediaVest Group in March 2007 created SMG Multicultural, consisting of two largely Hispanic units embedded in Starcom and MediaVest. The Starcom unit, composed of Tapestry's Chicago headquarters and smaller Miami office, kept the Tapestry name. Tapestry's New York office was renamed 42 Degrees at MediaVest, a whimsical reference to the angle at which the sun hits drops of rain to create a rainbow.
Giving Publicis Groupe's Starcom and MediaVest their own embedded multicultural brands has proved a magnet for growth.
Exactly one year later, 42 Degrees at MediaVest has picked up Hispanic buying for MediaVest clients Heineken, Continental Airlines and Avon Products. All were previously handled by Hispanic agencies' own media departments. But the new shop's biggest prize was Wal-Mart Stores' multicultural media account, which moved as part of MediaVest's win of the general-market business. Lopez Negrete Communications, the only Wal-Mart incumbent to survive the review, lost Hispanic media but kept the big Hispanic creative assignment.
"The majority of business is from integrated pitches," says Monica Gadsby, CEO of SMG Multicultural. "We win accounts together, like Wal-Mart, or [the client] is already in the Starcom or MediaVest family. We also go into full-service pitches with sister agencies like Lapiz or Conill [both Publicis Hispanic shops]."
Altogether, SMG Multicultural's billings were up about 20% in 2007 from $750 million in 2006. Even split into two brands, Tapestry and 42 Degrees at MediaVest are the two biggest Hispanic media-planning and -buying units in the market, thanks to clients such as Procter & Gamble Co. and General Motors Corp.
Billings are still about 80% Hispanic.
"We are determined to change that," Ms. Gadsby says. "We find the African-American sale to be so much tougher for clients to comprehend."
African-Americans tend to watch a lot of TV, so marketers believe their normal TV schedules will reach black audiences with no need for further investment, she says.
To counter that, SMG Multicultural is partnering with a black futurist who's developed 12 archetypes for African-American consumers. The agency is working with research companies such as Nielsen to link the archetype findings to media databases to make the information actionable, Ms. Gadsby says.
"We're presenting that to clients and sharing it with African-American media partners," she says. "If clients are interested, we want to be able to drive the supply of [black] media up."
It helps that new client Wal-Mart invests heavily in all multicultural segments, including Asian-American. SMG Multicultural is starting Chinese-American focus groups, and Ms. Gadsby says at least eight of the multicultural group's 90 employees are of Asian descent.
With a sizable digital team, Ms. Gadsby is also encouraging marketers to spend more than the 5% of Hispanic budgets now devoted to digital and explore newer areas such as gaming, mobile and search.
Most marketers include multicultural in media pitches, and even if they don't ask, having an embedded multicultural media shop means the agency can suggest it anyway as part of how to allocate budgets among different segments.
"It's smart integration," says Caleb Windover, senior VP-managing director at 42 Degrees at MediaVest. "Sometimes that means you shouldn't put anything in multicultural, and sometimes it should get everything."
So far, there are virtually no pitches just for multicultural media. "We've tried," Ms. Gadsby said. "But most clients only want to slice their budgets so thin."