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Shifts in Multicultural Marketing Are Affecting Agency Roles

We're at a Tipping Point in the Battle of Effectiveness vs. Efficiency

By Published on . 11

In just one week, in very different work settings, Walmart Stores, Kellogg's, AT&T, Wells Fargo, General Mills and Target were in focus. The topic? How each is wrestling with new marketing models that try to balance the "total market" vs. ethnic-specific initiatives. "Total market" is defined as an appreciation that the general market has dramatically shifted, and is now defined in large part by ethnic consumers.

This topic was addressed in conversations I had with clients, Hispanic media and Hispanic agencies. There were varying perspectives: two where CMOs were directing their general-market agencies to be more ethnically inclusive in their efforts, two from leading Hispanic ad agencies that were struggling to defend their position as cultural strategists within their accounts, and the others simply referencing the ongoing attempts within their organizations to figure it out.

What seems to be clear: After years of making the case for the Hispanic market, companies are recognizing the demographic realities of our consumer population. This should be considered good news, as ethnicity becomes more central to the marketing efforts of the Fortune 500. Ironically, several market actors (primarily Hispanic ad agencies) are the ones who most vociferously made this case and are now feeling the most vulnerable. Part of the concern comes from watching their client companies move to efficiency vs. effectiveness decisions. Efficiency stems from having one agency either handle all marketing, or take the lead in handling it and providing direction to ethnic agencies. Effectiveness is about making sure that the consumer stays at the center, and that ethnic agencies are truly providing marketing that moves the needle by its deeper understanding of the consumer's cultural identity.

Let's take a look at just one example. General Mills is widely regarded within the Hispanic marketing world as a company that acknowledges the importance of the Hispanic consumer. They have been quite vocal in their "new mainstream" philosophy, highlighting it at industry conferences and through case study work like Nature Valley. Recently it seems they have moved to having Saatchi, their general market agency (to use legacy parlance), take the strategic lead, with other agencies like Bromley (Hispanic) following. Will Hispanic insights, creative and strategy be diluted? Time will tell.

General Mills is not the only company in this discussion; all of the companies mentioned are and more. Efficiency and effectiveness need not be mutually exclusive, but finding this balance is the central issue of the moment. The tipping point is upon us.

ABOUT THE AUTHOR
Stephen Palacios is exec VP of Cheskin Added Value, New York.
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