The Independent Hispanic Agency and their thinking by Alex López Negrete.

Alex López Negrete, President & CEO – Lopez Negrete Communications

1. What, in your eyes, defines an “Independent Hispanic Agency” these days?

We seem to be in an era where independence is cited in degrees or percentages. Independence and freedom don’t come in percentages. To be clear, an independent agency is one with absolutely no financial or structural ties to another larger, general market agency or holding company. And, when I say this, I also include independent general market agencies. An independent Hispanic agency is a stand-alone agency. Period. No hues. No degrees. No big brother. Punto.

2. What value do you believe an Independent Hispanic Agency brings to its clients?

It can be safely said that those who have started or have taken on a management position in an existing Independent Hispanic Agency are valiant, fearless and eternally optimistic souls (modest, too!). With this comes a different perspective. They are visionaries who not only see the potential of their own agencies and of this industry, but also see the potential in their clients’ businesses – oftentimes when no one else can. Clients, today, more than ever, expect and need this fearlessness, this ability to see the business and opportunities in a way no one else can. The last thing they want is conventional thinking – and what they hunger for most is that daring inventive thought process that usually lives within entrepreneurial souls. This is where Independent Hispanic Agencies come in and excel. This is all we have ever known. We’ve had to be builders and path-blazers throughout our professional lives.

We also must understand that our clients (usually at the CMO level) who work for larger, publicly traded companies are under tremendous pressure to perform miracles on a quarterly basis to serve the stockholder and investment communities. The only stockholder Independent Hispanic Agencies are worried about is their client’s. A nice plus.

Beyond this, our very independence is the greatest asset we bring to the table for our clients. Our independence gives us the inherent freedom to think freely and recommend without ulterior motive. Our independence gives us the freedom to hire, plan, staff and compensate according to the opportunity, not according to what some financial analyst, or Director of Finance in another city who doesn’t live our business on a day-by-day basis may say. The key value our independence brings to our clients is that it makes us (and our work) powerful, relevant and transparent. I don’t know one client who doesn’t treasure and need this. At least, all mine do.

As a true and completely Independent Hispanic Agency, I have also come to realize that clients need and want their agencies to ‘play nice’ and to bring their best game to the table. Our independence, over time, has allowed us to be at the table and to interact, collaborate and work closely with some very fine general market agencies (both independent and Holding Company agencies). Because we have no ulterior motive or hidden agenda and because we don’t represent the threat of another Holding Company, by and large, we have been let into the ‘kitchen’ of and with our general market agency counterparts. There is a certain comfort, a ‘confianza’ that ends up developing between us which results in synergies and collaboration that become very powerful. Our clients have come to appreciate and value this greatly. Of course, the client plays a huge role in setting these expectations and fostering an environment of collaboration towards a common cause.

3. Why do you believe it is good to be an Independent Hispanic Agency? What advantages do you think we have as “Indies”?

In line with the answer of the previous question, our status as Independent Hispanic Agencies not only brings value to our clients – but it also brings value to our industry, and certainly, to ourselves as business owners, partners and managers. I say this for various reasons, some of which I alluded to previously: 1) we are free to make the strategic, creative and executional recommendations we believe are right for the segment and right for our clients’ business, independent of higher-level (political and diplomatic) agendas which may not be designed with the clients’ ultimate benefit in mind. Simply put, we are not beholden to someone else’s command or desires – only to our own and our clients’; 2) we are free to hire, staff and customize our agency teams to best serve our clients. We are not hindered or held back by externally imposed hiring freezes or budgetary restraints (let’s not forget that holding companies aren’t doing so well these days, either, which is why they are setting their sights on the Hispanic marketing industry which IS doing well). Many times an Independent Hispanic Agency will build a larger or higher-ranking team beyond what the present client budget or FTE plan calls for. Why? Because we see the opportunity, the upside, and have only ourselves and our partners to be accountable to, and we invest accordingly. This is one of the reasons why Independent Hispanic Agencies typically excel at building clients; 3) We are free to build our agency’s future as we see fit, with the mix of clients we want and feel we can best serve. Sometimes this means going after smaller clients in whom we may see a huge upside for growth or simply an opportunity to do really cool work for. I can’t think of anything more frustrating than not being able to pursue a particular piece of business because of some conflict or because I am not allowed to; to have to pitch a piece of business I don’t believe in; or, worse yet, to lose a piece of business due to no fault of my/our own. Independent Hispanic Agencies, for the most part, have the freedom to craft their destiny. It’s a great place to be if you have the courage.

4. What is it like to be an Independent Hispanic Agency in these days of holding company consolidation and continued acquisition?

I know my fellow Independent Hispanic Agency owners will probably have the same or a similar answer: is it a walk in the park? Absolutely not. Would we trade it? Never.

The fact that holding companies and their general market units are looking towards the Hispanic advertising industry for growth and profit is undeniable. In fact, this applies to independent general market agencies as well. Our industry is the sweet spot, the future, the answer to their growth and fragmentation woes. So, this means that every single client we have is being pitched, cajoled and romanced by players bigger than us. But, this is not new news. From the earliest days of our industry, the story has been the same: a smaller, independent agency does great work for a client, grows it, and then, this very same client becomes the target of a larger agency. Nothing new – and not necessarily unique to our particular side of the industry. The important lesson for us here is that we must OWN these relationships, and the only way to own them is for them to be at the highest possible levels of the corporation. And, this is where much work has got to be done. In fact, the very growth and future of our industry depends on this. This is why the work we do at AHAA is so important. If Hispanic is on the CMO’s radar screen, Hispanic gets done. If not, it doesn’t.

Unfortunately, there are some wonderful pieces of business which never come up for open pitch. They are kept within the holding company structure or confines. And, again, unfortunately for our industry, sometimes this may mean that the Hispanic agency only gets allocated so much budget (usually less than what it should be) because the Holding Company-owned agency finds itself powerless to fight for dollars in an open forum. This, I see as terribly unfortunate and unfair for Holding Company-owned Hispanic agencies (of which there are many fine ones). Bottom line: too often budgets are influenced, allocated and distributed according to what the general market agency deems appropriate because they own the relationship and they have THEIR sacred P&L to protect. Oh, the fate that would befall the Hispanic agency President who openly challenges the ‘order of things’!

As the eternal optimist that I am, I believe the best clients who truly understand the size, importance and current level of sophistication of our industry and craft will be those who do select from the best our industry has to offer, whether Independent and/or Holding Company-owned. The pitches will include the best of the best as well as the right and logical mix of agencies for their needs. They will understand that ‘bundling’ is not in their best interest, either. What I mean by ‘bundling’ is lumping everything into one holding company or into a ‘multicultural’ scheme. Our industry and our segment is simply too large, too diverse and too important to re-segregate it into a corner. We cannot allow that to happen. Independent Hispanic Agencies are in the best position to get this done by the simple fact and benefit of their independence. Translation: we Indies will end up fighting the battle(s) that will benefit the entire industry because we are free to do so. We always have.

5. What do you think is the future of Independent Hispanic Agencies in relationship to the general market, or the market overall?

Independent agencies (Hispanic or otherwise) will always exist and will always thrive. Their founders are and always have been entrepreneurs. These men and women are not just agency builders. They are also industry builders. Truly, this is more salient and true in the Hispanic realm. Why? Because of the enormous growth and potential of our market. It’s still the wild west in Hispanic marketing. We’re building this thing. Right now. And, it’s very exciting. I just hope that the majority of us don’t see the ‘end game’ as selling out to general market agencies. We have so much to do, so much to build. It would be a wonderful thing to see an Independent Hispanic Agency be multi-generational – and, if not family-owned, for it to be Independent for longer than one generation.

It is my belief that the future of Independent Hispanic Agencies is as bright and promising today as it ever was, if not more so. What has changed (and for the better) are the tools by which we have to build our agencies and our clients business, whether these tools come in the way of talent, technology, connectivity and levels of investment our clients provide. Something else that is changing is the overall dynamic: the Hispanic market is quickly becoming the general market. This changes everything. In some instances we will have agencies that are, by their definition, general market (or “total market”) agencies which are owned and managed by Latinos (and, as a result, the general market work will be far more inclusive, reflective and relevant) – and there will be agencies whose sole purpose and focus will continue to be delivering and reaching the Latino consumer regardless of language or level of acculturation. Yes, these are nuances, but they are important nonetheless, which is why, as an industry, we must abandon the protectionist and dangerous discussion about “English OR Spanish” and why we must start guiding the discussion in terms of “Spanish AND English” and, more importantly in terms of Hispanic Identity. As long as we fall prey to the language discussion, we will fall prey to the media and to tactics – not strategy. When we successfully move the discussion to issues of culture and identity, we will be in a better position as Hispanic agencies to drive the strategy and play on the big stage.

6. What do you think the next generation of Independent Hispanic Agencies look like?

I believe they will come in many forms, sizes and even be focused on specific disciplines. There will be the typical Independent start-up which is brash and brave and focused on creative. There will be the Independent Hispanic agency which will focus on specific discipline or field: interactive, public relations, promotions, and so forth. And, of course, there will be the Independent Hispanic agency that is not a start-up, but has evolved with the industry and provides clients the wide array of services and depth which clients need from a larger agency.

Because the road we have traveled as Independent Hispanic agencies has not been an easy one to date, we, collectively, have had to be smarter and more resourceful. We hold ourselves more accountable and are fearless about demonstrating ROI. We have had done a far better job than our general market (Independent) counterparts of evolving with the business, if not evolving the business itself. I believe that the next generation of successful Independent Hispanic Agencies will be even more inventive, will have more attitude and will realize they have a unique opportunity of dictating the very future of marketing in this country overall. I also believe that those agencies that succeed will have a very unique Hispanic American perspective and culture. They will embrace the fact that this country is undergoing a fundamental cultural and demographic shift, and as such, will realize that having a deep understanding of the Hispanic American reality is a fundamental skill set.

7. What unique challenges do you feel Independent Hispanic Agencies face in today’s marketplace?

The challenges and threats come from several directions. It is important to note that Independent Hispanic agencies AND Holding Company-owned Hispanic agencies share many of these threats and challenges. At the top of the list is the threat of media buying agencies and services. This affects us all, and everyone loses on this one: Hispanic agencies, the media (they really do), and most importantly, the client. Time and again it has been proven: when the Hispanic Agency (Independent or otherwise) plans and places the media, there are efficiencies, creativity, synergies, growth and results that far outweigh the convenience that media buying service companies sell clients on. Another challenge, or competitive threat that is shared by all Hispanic Agencies is the threat that comes from discipline-specific general market agencies. This is why it is important that our industry diversify and foster the creation and growth of discipline-specific Hispanic agencies.

Specific to Independent Hispanic Agencies is the challenge presented by the tendency of some clients to consolidate their accounts under one holding company umbrella. However, in most cases, this consolidation has rarely resulted in the convenience, efficiencies, integration and across-the-board performance they expected or were promised. It remains a challenge, nonetheless.

8. Do you believe there are entities or forces who are or are not supporting Independent and Holding Company-Owned agencies equally and fairly?

Yes and no. There are many who say that some of the larger media companies are more interested in doing business with and favor Holding Company agencies, and/or their affiliated Buying Service entities. Judging by some of the Upfront presentations earlier this year, it would be hard not to wonder. However, I don’t believe the media is looking forward to becoming commoditized, which is what eventually happens if the business shifts away from Hispanic agencies. This is a relationship business. I believe it always will be. It is from these relationships that risk-taking, creativity, daring, innovation and big ideas are born. And, this is where clients and their brands get that much needed top-spin. It is our job to deliver this and demonstrate it.

We can also look at some of the media measurement companies. Many, if not most, price their services based on the amount of media placed, which makes it fair. However, as an industry, we had to make sure that this was the case – it didn’t just happen, we made it happen. It is up to us, collectively, to have the courage to be good watchdogs and to work diligently so that the field is as fair and level-set as it can be.

9. Do you believe there is a unique sense of responsibility Independent Hispanic Agencies bear (or should bear) insofar as the further development and growth of the Hispanic marketing and advertising industry? If so, please give your views.

In my eyes, there is no question about it. Absolutely. This industry was created by pioneers who had an indomitable spirit of independence. They blazed the path we all walk today. We should pay homage and be grateful. Names like Conill, Casanova, Dillon, Font and Sosa. They were all, at one time, independents. In fact, one of the greatest moments of my AHAA Chairmanship was to finally have an opportunity to meet Alicia Conill – and the first thing I told her was “¡…gracias, Alicia!”. I also fervently believe that the leaps of progress we have experienced in the last 15 years or so have largely been at the hands of the Independents and their entrepreneurial founders. So, it’s up to us, the agencies with our names on the door like Orci, Zubi, Kravetz, Machado and Vidal to continue shaping the road ahead. I, at least, feel a responsibility to help build the industry and shape the next generation of Latino marketers. And, I believe this can be best done by those who firmly hold the destiny of their agencies in their hand: the Independents. After all, there is no honor in walking through fire if you have lead shoes.

10. What advice would you give a future Independent Hispanic Agency professional interested in working for an independent?

If you’re thinking of working for or being on the management team of an Independent Hispanic Agency, get ready. It’s not for the weak at heart or for the dispassionate. There is no net. But, when you put your foot on that tightrope, and walk across to the other side, the water is fresher, and the air is sweeter. The wins belong to you. The accounts belong to you. You have control of and responsibility for your destiny and of those who have put their careers and livelihood in your hands. There is no greater honor. You are not only the conduit between your clients and the community – you represent the community. You belong to the ranks of Latino entrepreneurs and you are part of a long line of brave and inventive marketers. No, it’s not for everyone, and that’s ok. But, if you would rather stay up at night and worry about your clients’ stockholders rather than your own, then, this gig’s for you!