The Independent Hispanic Agency and their thinking by Carl J. Kravetz.

Carl J. Kravetz
Chairman/Chief Strategic Officer
cruz/kravetz:IDEAS

President of the Association of Hispanic Advertising Agencies

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

At its most basic level, an Independent Hispanic Agency is one that is not owned by or affiliated with a general market agency or holding company. It is an agency that specializes in the Hispanic market and is managed by its owners. Those are the two key defining factors: Specialization and owner-management.

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

The special value of Independent Hispanic Agencies is implicit in their definition: Independence. We are not beholden to general market strategies and tactics. We are responsible only to our clients, to the Hispanic consumer and to ourselves. This makes us quick and agile. We are able to establish first-hand, undiluted and unfiltered relationships with CMOs and CEOs and, by communicating openly, to create authentic Hispanic solutions to client needs. Independence makes us more honest strategic partners: We are able to point out – without corporate politics — when a campaign, which may be perfectly adequate for the general market, is irrelevant to ours.

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

I really think the main thing that is great about being an independent is that we have the power to say “No.” We are not subordinate to the quarterly demands of Wall Street or to a team of bean counters in London. We don’t have to pitch anything that moves. We don’t have to stay with clients for whom we’re ill-suited. We can tailor our businesses to our strengths and to our passions. We can take on smaller pieces of business that intrigue us. We can be entrepreneurs, entering into different kinds of compensation arrangements that allow us to participate in the gains made by smaller or start-up clients.

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

It’s a lot like being the littlest kid in a class of oversized bullies. You don’t get to flirt with the girls and someone’s always after your lunch money. It’s risky and sometimes feels very lonely. But you get even when the report cards are handed out.

We do get to pitch less. A lot of business is earmarked and never makes it into open reviews. On the other hand, we don’t have to worry about a conflict in a category we don’t handle but an affiliate does.

If we serve an account whose general market agency has a Hispanic affiliate we have large targets painted on our backs. We can be made to be perceived as too small, or too local, or too specialized or just too much trouble to deal with separately. You spend a lot of time in conference rooms with people who are looking for a way to eat your lunch.

We don’t have the benefit of centralized administrative functions – everything we do we do (and pay for) ourselves. We finance expansion with Home Equity Loans and personal guarantees. We walk the tightrope and hold the net.

But it’s exhilarating and fun and you know you’ve made a difference. Sometimes you just wish they’d leave you alone and let you get on with making great advertising…

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

There will always be independent agencies. Advertising and the entrepreneurial spirit go hand-in-hand. There will always be young advertising professionals who think they’ve got a new way, or a better way, or a more creative way of reaching consumers. And they will start new agencies. And some will succeed and some will fail. And of those who succeed, some will be bought and some will be passed on to children or employees or other entrepreneurs.

Now, will they be strictly Hispanic? I doubt it. I think that, as Latinos gain influence in the culture at large, Independent Hispanic Agencies will become more and more involved in general market work. They will be looked upon as trend leaders and predictors. They will make American advertising more interesting, more relevant and more diverse. At some point after mid-century, Hispanic agencies will be general market agencies (not the other way around) because Hispanics will be the general market. Frankly, I believe that all the years of having to dance backwards, in high heels and wearing a Wal-Mart dress have made us stronger, smarter and more perceptive about America and the many cultures living within it than any general market agency with its white male dominated zeitgeist (and, as a white male, I’m allowed to say it!).

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

They will be young, smart, bicultural and have an attitude. They will not be Latin American, they will be American Latino. They will be tech- and media-savvy and think way beyond advertising. They will be producers of American popular culture. And I think they will place media…it is becoming increasingly important that what you say and where you say it come from the same insight and the same intention. It’s almost a cliché but Marshall McLuhan was right: The medium is the message.

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

Frankly, the most distressing trend is toward the use of media buying services. And the fact that media buying services are themselves trying to get into the media planning business. This is hurting all Hispanic agencies. It’s easier for the clients to deal with one company and, frankly, it’s easier for the media, too. This became very clear to me during the Univisión Upfront this past May. As I listened to the presentation — which was all about how Univisión matches up to ABC, NBC, CBS and Fox – I realized that they’re not even talking to us anymore. It’s now all about the general market agencies and buying services. They just take for granted that we Hispanic agencies will be there for them, so there’s no real upside to tailoring a presentation to our needs. This is even more challenging for the Independent Hispanic Agencies which are struggling for attention among much bigger buyers.

The other challenge, as I’ve mentioned above, is the tendency among many clients to consolidate their accounts under a single holding company – sometimes on a worldwide basis.

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

Definitely. Some of the bigger media in our space are biased toward Holding Company-owned Agencies and their affiliated Buying Services. It is certainly true of some of the Agency Search Consultants who advise clients to do all-in-one reviews. On the flip side, some media measurement companies are extremely fair, basing their prices on the amount of media placed. This levels the playing field.

One of the unfairest entities is the Federal government. By continually placing billings floors on major pitches (usually in the neighborhood of $300 million), they effectively preclude Hispanic agencies of any size from being direct contractors and force them to work as subcontractors to general market agencies. The process is definitely stacked against smaller, independent agencies.

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.

Ask me about it! I am Chairing AHAA this year. I travel cross-country on AHAA business on average once a month. Every penny of that travel comes out of my own pocket. In addition, I pay for additional staffing and overhead to do the job I committed to. And I spend hundreds of my own hours a year on AHAA activities rather than on growing my own agency. Do you think I would do all this if I didn’t feel a strong sense of responsibility and obligation to our industry? Do you think Alex, or Manny or any of the other Independent Agency principals who have taken on this challenge would have stepped up without a passion for our business?

The Independents are the heart and soul of our industry, along with all the small, independent media that serve our consumers. Every single one of us could be working in the general market, making tons more money on the exact same accounts. We do this because we want to. Because it is in our blood. Because some things are more important than making even more… It’s hard for me to believe that Martin Sorrell or Michael Roth or John Wren… or Chaim Saban… are as passionate about Hispanic advertising and Hispanic media as were the independent pioneers who started the businesses they ended up buying.

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

If you’re willing to join a family, if you’re willing to live a mission, if you’re willing to take on bigger fish with sharper teeth, if you have a healthy ego… Go for it! Nothing is more fulfilling than putting yourself on the line to deliver for your clients, your community and your co-workers. And we pay just as well as the big guys!