Goldman Sachs May Sink $50 Million into Agencies that Reach Hispanics

BusinessWeek magazine's Burt Helm reported this week on the Goldman Sachs plan to gobble up Hispanic marketing shops and may spend $50 million.

There are some unique and effective PR shops, including my own The 2050 Group, that specialize in reaching Hispanic media on behalf of clients and would be wise investments as the market and business demand continues to grow.

Click [here] to see the article on their site or see below:

BusinessWeek

February 5, 2007

MARKETING
It's Fiesta Time At Goldman

Every year at Hispanic street festivals across the country, millions of immigrant and U.S.-born Latinos throw back beers, enjoy live music, and feast on everything from empanadas to fresh mangoes. Now Goldman Sachs wants to join the fiesta. Over the next five years the company's merchant bank plans to spend as much as $50 million buying up marketing and advertising companies that cater to the growing Hispanic population in the U.S., even acquiring street fair operators along the way.

Virtually every ad conglomerate has a Hispanic unit. But Goldman will be the first to unite a group of Hispanic marketing and entertainment outfits into a holding company that will serve as a single stop for big brands hoping to navigate the promising but increasingly complex market. Even some competitors concede Goldman is on to something. "Clients are all asking for integrated services," says Carl Kravetz, president of the Association of Hispanic Advertising Agencies and CEO of Los Angeles-based cruz/kravetz:ideas.

At the outset, Goldman is looking to snare one of the 30 to 40 independent Hispanic ad agencies that annually generate between $25 million and $100 million each in billings, plus a research firm and a festival producer. Goldman will be majority shareholder with management handled by Latin Force, a marketing consultancy. The idea is to tap into second-generation Latinos. Young and bilingual, they consume mostly English-language media but still retain aspects of their parents' heritage.

By 2010 the number of these "New Generation" Latinos could reach 15.4 million, according to the Pew Hispanic Center in Washington, D.C. Practically all growth in the coveted 18- to 34-year-old demographic comes from Hispanics, according to Pew. "The Hispanic market is getting so complicated and confus-ing," says Goldman Managing Director Kevin Jordan. "That's the reason to build a company like this."

Mexican Regiona Hits New York

One of the nation's top-rated Spanish-language morning radio programs has hit the NYC media market. “Piolín por la Mañana” (“Tweetybird in the Morning”) has hit the Univision-owned WZAA, which according to Saturday's edition of The New York Times, became "the first FM station in New York offering a format known as Mexican Regiona, which includes genres like ranchera, banda and norteña music."

Times reporter Seth Kugel reports that, "In most Hispanic hubs of the United States, the arrival of another Mexican regional station would have been nothing unusual. According to the Arbitron ratings service, the format attracts a 19.4 percent share of the Hispanic market, making it the most popular Spanish-language format by far. A recent Arbitron report shows that it is also the fastest-growing and that there had not been a single station playing a Mexican regional format from Maine to Pennsylvania in 2005."

Each semester I devote an entire class session to ethnic radio in my Master's course in Ethnic Marketing. It's great that the Times continues to shine light on the power of radio programming that reaches deep into ethnic communities better than other media forms.

Click [here] for the full article.

Hispanic Ad Spending Continues to Rise

ADWEEK reports on the announcement from media tracking agency TNS that they're projecting 5.4% growth for Hispanic advertising this year.

According to the article posted [here] on ADWEEK's site: "The Hispanic market is continuing to look very strong," said Steven Fredericks, president and CEO of TNS Media Intelligence. "The overall outlook for 2007 is relatively conservative at 2.6 percent, and the growth forecast for Hispanic media is more than double that.

Hispanic media buys have been smart investments for so many companies who have effectively reached into the Hispanic consumer market.

And many of the major investors behind Hispanic media ventures have seen their investments swell. This is exactly why Univision was able to sell itself for an astronomical amount of money to a team of investors. The Hispanic market continues to grow both in dollars and consumers and this is part of what makes tracking this market so exciting.

The Story Behind Pepsi's Early Marketing to African Americans

The Wall Street Journal today ran a lengthy excerpt from the new book by Stephanie Capparell titled "The Real Pepsi Challenge: The Inspirational Story of Breaking the Color Barrier in American Business." The Journal, which is published by the Journal and Free Press (a division of Simon and Schuster), published the excerpt on the front of its Marketplace section.

Capparell writes that Pepsi hired an all-black marketing sales division to go after the Black consumer market which she reports was valued at more than $10 billion. Her narrative covers the experience and historical significance of this sales team and reports on the ethnic marketing strategies they and the company employed.

She writes, "The mission of the black sales representatives at Pepsi-Cola was to win over loyal new customers - first by making personal appearances, then by placing ads in the black press and setting up displays at mom-and-pop stores in black communities."

The marketing team "visited bottlers, churches, 'ladies groups,' schools, college campuses, YMCAs, community centers, insurance conventions, teacher and doctor conferences, and various civic organizations."

[Here] is a link to the book on Amazon and [here] is the description on the Simon and Schuster site.

I'm excited to be able to alert to this and share it, in the form of a case study, with my ethnic marketing students at Johns Hopkins University.

Pizza for Pesos at Texas Restaurant Chain

In a killer publicity stunt, Texas based pizza shop chain "Pizza Petron" announced it will begin accepting Mexican pesos as currency at its U.S. shops along with U.S. currency.

Pizza Petron launched as the pizza chain that aimed to attract unprecedented numbers of Hispanic American consumers to the popular American food and it has not been shy in trying to attract Spanish-dominant consumers. The company says its stores are "based in Spanish speaking or predominately Hispanic neighborhoods."

The Dallas Morning News reported on the announcement [here].

Ethnic marketing exec Juan Faura, whose book I have assigned in past semesters for my graduate course in ethnic marketing, tells the Dallas paper:

"If you're not in a border town, I don't see the functional benefit," said Juan Faura, president and chief executive of Cultura, a Dallas-based marketing and advertising firm.

He and others saw the program more as a marketing effort than a badly needed service.

"I would see it as a move by the chain to communicate unequivocally to the Hispanic market that they are for them," Mr. Faura said.

"I don't see any other reason for it."

He's exactly right. This is a huge publicity stunt more than anything else. A good publicist might squeeze an extra couple days worth of attention out of this by helping attract a protest outside corporate headquarters or the various store locations. Free publicity can be enormously valuable.

Click [here] for the company's official announcement.

Guess the Quickest Way to Anger Asian American Consumers?

Can you guess the most expedient way Toys R Us could pick to turn off and anger Asian American consumers and other customers?

This is a good one: choose an Asian American for an enormous prize and then revoke the award because her mother is not a legal resident of the United States. Oh and do it a month after opening the first store in Shanghai, China which is in the same coutry where the vast majority of the chain's products are made.

As far as ethnic marketing disaster case studies go, this is one of the best.

Saturday's New York Times has the full story [here - permalink] by immigration writer Nina Bernstein. The Times report - which is accompanied by a photo from the World Journal because the Times could not reach the family - comes after the story hit the bigtime in popular Chinese-language daily The World Journal and made its way around the Internet via a e-mail notification campaign.

Can a major corporation win by being perceived as anti-immigrant? I doubt it, that's why I think this was strange business decision and applaud the Times for reporting on it. By the way, the Times says the winner was a "black American" and that another runner-up mother, whom I presume was disqualified as well, was born in El Salvador.

Southern Blacks in Major Leadership Roles in Congress for First Time

The Wall Street Journal published an article by staff writer David Rogers on Wednesday on "Southern Blacks' Ascent to Top Posts in Congress." Great piece and it's a reminder that a change in the control of Congress not only can shift policies and priorities, but it can also change history. African Americans and Hispanics have great allies and stronger direct representation with this new Congress - and I hope this translates into greater progress on many important issues.

Click [here] for the Wall Street Journal piece.

Historic: First Black Governor in Massachusetts

Deval Patrick was sworn in yesterday as the Governor of Massachusetts. It makes him the first Black to lead the state government and it makes me proud of my home state.

Click [here] for a Boston Globe story on what this means for African Americans.