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.

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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."