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The Arizona Republic
Hispanics' Place In The Sun
By Tom Tingle
February 18, 2002
(PHOTO: Yvette Armendariz)
"I believe we need to see a prominent Hispanic business downtown," said Ray Arvizu, owner of the largest Valley agency that focuses on the Hispanic and Spanish-speaking market.
Less than two years from now, when Ray Arvizu moves his advertising agency to the northern edge of downtown Phoenix, he will achieve what he views as a symbolic step.
His building, standing at downtown's gateway at Roosevelt Street and Central Avenue, will speak to the rising importance of the Hispanic marketplace.
"I believe we need to see a prominent Hispanic business downtown," said Arvizu, whose Arvizu Advertising and Promotions is the largest Valley agency focusing on the Hispanic and Spanish-speaking market. "It's a symbol of success."
The latest numbers bear out the market's arrival.
Hispanic purchasing power is estimated to be $600 billion nationwide this year, according to Santiago & Valdes, a San Francisco-based marketing company. That compares with about $200 billion in 1990.
Population also is booming, growing 88 percent over 10 years in Arizona and 58 percent nationally. In 2000, Hispanics made up 25 percent of the 5.1 million people in Arizona.
Cable providers, grocery stores, cosmetic firms and airlines, among others, are trying to gain a larger share of business from Hispanics.
In Arizona, more radio and television stations are beaming Spanish-language shows, and Spanish-language publications are growing.
All of this is proving a boon to Arvizu's business. It's a sharp turnaround from the early 1990s, when the company struggled to make ends meet.
That was after he moved the company from Atlanta to Phoenix. He recalls owing as much as $100,000 in home loans and credit card debt as he worked to get the agency off the ground.
Arvizu reports his 2001 billings will exceed $42 million, up from $22.5 million in 1998. He is drawing some younger competitors, including Grupo Ñ, all of whom seek a share of the $55 million to $120 million spent on Spanish-language media in the Valley.
While still a fraction of the $1.2 billion to $2 billion spent on overall advertising in the local market, it is growing, said Dave Diaz, a principal in the fast-growing Grupo Ñ agency.
Diaz and two others formed the company in 1999. Business so far has been growing 20 percent to 40 percent a year.
"More money is being allotted toward Hispanics. Ten years ago it was, 'Should we do this?' And now it's 'How much are we going to put toward this?' " Diaz said.
But there is definitely room for growth, said Carlos Santiago, Hispanic marking consultant. Companies spend just 0.5 cents in advertising dollars for every dollar spent by Hispanics in the economy. That compares with 3 cents in overall advertising for every dollar spent by all consumers. That translates into a $15 billion shortfall in Hispanic marketing reach nationally, he said.
Joe Ray, of Estudio Ray, which focuses on general market branding, said he's seeing more companies seeking out Spanish influences in advertising and branding. His company, started in 1985, is now also getting more involved with Hispanic marketing.
E.B. Lane, one of the largest advertising agencies in Phoenix, has seen a growing client demand for Hispanic outreach, and is partnering more with Grupo Ñ. Other Hispanic agencies, including Arvizu and Optimo Advertising, have received buyout offers from general market agencies.
Arvizu said even to consider an offer, "it would have to be a very special partner."
Scot Kristal, who heads Optimo Advertising, said he has been approached, but isn't interested in being bought out.
Kristal started his agency in 1989 with a Hispanic partner, whom he later bought out. He had been working for a drugstore company that was planning outreach to the Hispanic market and couldn't find an agency to assist. So he created a company.
Nuances are important because of the diversity among Hispanics; tastes vary greatly.
That understanding is coming through on some levels, said Luis Ortiz, vice president of the Behavior Research Center, which tracks Hispanic media trends.
"There's a lot more work, a lot more energy and a lot more money going into it," he said.