LatinWorks’ Alejandro Ruelas (CMO and managing partner) and Manny Flores (CEO and managing partner) are ready to talk about almost anything.
Turning an idea written on a bar napkin into a multimillion-dollar corporation
They’ll talk about the friendship and the strong company they’ve built together in the 20 years since they founded the LatinWorks advertising agency and how, at the time, it was a first-of-its-kind creative shop targeting the emerging market of Hispanic consumers.
They’ll talk about their successes: landing business from Southwestern Bell/SBC, Anheuser-Busch, and Miller Lite early in their founding; creating a highly acclaimed Super Bowl commercial for Bud Light in 2007 that became the talk of the advertising industry; and how their agency has gradually grown beyond its initial culturally specific roots to the extent that it’s now able to handle all advertising needs for big clients such as the Texas Lottery.
But the one thing they won’t share — not yet, anyway — is the new name they’ll unveil for the agency at some point this spring, when the LatinWorks moniker will become a thing of the past.
It’s a huge change for the 75-person agency, which reported $18.5 million in revenue in 2017, according to Austin Business Journal data.
Leaving behind a specific niche and community in the changing advertising world looks to land awfully heavy on the first side of the risk/reward gamble. A new, broader-appeal name means potential clients are less likely to look past the agency as a “not for me” afterthought, with new business opportunities opening up as a result. But gone is the specificity that comes with serving an easily identified market, one that is only growing in its purchasing power and becoming more sought after by global brands every day.
It’s natural to wonder, “What are they thinking?”
We asked them that, and they were ready to talk about it.
THE BEGINNING
There were some early flickers and sparks, but LatinWorks truly came to life the same way many good ideas do, on a napkin in a bar.
The bar in question was in France, where the eventual business partners were spending a few weeks in 1998 working on a promotional campaign based on soccer’s World Cup. Ruelas was the director of multicultural marketing for Anheuser-Busch, where Flores was firmly entrenched in marketing development and was very much not looking to leave his stable corporate job to pursue a new venture.
But an idea Ruelas approached him with stuck: Why should they remain on multicultural advertising and marketing projects that were ancillary to the giant company’s business when plenty of client companies wanted the tap into the economic might of the growing Hispanic population in the United States?
“One day, well before the napkin sketch, Alex walked into my office, closed the door, and he said, ‘Have you have you ever thought about like doing this on our own.?’ I immediately shut down the conversation,” Flores says. “I had a firm position, I was very close to the Busch family, and I worked for August Busch — before for directly. I said, ‘How can that idea come into your mind?’ This is the greatest American marketing company in the world.”
What was driving Ruelas was an instinct that would later be verified by the 2000 U.S. Census: The broadly defined Hispanic population in the United States was the largest minority population in the country, with a rate of growth that was going to add to its prominence in the business world.
Ruelas says another motivator for branching out on his own was dissatisfaction that his creative ideas and strategies weren’t being employed more broadly (i.e., not just to sell beer).
“A lot of the agencies we were working with, and working on multicultural marketing — there became a pattern where I was the one coming up with the ideas and having to execute them,” he says. “It became clear to me there was something wrong with this picture because I wasn’t a creative guy in the advertising sense. I tended to be more about strategy, account management, and, in those days, I was more of a big picture thinker and the ideas themselves were not my forte. But now I’m the one giving them the ideas and that felt wrong.”
Following the French bar napkin session, the two founders exited the confines of Anheuser-Busch in the fall of 1998 and set up shop in Austin along with Chief Creative Officer Sergio Alcocer, who left the company in 2017 to launch his own agency targeting cultural activism.
Work for Beech-Nut baby food of Ralston Purina got the company off to a quick start with close to $1 million in revenue, before major contracts for AT&T and other Fortune 500 companies at times pushed the agency’s employee headcount well over 150. Armloads of awards from Ad Age, Adweek, and other industry leaders validated their creativity and strategic approach, as did the buzz over the Bud Light Super Bowl ad, which featured comedian Carlos Mencia teaching a classroom full of non-English speakers how to ask for the beer.
When the Omnicom Group media company bought a minority stake in LatinWorks in 2006, it put the agency in the same position as global giants in the field, including Austin-based GSD&M. The company was firmly established, and it seemed there was nowhere to go but up.
But there were questions — and changes — ahead.
LOOKING IN THE MIRROR
Alcocer, who remains in Austin leading his Rest Of The World agency and who is still in close communication with his former business partners, says the partners had the first conversation about changing the LatinWorks name in 2007 because of concerns the agency’s offerings to clients had outgrown the cultural identity that was starting to pigeonhole it and limit its potential customer base.
The industry was also in the early stages of the digital and social media upheaval that would fragment audiences, reduce the effectiveness of mass media, and make it so that simply communicating to Spanish-language audiences was no longer a one-size-fits-all solution for capturing the Hispanic market.
“Globally, the advertising industry has been looking for 10 years for a new agency model,” Alcocer says. “Ad agencies all over the world need to rethink how they work, what value do they add to clients, how do they restructure after the now 12-year-old social media revolution? After all of that, agencies needed to restructure because people do not communicate with advertising in the same way. You cannot be a generalist anymore.
“At the same time, the use of Hispanic media and focus on language is not what it used to be in how to reach that demographic. Your target is no longer the safe bet that it has been for the last 30 years. All of that implies that you need to change and move.”
The debate over the name and the agency’s future — with Ruelas and Flores still involved but also in the third act of their careers — continued through the years, until finally last year the decision was made.
LatinWorks will be no more. What comes next will be guided by the belief that businesses in 2019 and beyond need to speak to customers through what Ruelas calls “shared mindsets,” or the common behaviors and beliefs that span across different ethnicities, ages and other demographic barriers. He said the company has already been operating that way for years, meaning the new name will simply drive home the business practices that are already firmly in place.
“In the past, we used to target Hispanics on the basis of ethnicity, but we started believing — and did research to prove the point — that the best way to market to the new consumer mainstream is by focusing on mindsets, because those are fairly shared,” he says. “Today, you can argue that whether you happen to be Anglo, mainstream American, African-American, Asian-American, Hispanic, whatever, there is a lot more in common today with all of those groups than 10, 15, 20 years ago. The implications of that change are fairly profound.
“Our name when we started out was anchored in the Hispanic universe. As things have changed over time, our name clearly started to paint us into a corner that was not necessarily the reality of what we were doing.”
THE NEXT PHASE
Flores, in his customary straightforward way, admits that the company had slipped in recent years.
“About a year-and-a-half ago when we really started talking about this, you see we got a little complacent,” he says. “Naturally, companies get resistant to change, but we knew that we had to change. When you’re running fast, running real fast, and run faster, but you’re still standing still, that’s an indication that you have to change. And we were unable to win a lot of the important pitches for new business that we were pitching.”
Flores drops a lot of laudable fuzzy “i” words — integrity, innovation, insights, inclusion — to describe how the renamed LatinWorks will work to set itself apart from its competitors in an industry that is in seemingly nonstop motion and turmoil.
He wants the new LatinWorks results to speak for themselves when it comes to getting and keeping business, pointedly offering, “If we’re not solving your business issues and bringing you creative solutions, then we shouldn’t be your partner.”
“As you look at this new organization with these solid values, I believe — I believe — the change will speak for itself. It is a transformation, and transformations are not easy. Only a few who consider it really embrace change, and, while it’s going to be difficult, I think it’s going to be very worthwhile.”
From the outside looking in Duff Stewart of GSD&M on the challenges of renaming and rebranding
The Austin advertising community will be watching to see how LatinWorks evolves and performs after Alejandro Ruelas and Manny Flores announce the agency’s new identity. LatinWorks has been a key piece of the local creative scene for two decades, and moving away from a name with such a distinct identity is a move that comes with some risk.
Someone who knows about the motivation and challenges of rebranding an advertising firm is Duff Stewart, the current CEO of local ad giant GSD&M. In 2007, that agency changed its name to Idea City, a well-intentioned change that was dropped after only a couple of years because the company’s founding values and identity were the same and still viewed favorably by clients.
Stewart said the new name just brought confusion.
“At the time, it seemed clients were looking in many new places to get ideas,” Stewart says. “With GSD&M, we could change our name, but at the end of the day we’re about ideas that make a difference. That remains true because the company is founded on core principles that you hold dear and are willing to be penalized for. In our case, we changed the name, and the market didn’t want to go with us.”
Stewart said the track record that LatinWorks has established over its 20 years demonstrates that Ruelas, Flores, and their employees have the creative talent to execute in a broad selection of markets, citing their partnering with GSD&M on work for Marshall’s and Radio Shack and a bid the companies made for the 2010 census campaign as examples of the versatility they’ve shown.
He said that skillset makes changing away from something so culturally specific a smart decision to appeal to a broader range of clients and opportunities.
“LatinWorks as a name is pretty specific to the marketplace they were playing in. I’m guessing as they evolve, they don’t want to be pigeonholed by being LatinWorks when they’re doing more things that are not specific to that,” he says. “As long as you’re delivering what you say you’re delivering and meet your client’s expectations, I think a name can be supportive but it won’t determine whether you get the clients or not.”
Asked if a name change needs to be accompanied by a prominent new client, Stewart says what’s most important is communicating the values the company stands for and how it can make a difference in growing business for everyone it works with.
“Clients want agency partners that know their business, know their customer and their brand better than they do, and they’re delivering ideas that can drive their business,” he says. “The name on the door is less important. It’s more about ‘Where are they taking us?’ and the brand leadership and thought leadership that is driving the business. At the end of the day, clients knock on our door because they like our reputation and they’ve seen the work we’ve done for other clients and they’d like to see if we can help them in similar ways.”
Written by Chad Swaitecki
