Cultural Segmentation: How to Transcend Translation

Twenty-nine years ago, Alvaro Psevoznik, CEO of DM Agency, was a 19-year-old Argentinian law student, designing flyers for hospitality clients in exchange for admissions into nightclubs. Alvaro found himself frustrated with Argentinian politics – which is plagued with fiscal instability, political corruption, de-motivational handouts for a large percentage of the (unemployed) citizenry, and a cycle of massive financial crises every 5 or 10 years. Alvaro's experience was, no matter how hard one worked and saved, bank accounts could disappear overnight. This constant uproar, Alvaro says, makes it hard for people in South American countries to plan and work toward a future.

Alvaro moved to the U.S. in 2002 and went back to hospitality marketing. He claims that early adversity provided lessons that helped him survive the 2007-2008 recession (which closed some of his small- and mid-sized clients' businesses) and prepared him for today's Covid-19 challenges. In this interview, Alvaro talks about the importance of positive messaging, adaptability, and being "transparent" when faced with crises. He emphasizes that changing Covid-19 "rules" requires fast response.

Today, DM Agency is a comprehensive, full-service, one stop shop for digital marketing solutions. Alvaro explains that there are costs associated with trying to provide a wide range of client services—you either risk people discovering that you are not as "good at everything" as you claimed, or you find yourself supporting an expensive, diverse "stable" of top talent in order to be able to "deliver." If he were to start over today, he says he'd focus on specific industries and doing only what he was best at doing – lead generation through online advertising.

Most DM clients are restaurants or hotels, but DM has also started to expand into the Esports -- organized, online, multiplayer video game competitions that produce $2-3 billion a year through advertising and sponsorship. Esports, Alvaro says, is huge. DM has virtual offices concentrating on Esports in Chile, Argentina, Colombia, and South Florida. Alvaro has created "splinter" agency entities – pretty much the same staff/different "labeling" – that focus on specific unrelated industries in order to avoid such questions as, "What would a restaurant marketer know about marketing windows?"

Agencies often advertise that they are "bilingual. Alvaro says that DM is bi-cultural. Speaking Spanish is different from thinking in Spanish or Latino. DM understands that the Spanish community in the US is not a homogenous group – the culture of origin varies significantly by geography across the US. The agency divides Hispanic marketing into four regions: Mexico and North America, Central America, South America, and the South Florida Cuban community.

Aside from South Florida, how do cultural differences play out across the United States? New Jersey, New York, Chicago have strong Puerto Rican communities with some Mexicans and Dominicans. Mexicans as a majority are located more on the West Coast – Arizona, Texas, and California. Because the words, the accents, the thinking patterns, and the cultures in each community are different, marketing needs to be different. Alvaro hires Hispanic staff that mirrors each targeted audience – so the messages "rings true." Google translation does not work. Neither does human translation if the culture, vocabulary, and thinking patterns of the translator are not the same as those of the target audience. Authenticity cannot be faked.

Alvaro can be reached on his company's website – DM agency, as in digital marketing agency – dmagency.us

Transcript Follows:

ROB: Welcome to the Marketing Agency Leadership Podcast. I'm your host, Rob Kischuk, and I'm joined today by Alvaro Psevoznik, the CEO of DM Agency based in Hollywood, Florida. Welcome to the podcast.

ALVARO: Hey, Rob. Thank you very much for having me.

ROB: Yeah, absolutely great to have you here. Why don't you start off by telling us about DM Agency and what makes DM great?

ALVARO: DM Agency is the conclusion of 29 years of evolution, learning, growing, going back to small – especially after this pandemic – making mistakes, and many other things. Fortunately, good things, I'd say. When I was thinking, "What makes us different?" I said, "Too many things." But I want to put in three things.

Full service – I mean we offer for real a full service solution, a one-stop digital marketing solution to our clients. We can help most industries, but we realized a few years ago that we are really good and we have a lot of experience with hospitality. Mostly restaurants and some hotels. Now we're stepping in the Esports niche and we are doing really good things in that niche.

We are a bicultural agency. It doesn't mean that we are bilingual. You can have anybody in your company speaking Spanish but thinking in Spanish or thinking in Latino is a very different thing, and we are different because of that. We've got this mindset and we understand the Latino community, the U.S. Hispanic community – which is not Mexicans only, like a lot of marketing managers or marketing directors think.

These are the three things that make us different than most of the other digital agencies that I see in the market.

ROB: That's fascinating, especially with that "not bilingual, but bicultural" distinction there. And for certain, the U.S. Latino population is not homogeneous in any way. How do you even think about bridging the gap? Because you could even get into many, many cultures beyond the Latino community. How do you find that messaging that transcends maybe some of the different cultures? There are different countries, and each country is different. We think our country is different; you mentioned you're from Argentina. Argentina is different from Mexico, Mexico is different from Cuba, and on and on and on. How do you balance it? Because obviously, many marketers are not going to go in for a 20-culture campaign most of the time.

ALVARO: Yeah. It's not a 20-culture either. Mostly we divide Latin America when it comes to marketing let's say into four regions: Mexico and North America, Central America, South America, and there's a fourth one that applies mostly to South Florida, which is the Cuban community. When we build content for South Florida, where you also have Dominicans and you've got a lot of Mexicans as well and you've got a lot of Venezuelans and Colombians, the job is a little more difficult. But since most of the community are from Cuba, we focus on Cuban-oriented content. We're used to it. I moved to Miami 18 years ago, and the first thing I heard in Spanish was a Cuban accent and Cuban words. So, we got used to it.

New Jersey, New York, Chicago is a different thing. You've got a lot of Puerto Rican community mixed with some Mexicans and Dominicans. So, the message is different, the words are different, the accent, if you do some video content, is going to be different. And then you've got the Mexicans, which are located mostly on the West Coast – Arizona, Texas, and California, of course. The message is not that complicated when you have to target these audiences.

Now, I was talking about accents and words; there is also a cultural thing that you have to consider when you are building a message. These days we are focused mostly on digital and mostly on social media. I don't want to go deeper into this, but I'm going to just give you a quick example. When we build a campaign for the West Coast, when we know that most of the audience is first, second, and probably third generation Mexicans, we hire Mexican copywriters, Mexican voiceovers. We adapt the message to the community or to the target audience by using people with the same background.

We do the same thing here in Miami and South Florida, and we apply the same system in other markets, and it works pretty good.

ROB: It's sensible, but it would be completely opaque to somebody who didn't know how to break it down so clearly into four cultural segments. I think that's really, really fascinating there.

I want to highlight also something you mentioned about your tenure in the industry. We are here – I don't know where we are in the midst of this COVID thing anymore. Are we in the middle? Who knows? But it is August of 2020. With your time in the industry, this is not the first set of economic headwinds you've seen where you've probably had clients react, you've had to think about changing tactics, changing messaging. How many times would you say you've navigated business through a downturn at least kind of like this?

ALVARO: I'm laughing here because it was more than once. [laughs] Going back in the day, I started 29 years ago, when I was 19. Argentina is a market that goes up and down every 5 to 10 years. You've got a huge crisis every 5, maybe 10 years if you're lucky. So, I've seen a couple of crises in the market.

But moving forward to the States, I had to deal with the 2008-2009 crisis. It was not only a recession; it was a huge crisis. I remember a lot of my clients went out of business. They just closed their doors. We had to downsize our company and adapt the message. Back in '08, it was the beginning of social media, and we were exploring that niche and that industry. I remember that we had to adapt the message to something very positive. People were doing really bad in those days. A lot of people lost their homes, lost their jobs. That was a huge impact, especially for mid-size companies and small size companies back in the day.

The way we did it back in '08-'09, and now because of the COVID situation, was being very transparent. You've heard, Rob, this message, "We are in this together," and it's true. We are in this together. At some point we were so tired of reading and listening on the radio, "we are in this together," but at the end of the day, we have to adapt to the situation and understand that there's a lot of last-minute changes to do in your communication in businesses.

I'm going to give you a quick example. We work with a lot of restaurants. Here in Miami, we got a lot of back and forth with regulations after COVID. "You can open up to 50% of capacity"; 48 hours later, they closed the restaurants again. It was chaos. We had to adapt to that.

I feel the frustration of every restaurant and hotel owner, and I also understand, and my people understood, the frustration on the other side – customers, making plans for a wedding, for a bar mitzvah, for a vacation, and being frustrated. This is when we as an agency had to adapt our message and be very close not only to our clients, but to their customers as well.

ROB: You mentioned a greater frequency of downturn in Argentina. For those of us who are not from that orbit, what's the difference maybe between the occasional big messes we have here, and it sounds like a more frequent – is it even more expected, perhaps, in Argentina?

ALVARO: Yeah, the biggest word that synthesizes everything is corruption, like most countries in Latin America, some countries in Africa. Argentina is a big country. It's a rich country with poor people and rich politicians. I don't want to make this interview a political message about Argentina, but I think it's the situation that a lot of countries in Latin America have to deal with. Something worse than Argentina is what happened in Venezuela in the last few years. You've got a huge percentage of the population below the poverty line.

In Argentina now – we used to have a populist government that gave all kinds of food stamps and all kinds of help to people. At the end of the day, you've got a government that is supporting a lot of people that are not working. A huge percentage of the population are not working because they get a check every month in the mail. That's what makes Argentina a country that doesn't give you the chance to plan long term.

That's one of the reasons I decided to move to the States back in 2002 and start from scratch. I remember December 2001, the government froze everybody's bank accounts. Business and personal accounts were frozen. If you had $100, you were done. If you had a million dollars, "I'm sorry, but it's in the bank. We don't know when we're going to return that money."

That's why when you move and you start doing business in markets like the U.S. market, it's a completely different thing. You can plan ahead. Even if you get a pandemic, even if you are in the middle of this situation that we were talking about in 2008-09, the recovery is much faster than any other country I would say probably in the world. That's one of the things that I love about this country. We can recover. We will recover. And this is not a political statement. It's a fact. We're going to recover sooner than later.

And I agree with you, we don't know when this pandemic is going to stop, when the effects of the pandemic will cease. If the pandemic probably stops, I don't know, in November – I don't think so, but let's say November – but the effects are going to be long term, especially in a couple of industries that I have to deal with: hospitality and tourism. It's going to be really, really hard.

ROB: Yeah, restaurants may not be the same for a while. But there may certainly also, I think, be fresh opportunity for the ones who really iterate on their model. I appreciate the broad perspective you bring on Argentina and those differences and the downturns that you see there due to corruption. I don't feel like it's political. It is certainly helpful.

I do want to take a turn towards some of the aspirational things you have going on in your world. You mentioned when we were talking beforehand that you have not just DM Agency, but you have a little bit of an empire growing. Tell us about the sister/sibling agencies that you have to DM and the broader marketing ecosystem that's on your mind on an average day.

ALVARO: Empire is such a big word but thank you very much. I like it. [laughs] When I was doing this in Argentina during the '90s, my first customers were restaurants. The work that we were doing was really good. I had no marketing education back in the day; I was just a law student designing flyers to get free admissions into nightclubs and free drinks. Our first customers over there were restaurants. So, when I started again my business, now in the United States, back in 2002, my first customers were restaurants.

A few years ago, I realized that half of my clients were in that niche and the other half was getting confused. "Hey, you're working for a lot of restaurants, and I sell impact windows and doors," which is a huge niche here in South Florida. "I don't trust a guy that works for restaurants to reach people looking for windows." I realized that I needed a second brand.

It's not a second agency; it's almost the same team except for a couple of professionals that are focused, like myself, in the food and beverage industry. We created Foodie – which is a social media term that came out a few years ago – we created Foodie Restaurant Agency, basically offering the same services, a one-stop shop of graphic design and branding, social media, Google ads, Facebook ads, reputation management – which is very important for restaurants these days.

Then, with a couple of partners, and after getting a couple of licenses to operate in Latin America and the U.S. Hispanic market, we started a third brand called EsportsHQ. As you know, Rob, Esports is a huge $2-3 billion a year industry when it comes to advertising and sponsoring.

That's basically one big team under the DM Agency umbrella and a few small teams specialized in restaurants for the Foodie Restaurant Agency and Esports for the EsportsHQ Agency. That's how I distributed my team and our marketing. When we have to market ourselves to restaurants, we go as Foodie Restaurant Agency, and the same thing with the Esports agency.

ROB: When did you start in Esports?

ALVARO: We started back in October 2019. A friend of mine who works in a big company told me, "Hey, there's something big called Esports." I said, "That's gaming. That's what my son does when he's bored." He told me, "It's way more than that." He introduced me to the industry, and he told me there's a huge opportunity for the U.S. Hispanic market.

As you know, there are two budgets. A national company is going to have two different budgets – when it comes to advertising, I mean: one for the general market and one for the Hispanic market. When it comes to TV, for Univision or Telemundo or all the radio stations in Spanish. That advertising money comes from a separate budget.

So, he told me there's a huge opportunity for the U.S. Hispanic market and also for the Latin American market. I couldn't do it by myself, so I invited him to join me. I got a couple of customers in Colombia and in Argentina, and we started this company, EsportsHQ. Because of the pandemic, some things were a little delayed, but so far we've got virtual offices in Chile, Argentina, Colombia, and here in South Florida.

We are closing a couple of deals for Q4 and Q1 2021 with big brands that understand that you've got a huge number of gamers, but you have a much bigger, way bigger, number of viewers. There's a lot of people that, instead of watching TV or watching a movie on Netflix, they are watching games now. Instead of a football game or a soccer game, they are watching people playing Fortnite or League of Legends, and there's a huge market over there, and we are after that.

ROB: I was going to ask what the key games were right now. League and Fortnite. And then what is the marketing opportunity? Are they sponsoring teams? Are they sponsoring streaming broadcasts? What is the advertising opportunity?

ALVARO: They are sponsoring everything. There are brands sponsoring teams. They're sponsoring players. I always use this analogy with soccer, which is my favorite sport. Or basketball. You as a brand sponsor a team. You can sponsor a player. Let's say Adidas. They are sponsoring soccer players with their shoes or their clothes. You can run ads during a game broadcast. You can place ads on the commercials. It's the same thing on Esports. When you are a sponsor, you can put your money in all of these different fields.

That's what we are doing with a couple of companies we're dealing with. They are going to sponsor a team that is huge in Mexico. They won several tournaments all over the world. They are going to sponsor and buy airtime on Twitch, which is the most relevant platform for gaming. They also want to have their own tournament, to be not the sponsors of the tournament – the owners of the tournament. This is how big Esports is becoming these days, Rob.

ROB: Wow. When you get into it, it sounds more like sports than you would ever imagine, even all the way down to the equipment. I have a friend who's been running a company for a while called Control Freak, and all they make is add-ons for video game console controllers to make you better at playing Esports. When he first told me, I thought it couldn't possibly be a business, or a good one, but it certainly has been for them. It's a big, big ecommerce business.

ALVARO: It's a big, big business. A few months ago, we were writing down a list of everything that is related to Esports, and I think we got like 95 or so different things, from sponsoring a game to mousepads. I'm serious. Mousepads, keyboards, headsets – you name it. There's opportunity for every single industry in this niche. Like I said, it's between $2-3 billion a year on advertising only. You didn't hear that 2 or 5 years ago, right? This is huge right now, Rob.

ROB: Wow. I heard it from your mouth, and I believe you. Alvaro, when you look at the time you've been in business, you've got a good bit of experience. What are some things you might do differently if you were starting over today? Not that you would want to do that; I'm sure you've earned what you've earned.

ALVARO: We are a full-service agency, so we've got all kinds of services. If I could start over, I would focus on two or three. I can't do it now because most of our clients like us because we give them everything under one roof. I could say now a virtual roof. But we give them a one-stop solution, so it would be really, really hard for us to change that.

But if I could do it from scratch, I would say "I want to be the best on this or that service. If you need those other services, we can introduce you to our strategic partner or we can refer you to somebody else, we can work with your agency for this or that service." That's one of the things that I would change if I could.

One of the learnings that I have and I'd like to share with everybody is focus on one or two niches. I know we can do ads for window specialists, we can do random campaigns for dentists, jewelry stores, liquor stores, hotels – at the end of the day, it's so complicated because they are so different. Those industries are very different from each other. Even if you use Google ads for all of them, even if you post on Facebook for all of them, the industries are so different and the audience is different.

So, one of the things I always tell my colleagues – even we were talking earlier about my presentations at some universities. One of the things I told one of the guys that was starting his agency at the age of 22, almost the same age I was when I started back in the '90s, is by showing that you know everything and you can do everything, you won't keep a customer. You may seduce the customer. You may sign the customer. But in a 3-6 month period, they're going to realize that you are not good at everything.

Or, like in my case, we pay a high price to be good at everything we do – because we are good at branding, at social media, at reputation. The high price is that I have to have very expensive human resources to have the best people on each different department.

So, make it simple. Focus on one, maybe two services that are related to each other, and keep it there. You're going to do great. That's what I would do if I could do it again.

ROB: Where would you focus today and why?

ALVARO: That's a good question. I wasn't ready for this one, Rob. [laughs] I would focus on lead generation through online advertising. I would leave social media – of course, I would use social media as an advertising platform, but I would leave social media content and engagement, reputation, web design, I would leave everything out of the picture if I could. I think this is where I would focus.

ROB: What's appealing about those particular areas right now? Is it you know how to find the expertise? Is it opportunity to differentiate in those areas?

ALVARO: I think as an agency owner, it's a very good source of income. When you bring your customers solid and qualified leads to their businesses, they pay very well. They don't mind paying. The reason I would do that only is because of the good income that I would get from that.

ROB: Got it. So, at this point, you know what the margins are in different lines of business; you know if it's just creative, do people know how to pay more for that? Maybe they don't. But they definitely know how to pay for twice as many leads.

ALVARO: Yeah. When you bring value to your customers, they don't mind paying. A very good lead and a qualified lead is value. That's what they need. Out of the restaurant industry, of the few customers that are not in that niche, we work for a company that sells and installs impact windows and doors. They were struggling with three or four different agencies, and the problem was that – yeah, the signs were nice, the website was cool, everything was okay, but they were not getting leads.

When they came to us, they said, "Hey, we like everything that we got, but we have zero leads. Nobody calls our phones. What can you guys do?" So, we took over the account. That was almost 4 years ago. We built a strategy for them, and we understood where the problem was. I don't want to go deep into that, but the thing is, we created a strategy, we understood the problem, we did our market research to understand the industry because we were not familiar with that niche, and it's been over 3 years that we are bringing results to these guys.

What do I mean by results? Leads. The website is there. It's cool, it's nice. The designs are nice. The content that we put for them on social media is okay. But they are getting the leads they're after. And especially during this pandemic, when everybody was downgrading their budgets, I told them, "Hey, do what I'm doing with my agency. I doubled my advertising budget. You do the same. If it doesn't work out, I don't know how, but I'm going to pay you back."

So, these guys went from around ten grand a month to $22,000 a month, and guess what? It paid off. They had to hire more people to work for them. It really worked. So, lead generation, when it's done in the right way, with a strategy and understanding the market, understanding the culture – because by the way, we did campaigns in Spanish and English. Not only translated from English to Spanish, but talking to people in their language, not doing just a translation. You know what I mean.

ROB: Yeah, I get it.

ALVARO: It works. When you understand the market and you tell them what they want to hear, and you come, of course, with a good offer, like affordable windows and doors, there's no doubt that it's going to work out.

ROB: It probably felt like a disadvantage for a while, but such an advantage now, coming from your own background – you're here and you can find people with an expertise in the American market any day of the week, but to find people with expertise in the Latino market that want to work for someone for the right reasons, you have that credibility naturally. I'm sure it's a hiring advantage.

ALVARO: Yeah, it is an advantage, and our customers – I am so thankful that they understand that we are not just a translator. You can use Google Translate. I've seen actually a lot of things in Spanish that were translated with Google Translate or from somebody who speaks Spanish in the office, but it's translating. It's not creating the content in Spanish and for that market. It's a huge advantage, definitely.

ROB: Fantastic. Alvaro, when people want to find you and the DM Agency family, where should they go to find you?

ALVARO: Very simple. DM, as in digital marketing: dmagency.us.

ROB: Excellent. Thank you very much for joining us today and sharing your broad journey and experience across bicultural marketing, Esports, hospitality, and so much more. It's quite a journey.

ALVARO: Thank you, Rob. I really appreciate it. I enjoyed it, and I hope we can do this again in the future.

ROB: Sounds great. Let's find a good time. I'll catch you soon. Be well.

ALVARO: Thank you.

ROB: Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.