Summary
Hispanics are a critical target for US marketers in coming years. They are growing in size, influence, buying power, and have a young audience that is just entering their high earning and spending years. This target will have to be handled differently than a typical US target, as culture plays a bigger part in their lives. Language will be more important even as most will have English language skills. And yes, they are wired! However complex, the numbers will make it worthwhile.
Analysis
The Adweek article touches on the increasing importance of Hispanic market in the US. It focuses mainly on shear size. This is an important fact and numbers are continuing to grow. But if we look more closely at some of the details that make up those numbers, we gain a better understanding of the uniqueness of this market.
According to a report sponsored by the MacArthur Foundation in 2007 on Young Adults in the US, one of five young adults today (ages 18 - 34) are Hispanic and 80% are either 1st or 2nd generation. This shows a stronger connection to the recency of their migration than with most other ethnicities. Hispanics are clearly second to whites and their numbers are growing. This strong and close connection to their cultural base is what is believed to tie them to their language, their music, their strong cultural needs and wants.
Generally, Hispanics in the US are younger than the average American with an average age, according to Forrester, of 27 compared with 39 for the total US market. According to a Forrester Report, Hispanics as a group wield huge buying power - in 2008, $951 billion in disposable income. Forrester estimates this number will grow to $1.4 trillion by 2013. Millennials (18 - 30) have spending power today estimated to be over $200 billion. Furthermore, they are estimated to overtake Baby Boomers in a few years. HIspanics, as stated above, make up one in five of this group. This category is a highly coveted target because they are entering their high earning and spending years.
Hispanics are one of the fastest growing segments to get wired. They have followed behind the total US market. Many believe this has been because of Spanish language sites. 50% of the Hispanic market in the US are English dominant or bilingual. So 50% are Spanish dominant according to another Forrester report. Neilsen reports that even though there is strong bilingual switching in broadcast and print, recall rate of the brand and message is 30% higher for executions in Spanish.
Even as the Census gears up to measure or validate this market, advertisers are way ahead. While advertising overall slowed in 2008, according to Neilsen online the Spanish sector increased 3% posting gains across every major product category with the exception of automotive. Spending within the top 10 Spanish language product categories grew by 8% to $2.9 billion. And perhaps most interesting is that the fastest growing categories reflect the rising digitization of the Hispanic community - satellite communications, for example, grew 124%.
Part of the success of Spanish language ads may be that networks are more frequently offer increased ad frequency, reduced clutter, lower DVR penetration (this may change over time). The ads are considered more friendly and according to Neilsen, those created specifically for the market rate higher because they appear to be more culturally relevant and hit cues embedded in the advertising such as characters, music and themes.
The bottom line is that this is an important market and one that is going to become even more important. They are young, growing, have buying power. They are more optimistic than the rest of the US. They are culturally more connected to their heritage and this matters if a marketer is going to make a real connection. The Census should only validate the work that others like the MacArthur Group, Forrester and Neilsen have done to quantify the potential.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
