The rapid growth of the Hispanic American consumer segment has been widely discussed over the last few years. It started well before the 2010 Census, which revealed that Latinos in the United States had grown by more than 27 million or nearly 10% during the first decade of the new century. This growth has certainly caught the attention of chief marketing officers at major corporations, advertising executives, search engine optimization experts, and other marketing professionals who are scrambling to tap into this burgeoning consumer group.
Targeting the Hispanic American market in the U.S. presents a series of challenges. The results of the 2000 Census were certainly eye-opening since the purchasing power of Latinos was estimated at $500 billion back then. By the time the 2010 Census data was compiled and presented, a Nielsen report mentioned in The National Journal indicated that the purchasing power of Hispanic Americans had grown to $1 trillion in 2012. Targeting a rising population that is increasingly becoming affluent should not be a problem for marketers who have access to unlimited resources, but the reality of budget apportioning and return on investment must be given serious consideration.
There is plenty of information with regard to market intelligence and research into the consumer sensibilities of Hispanic Americans. The time is ripe for discussing some of the most serious issues that come into play when planning multicultural marketing strategies:
Today, we will focus on the first point: Budget Allocation.
Advertising and Marketing Budgets
Products or services that have wide appeal across the demographic spectrum should be marketed adequately. With regard to budget allocation when it comes to marketing to Hispanic Americans, business owners and executives should first take a close look at the products or services they offer and where they offer them.
The budgets should be allocated according to the demographics of the target market in question. If your market is Florida, California, or Texas, for instance, Hispanics account for more than 50% of all the population. If you are providing a service catered specifically to Hispanic Americans, maybe a regional approach where you target all Top Hispanic metropolitan areas in the nation would make a lot of sense. The states that have a population of 1 million or more Hispanic residents are Arizona, California, Colorado, Florida, Illinois, New Jersey, New York, and Texas.
Download data on 2011 Population Estimates State Characteristics: Population by Race and Hispanic Origin (source: Pew Hispanic Center).
Hispanic Americans make up approximately 16.7% of the U.S. population. Since Latinos are a growing segment, it makes sense for business executives to allocate a few more dollars of their marketing budgets when targeting Hispanic Americans. According to the Association of Hispanic Advertising Agencies, the top 500 advertisers in the U.S. utilized 5 to 6% of their budgets when targeting Latinos, more than 10% lower than the actual demographic presence.
I am interested in hearing what you think about Budgeting for Latino Marketing campaigns.