Commentary

Why Most Marketers Are Not Ready To Go Total Market Or 'Cross-cultural'

Most marketers are behind when it comes to investing in the Hispanic market. Of the $171 billion spent on paid media in 2013 (according to eMarketer), Hispanic media spending totaled just $8.3 billion (according to Kantar and Advertising Age). Hispanic media spending represents less than 5% of total paid media spending, while Hispanics represent 17.1% of the U.S. population. While paid media doesn’t capture the entirety of marketing activity targeted to Hispanics, it provides a good barometer.

What’s lost in this data is the fact that a small number of companies, in a few industries, is driving most of the Hispanic marketing activity. A 2010 analysis by the Association of Hispanic Advertising Agencies (AHAA) of the top 500 U.S. advertisers created rankings based on the level of Hispanic advertising budget allocation in 2009: Best-In-Class, Leaders, Followers, Laggards and Don’t-Get-Its. More than half of the top 500 national advertisers – 279 – fell into the Don’t-Get-It category. When aggregated by the top 50 industries in terms of Hispanic spend, only 14 (or 28%) ranked “Best in Class” or “Leader.” Major “Laggard” and “Don’t Get It” industries (which we will collectively call laggards) included electronics, pharma, health insurance, and financial services. While this data is a few years old, Hispanic media spend has only increased by 4.2%, indicating very little change in these industry dynamics.

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With all the recent talk among marketers around the concept of “total market” and “cross-cultural” approaches, a natural question arises: Should companies in these laggard industries leapfrog the traditional multicultural marketing approach and start to embrace the total market approach? 

The problem for these laggards and new entrants is that a total market approach is complex and a more advanced approach to cultural marketing. As Arturo Nava stated in his recent article, new models like total market are complex. He states this complexity is keeping CMOs from investing more in Hispanic marketing. I think most CMOs realize they are not ready for such advanced cultural marketing models.

Total market, and the cross-cultural model I so passionately promote, requires Hispanic market considerations — including deep consumer insights, market dynamics, etc. — to be well defined, relentlessly updated, and ultimately integrated. This emphasis on multicultural consumers must occur from “inception through the entire strategic process and execution” as eloquently stated by AHAA in their “Total Market Roundtable” report. The limited Hispanic investment activity over the last three to five years indicates that most companies are not ready to implement a total market approach, let alone a cross-cultural model.

Tried-and-true multicultural marketing is the way to go for most industries

A total market approach is akin to a more advanced, nuanced and complex approach to reaching Hispanic and other ethnic audiences. It requires a solid base of multicultural structures, processes and insights that most companies do not have. However, beyond structural challenges, the other fundamental issue with most industries taking such an approach is that it would not help them reach underserved Hispanics. It would only incrementally increase sales with new Hispanic consumer populations — those not otherwise reached with general market ad spend. 

While I am a strong advocate of the cross-cultural approach, it doesn’t make sense in the case of laggard industries. Most laggard Hispanic marketers can benefit from the incremental revenue opportunity of reaching underserved Hispanic consumers in a highly targeted way. While there are clearly opportunities for these laggard marketers to take a more cross-cultural approach to their general market advertising, the biggest opportunity continues to be investing in multicultural, targeted Hispanic-specific marketing programs.

Total market and cross-cultural marketing is an enterprise process

Should most industries therefore ignore these advanced models? Definitely not, but they should take a long-view and enterprise approach. It takes a while to put in place the people, products, processes and insights to take a true total market approach. Multicultural marketing is a building block that can start companies down the path towards a longer-term, enterprise-wide total market effort that goes beyond just marketing.

3 comments about "Why Most Marketers Are Not Ready To Go Total Market Or 'Cross-cultural'".
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  1. ARTURO NAVA from Logra Tu Dream, November 6, 2014 at 7:22 p.m.

    Great article Jose ! agree with your point of view. Most companies are not ready for the complex total market/cross-cultural approach. As you mention they need to take baby steps starting with multicultural first. I also suggest that they test and learn their way to what works for their brands keeping the risk/investment low until they get it right.

  2. Sandra Diaz from Diaz & Co., November 7, 2014 at 10:27 a.m.

    Jose, I enjoy the stimulus for discussion provided by your articles. My POV is that the real issue is that companies are too focused on what approach to employ (targeted, total market, cross-cultural or ignore) rather than on using data to determine what is their true sales/market share growth problem (or opportunity) to drive their choice of approach. Sometimes the problem is that some Hispanics need education on the category itself, requiring a more targeted approach (ex: Healthcare and Financial Services). In other cases, Hispanics are the brand's best customers in which case a Total Market approach is a must-do (ex: Fast Food or Personal Care). Another big issue is that companies generally think about engaging Hispanics primarily in terms of messaging, missing opportunities to drive overall growth by tweaking merchandise assortment and customer service. One of my clients, who would be considered a Laggard, already had 80% of items selling better to Hispanics than to non-Hispanics. Their problem was that for their in-store display strategy, they chose to feature mostly the 20% of items that were not as appealing. Display sales in Hispanic stores, which represented 40% of their total volume, were half of what they were in non-Hispanic stores. Just fixing the display strategy would go a long way in generating a sales increase without investing one extra dollar on marketing.

  3. Jose Villa from Sensis, November 9, 2014 at 8:43 a.m.

    Great perspective and commentary Sandra... I completely agree with you.

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