Yet as the Hispanic market continues to grow and diversify, and the U.S-born and acculturated proportion of its population expands into a majority of the overall market, it continues to show a strong tendency to stay connected with the culture of the parents' or grandparents' home country. It continues to be very hard to argue against looking at the entire U.S. Hispanic market -- both U.S. and foreign born, acculturated and non-acculturated -- as a distinct market segment, important for marketers to understand and uniquely cater to.
As this distinct Hispanic market continues to grow and evince demographic diversity similar to the overall U.S. population so, too, do the opportunities for all brands and companies to engage them profitably. Whether it's luxury consumer brands (e.g., automotive, retail, financial services) targeting affluent consumers or B2B companies targeting business-owners and industry decision makers (e.g., software makers, computer hardware, travel), all have opportunities within this growing and diverse Hispanic market.
Unfortunately, the Hispanic marketing paradigms of the last 40 years have been, and continue to be, irrelevant to all but a few mass market brands such consumer packaged goods, mid- to low-end retailers, and large telecoms. What is this paradigm? Spanish-language ads run on mass market Spanish-language TV and radio (nationally or regionally). This may sounds overly simplistic, but a quick look at the entries and winning spots at any Association of Hispanic Advertising Agency Ad Age Creative Awards program (all Spanish-language spots) or the most recent Ad Age report on Hispanic media ad spending -- 78% of all Hispanic media spend went to TV and radio -- supports my point.
There are a lot of brands and companies that are not currently investing in the U.S. Hispanic market. Just nine industries make up 43 of the top 50 current ad spenders in the U.S. Hispanic market. It's not because there isn't a market opportunity -- I would argue that just about every company in the U.S. has an existing or potential Hispanic customer base. The problem lies in the irrelevant "mass marketing" tools currently used by most high-profile Hispanic advertisers.
Let's use an example to illustrate my point. A luxury auto manufacturer with a significant U.S. presence looks at some data on the U.S. Hispanic market, and realizes that there is a large, and growing, affluent segment. In fact, 2009 U.S. Census data shows that approximately 1.8 million Hispanic households (17%) have income of $100,000+: a very attractive segment for this luxury auto brand. Would developing a "paid media"-heavy Hispanic ad campaign revolving around Spanish-language creative running on Spanish TV and radio make sense? Probably not, since data show that only a small percentage of those 1.8 million households are bilingual or Spanish-dominant, and their consumption of TV and radio closely mirrors the general market. What's a brand like this to do?
The answer is to take a completely different approach to advertising in the Hispanic market. The answer is precision marketing.
Precision marketing starts with throwing out "mass marketing" tactics and looking at advertising differently. Much like direct response advertisers have been doing for years (and many companies are successfully pioneering in the Hispanic market today), precision marketing involves thinking very quantitatively about your target and focusing on reaching the individuals that are most likely to purchase your product or service, with the most relevant message, as cost-efficiently as possible. This isn't about reaching all Hispanics with a message the works broadly with all of them -- it's about reaching the right Hispanics with a highly customized message.
Precision marketing is a three-step process.
1. Precision Insights Effective advertising is based on sound and relevant consumer insights. The difference with precision insights is narrowing your market to a very tightly defined audience (think back to the example -- Hispanic male head of households making $100K+/year). What motivates these consumers to buy your product? What makes them unique from their mainstream market counterparts? Language alone will not cut it and will probably be irrelevant for many segments of the Hispanic market.
2. Precision Framework A marketing framework is the simplified model of the complex real world used to predict and plan what specific target consumers will do before buying your product or service. The most popular marketing framework used heavily in direct marketing is the funnel (awareness to purchase). In today's world of social media-driven consumer empowerment, social and peer-to-peer (P2P) frameworks might make the most sense. You need to define this precision framework, making sure it's tightly related to the precision consumer insights.
3. Precision Media Lastly, with precision insights and framework in hand, it's time to move away from mass media channels and buying tactics, and leverage the ever-growing world of precision media. Digital (Web, mobile, social) will be a big part of this utilizing behavioral, contextual, and profile targeting. But traditional media (TV, radio, print, OOH) is increasingly providing more opportunity to precisely target specific Hispanic segments via day-part targets, advanced analytics, etc. Whenever possible, utilize performance pricing to structure your media buys. Your media placements need to tightly align with a very specific Hispanic segment, not broad audiences of Spanish speakers.
The $1 trillion Hispanic market has grown and matured to the point where it's an opportunity for just about every company. The marketing tools and techniques are available to reach the right Hispanic consumers relevant to your product/service. The practitioners just need to catch up.