I can already hear the movie trailer in my mind “In a world…with limited metrics and people with a passion for Hispanic marketing, the black-hole discussion of acculturation is threatening to take over the conversation, eliminate budgets and destroy the world of Hispanic marketing. Evil clients pressure a Hispanic marketeer for answers: who should I target?! Biculturals?!Ambiculturals?! Unaculturated?! Caught between a rock and a hard place…what’s a marketeer to do?”
As of late you see a lot discussion about Ambiculturals, Biculturals and Bilinguals. You hear how the market is moving to the middle and how the rise of the second generation is fueling this. In general, most of the statistics I see say the “middle market” (“Ambis”,”BiCults”, “Bilings”) is typically around two-thirds. Obviously, if you splinter the pie into five segments, the rudimentary middle becomes smaller as the pie is divided by five and not three anymore. But the purpose of this article is not to discuss how we should split the pie but rather discuss something that can help us gain perspective on where to focus.
I like looking at the Nielsen Hispanic panel report because: A) it is closest thing to the truth, B) it has decent coverage now that it has expanded to eight markets (from the original four: L.A., Miami, Houston and New York) and C) it weighs its representation of language usage to match the census which is approximately: 36.9% Spanish, 39.7% Preferred and , 23.4%. Bilingual. Depending on how you define “Bilingual” this middle may grow or get smaller but let’s continue and not get stuck in the weeds…
Let’s say you have a product that has fairly equal penetration among Spanish Dominants and Bilingual Hispanics. The natural bet would be to “bet on the future, (aka the middle target), because that is where the market is going, that is where the growth is, that is where I will build my long term equity.” Brand managers, pay attention now, here comes the big aha: Check. The. Buy. Rates. Look closely at this figure, because unaculturated Hispanics have larger households and in many CPG categories differentiated behavior. If the buy rate is higher, then, each Spanish dominant penetration point is worth more than a bilingual penetration point, right?
Not so fast. On one side, you have a higher buy-rate making each penetration point in the Spanish dominant target worth more, but, on the other hand, you have this growing middle phenomenon. In other words, does the higher buy rate of a target group that is not growing as fast off-set the lower buy rate of a target that is growing more quickly? Well, do the math and look at the horizon to figure out how many years it will be before one catches up to the other. In some cases, I have seen this figure to be surprisingly far in to the future. So if you are a smart brand manager (whose year-end bonus is partially tied to Nielsen panel data), you will think twice about where to place your bets and not necessarily “rush to the middle” but rather walk there slowly. This will ensure you can a) buy that boat or put in that pool you want when its bonus time but b), more importantly, not turn your back from your core. “Más vale pájaro en mano que cien volando”.