The 'Trump/Total Market' Hispanic Slump

We’re halfway into 2017 and the Hispanic marketing industry is in a funk.

Everyone I talk to, from Hispanic agency principals to Spanish-language media executives, keeps telling me the same thing — the rest of the economy may be humming, but spending on Hispanic marketing is stagnant. Some anecdotal indicators I’m hearing this year:

  • Few if any Hispanic agency RFPs are being issued.
  • Hispanic media budgets are being cut or not growing.
  • Hispanic consumer purchases are down (e.g., lower sales at independent grocers).
  • New Hispanic marketing programs are being tabled.

The most common explanation I’m hearing for this slowdown is the political environment, or the “Trump Effect.” While I’ve seen this cause cited, it is more of a theme that captures multiple issues. It includes issues such as increased fear of deportation among Hispanic immigrants and reduced immigration into the U.S. from Mexico and Central America due to the building of the “wall.” These political issues are impacting the sentiment in corporate America around the Hispanic consumer market. Many companies are concerned the market is stagnant. Others might be worried about getting too much unwanted attention by making big investments in the Hispanic market.



While I do not disagree with the existence of this so-called “Trump Effect,” I think there is something deeper happening. I see this shift as “The Total Market Effect.”

I am not the first person to identify the “The Total Market Effect.” It’s the result of a more than five-year-old industry shift embracing the “Total Market Approach” by the U.S. marketing industry. Major brands have moved beyond talking about “Total Market” to implementing the broad tenets of this approach. I have often offered an alternative interpretation of the validity of Total Market approach while the industry has largely embraced a simplified version that integrates all marketing efforts, effectively reducing separate multicultural or Hispanic-only programs.

The shifting demographics in the U.S. Hispanic market have only helped to accelerate the acceptance of the Total Market Approach. According to the latest Geoscape GIS data, 46% of the U.S. Hispanic population is highly acculturated. Half of Hispanics are Millennials and Gen Z. The argument is simple: a young, acculturated Hispanic population is best reached via a Total Market Approach.

As with so many other major changes in the economy, it is the combination of the Trump Effect and the Total Market Effect that is really at the root of the Hispanic marketing slowdown we’re all experiencing. These trends are feeding off each other. Using another analogy, I think this is an over-correction. As with any challenge, this is an opportunity savvy marketers can exploit.

6 comments about "The 'Trump/Total Market' Hispanic Slump".
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  1. James Boldebook from CBC, July 27, 2017 at 2:29 p.m.

    You have it right Jose.  Younger more assimilated mainstream.  I think that is a good thing.  

  2. Henry Gomez from MARCA, July 28, 2017 at 11:49 a.m.

    I agree it’s an oversimplification to blame Trump. This contraction in the Hispanic marketing industry has been going on for some time. I remember being consciously aware of it when Burger King took away Hispanic advertising duties from Latinworks and consolidated a “total market” approach at CP+B in 2010. Why do clients want to move away from Hispanic (or ethnic) marketing and toward “Total Market”?

    1.     Perceived cost savings. Marketing isn’t respected in most client organizations and is seen as an expense, not an investment. Ethnic marketing is even lower on the totem pole. They don’t believe ethnic marketing provides ROI or they haven’t been able to calculate it, so they think cutting it will go straight to the bottom line. 

    2.      Unless there’s an ethnic marketing champion very high on the corporate ladder, it is handled at the mid-management level, so it’s much easier to cut.

    3.      General market agencies are getting in on the act, selling “total market” approach because it benefits them in a time of shrinking budgets across the board.

  3. Dr. Jake Beniflah from mitú, July 30, 2017 at 12:16 p.m.

    The reason for the decline in Hispanic RFPs leads to the suggestion that the hispanic rfps are being absorbed by general market shops. Few rfps for hispanic doesn't mean clients don't see Hispanics as an important target. They're being told that they can be reached through gm efforts, and it's simpler to go with one shop than three.

    The trump effect is based on a fear of being deported. This is based on verbatims printed in the press recently, which may be justified (according to the CMO at target). Interesting observation, and a question whether this fear is having an affect in other categories. 

    No no one can argue 2017 is not 1987.

  4. Henry Gomez from MARCA replied, July 31, 2017 at 10:37 a.m.

    I thought the Target CMOs comment about border towns was interesting in what he didn't mention. The bottom fell out of the Mexican peso in November and it didn't recover to previous levels until late March. Retail sales are reported with a lag. I wouldn't be surprised to start seeing better numbers soon. 

  5. Raul Lopez from New American Dimensions, July 31, 2017 at 10:50 a.m.

    I started doing Hispanic research back in 1979.  I was part of those early crazy years when to a degree it was "anything goes" and we rode the wave as each subsequent Census confimed the amazing growth of the market both through immigration and net natural increase.  While I agree that there definately is a Trump effect, I think the Hispanic market slump is mainly due to the "total market" approach and the recession of 2008-10.  I don't think that as an industry we've fought strongly enough to make clients understand that there is still a large segment of the Hispanic population that is best reached in language and in culture.  Too many accepted the total market approach without questions because of pressure, budgets, and convenience.  I also believe that some clients cut multicultural budgets in 2008-10 and many of those budgets never recovered.
    It's funny to me that we were all excited in 1982 (1980 Census) that there were 14 million Hispanics (let's sat 7-8 million were Spanish preferred);  today with 60 millions Hispanics (conservatively assume that 25% are Spanish preferred) we have ~15 million Spanish preferred and that's not a worthwhile target for some marketers?

  6. Henry Gomez from MARCA replied, July 31, 2017 at 10:54 a.m.

    Raul, I couldn't agree with you more. The Spanish-preferring Hispanic population in the US continues to grow, just not as fast as the English-preferring Hispanic population. People have lost sight of absolute numbers in favor of proportions. CMOs and CEOs who don't have a vested interest or experience in the Hispanic market are easily persuaded that the vast majority of Hispanics are bicultural and that the Spanish language in America is dead. 

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