Commentary

Advertisers Underspending On Hispanic Market

Have you evaluated your Hispanic advertising spend lately? As we approach the biggest shopping period of the year and the corporate cycle when most ad dollars are planned for the coming year, we know that this key group of shoppers is being drastically underweighted in advertising spend by U.S. advertisers. 

In 2018 U.S. Hispanic ad spend was $9.4 billion, according to Ad Age. That is only 6% of the total ad spend of $151 billion! The Hispanic population just reached 64 million people this year, making it the second-largest demographic group in the U.S., or 19.5% of the total population. With that in mind, U.S. Hispanic ad spending should be in the $20 billion range. 

This statistic as well as spending habits was featured in "The Hispanic American Market Report" by Claritas. This report highlights that Hispanic households will outspend non-Hispanic white households during their lifetime by over $538,000.  

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According to "Simmons 2018 State of the Hispanic-American Consumer" report, Hispanic households account for 10% of all discretionary spending in the United States, with annual expenditures of $215.5 billion on non-essentials in 2018, up from $163.4 billion in 2013. A key category where Hispanics overspend is apparel, especially men/boys, children and shoes. 

It’s interesting to note that discretionary spending by Hispanic households grew 12% in the past year, while spending among non-Hispanic households grew less, only 2%. 

And Hispanics are young. As of 2019, Hispanics aged 6 to 34 represent 25% of all U.S. consumers. The younger end of that range is forming its brand loyalty while the older portion has rising incomes and the potential for increased spending.

There are other key shopping behaviors marketers should note from MRI Simmons 2019:

  • Hispanic shoppers are motivated by online ads at a 21% greater rate than non-Hispanics.
  • Hispanic shoppers are motivated by video monitor displays at a 91% greater rate. 
  • Hispanics shoppers are motivated by shopping cart ads at a 76% greater rate. 
  • Hispanics overindex on mall trips, with four or more trips in the past four weeks, or at a 63% greater rate.

Added to these shopping stats are clothing purchase data from Latin Post  showing that Hispanics adopt trends sooner than non-Hispanics (43% vs. 34%) and they buy new clothing at the beginning of a season (27% vs. 19%). This demonstrates a willingness to pay for fresh and newly released apparel, now instead of waiting months for it to go on sale.

Based on all this information, here’s the conclusion: The Hispanic market is the perfect fit for marketers seeking younger consumers, with rising incomes, a high lifetime value, and rising spending levels. This demographic is motivated by advertising, buys the latest fashion trends, and likes to shop at the mall. It makes one wonder why more isn’t being spent on this market, considering the potential results with a little more of an advertising spend.

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3 comments about "Advertisers Underspending On Hispanic Market".
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  1. Leo Kivijarv from PQ Media, November 22, 2019 at 1:25 p.m.

    The Ad Age data only accounts for advertising, not brand activation. PQ Media, in partnership with the ANA's Alliance for Inclusive & Multicultural Marketing (AIMM), reported in the US Multicultural Media Forecast 2019 released in July, that Hispanic American Media reached $17.94 billion in 2018 representing only 3.6% of the $528 billion US advertising & marketing ecosystem (latter data point from the PQ Media Global Advertising & Marketing Forecast Series). This compares to the 18.1% share of the US population that is Hispanic in 2018 per Census Bureau data. In comparison, the Multicultural Media Forecast found that African American Media represented 1.4% of advertising & marketing, but 13.4% of the population and Asian American Media represented 0.1% of overall advertising & marketing, but 5.8% of the population.   

  2. Karla Fernandez Parker from Sensis, November 22, 2019 at 2:36 p.m.

    Leo, thanks for sharing the other sources of data.  Glad we agree there's a big gap in underspending from either source!  Appreciate it, Karla

  3. Paula Lynn from Who Else Unlimited, November 26, 2019 at 2:23 p.m.

    Data, schmata. If certain advertisers admit that the Hispanic market is as powerful as it is with  a more powerful influence and with numbers than they want it to be, their "truths" die.

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