Commentary

Why Advertisers Are Underspending On Hispanic Market

Last month I highlighted just how far off U.S. advertisers are in terms of their Hispanic ad spend. But what is behind the lowballing?

According to eMarketer, total U.S. ad spend will reach $111 billion in 2019, with much of the growth over the prior year being driven by digital spend. 

Hispanic ad dollars are only 6% of the total U.S. ad spend, yet Hispanics comprise over 19% of the total population. This represents a significant discrepancy and a missed opportunity for brands and marketers.

Here are some thoughts on why spending on the Hispanic market isn’t more balanced:

  • Advertisers have overgeneralized an emphasis on Spanish-only. When Hispanics are searching for an item to purchase, there is much more content in English, so even if they speak Spanish they may search in English. Therefore, ads should be built out by language groups.
  • Marketers’ search criteria lack nuance. A foodie who is a first-generation American from Colombia eats differently from a third-generation American in Detroit whose family came from Mexico. This example illustrates the diversity in the Hispanic segment that is overlooked by country of origin, acculturation level, and word choice. Especially in complicated categories like food, getting the content right means truly understanding these differences to deliver meaningful content.
  • No one is in-house to champion the cause. Generalizations occur because there is a lack of diversity in marketing teams, so huge swaths of the market get missed.
  • There is a lack of awareness about Hispanic spending power in their category and Hispanics’ lifetime value. If marketers are only looking at average household incomes, they could be discounting Hispanics as a target in general.
  • Marketers think they are capturing all Hispanics by including Spanish-language broadcast media, when Hispanics are digitally savvy and migrating to streaming services and YouTube — especially younger Hispanics. Viewership numbers for Spanish broadcast media have been declining for some time, as the percentage of Hispanics who are foreign-born continues to decline.
  • Marketers don’t understand the dynamics of account settings for Hispanic households. For example, a computer in a Hispanic household could have multiple users, so perhaps their Google account is set to Spanish but their computer is set to English. If advertisers don’t do campaigns in both English and Spanish, they could be missing this target entirely, especially with Hispanics who are bilingual.
  • Mobile devices are critical. Mobile drives paid search and social media among Hispanics. Ads have to be served in the right language. Again, bilingual Hispanics might be left out of a campaign for this reason.

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Without campaigns in both English and Spanish, the ability to micro-target is probably working against advertisers, and ads are not being served to this lucrative target in the right language. Hence the underspend!

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