By: Marcelino Miyares, Jr., VP Mercury en español
(As printed in the May 2011 issue of Electronic Retailer Magazine)
I have been involved in marketing to Hispanics in some capacity for more than 30 years. That’s three census cycles, if you’re scoring at home. Most of my tenure has been spent in direct marketing, and every now and then I see a watershed moment that I expect will push marketing to Hispanics over the top. The release of the most recent 2010 Census results is one of those moments. And still, as recently as last week I have spoken to marketers and agencies who still manage to hold on to outdated and unprofitable perceptions about the Hispanic market.
The 2010 Census results, released in mid-April, are mythbusters for Hispanic marketers. The market now tops 50 million and will account for 95 percent of the teen population growth over the next five years. Hispanics now outnumber blacks for the first time in most United States metropolitan cities. Last year, Hispanics became the largest minority group in 191 metropolitan areas, as a result of the Latino population spreading to new areas of the country. The Census Bureau also projects that by 2020 the Latino population will increase to over 65MM.
Despite all this, there are a mere $3 billion marketing dollars spent annually against $850 billion in Hispanic spending power. That’s less than one-third of one percent. The new census figures add a lot of fuel to the argument that this market is underspent and underestimated. Unfortunately for the disbelievers and marketing xenophobes who chose not to read this article, this is commercial reality, not myth. So I thought I’d take the opportunity to use the census results (or should I say facts) and some other recent research to counterpoint the stubborn myths that live on in our industry.
“I can reach them with my English-language campaigns.”
Maybe some. But you will not reach Hispanics in as relevant and as meaningful a fashion as you will in their own language. In other words, you will not sell as much as you can. Seventy five percent of Hispanics still speak Spanish. Even English-speaking Latinos speak Spanish and watch Spanish-language TV. In fact, as much as 65% of Univision’s Prime Time audience is unduplicated by any major general market broadcast or cable network.
Putting language aside, the census results show that you may waste a lot of money by perpetuating this myth. That’s because the Hispanic population is not only growing, it’s concentrating. They can be reached much more effectively via broadcast than the general market. Three quarters of all Hispanics live in eight states, each of which have more than 1 million Hispanic residents. So if you’re not advertising in the Southwest, Florida, New York, Illinois and other states, yes, you could be overlooking a massive base of DRTV shoppers. Not including Puerto Rico’s millions of in-language shoppers.
“I don’t need to reach Hispanics, because as a group they are impoverished.”
Almost one in four Hispanics lives in poverty. The census showed that the Hispanic population, like all population categories, took a hit with the recent recession. However, this is only a quarter of the picture. Hispanic wealth is growing at other levels. According to the US Census Bureau, 16.5% of Hispanics made over $100,000 a year in 2010 up from 12.5% in 2000. And over 48% own their homes.
Hispanic spending power, according to recent research, continues to diversify. According to a recent Nielsen report, Hispanics spend more on categories for babies and children. In fact, Hispanic households represent 11.8% of CPG total spending, but 16.6% of disposable diaper sales. They spend more in traditional mass merchandise stores, food and drug retailers and warehouse clubs.
Hispanics self-medicate, self-beautify, self-coach, and self-advise on nutrition. That’s because they spend more of their income on their families and themselves. They are an opportunity waiting for the right product with the right message. Housewares, beauty products, toys, baby products and ingestibles are all paying huge opportunity costs if they are not investing in this segment right now.
“Spanish speakers only watch soap operas, Sabado Gigante and soccer.”
To rebut this notion I have to turn again to Nielsen, who reported in the wake of the census results that Hispanics, on average, watch more broadcast and satellite TV and display higher usage of mobile internet. And their viewing habits are changing as more programming options evolve.
Take a look at a news digest from just two weeks of activity, from April 3 to 17. NBCUniversal and Fox each unveiled new marketing initiatives aimed at Latino audiences, and Comcast’s intention to launch three minority-owned and operated cable channels over the next two years was confirmed by new parent NBCUniversal. Fox announced the launch of Fox Hispanic Media. Nat Geo Mundo, an extension of National Geographic for the Latino market; FOX Deportes, a sports network; and the recently launched Utilísima, a women’s lifestyle network, will be sketched in greater detail at next month’s upfront gatherings for advertisers. NBCUniversal announced a marketing initiative called Hispanics@NBCU, and Comcast’s push to launch 10 Latino- and African-American-owned channels over eight years officially opened. I’m sure the companies involved have determined that there is a viable and competitive market for Hispanic viewers out there.
“Our cost per call in the contact center will go up if I add a Hispanic campaign.”
True, this is because Hispanic campaigns typically generate 50%-100% more calls on a CPT or CPK basis (calls-per-thousand spent). In other words, CPCs and CPLs tend to be much more efficient. It is also true that your cost per sale will be higher with Latinos. But this increase can also be viewed as marginal given the overall increased volume your campaign will register for having executed a Spanish-language campaign.
“I don’t have the budget to test.”
In my experience, opening a Hispanic market campaign requires a much lower investment to test creative and media placements than most clients think. Adaptation of a successful show, call center set ups and media typically run less than $50k. Yet the yield on the Hispanic test is scalable to up to $250,000 per week.
Direct marketing for the Hispanic market means immediate response. We have so few opportunities like this one come along in our current economy. You no longer need to imagine a growing and targetable audience. It is already here. They are already shopping, but mostly waiting to be able to watch you on Spanish-language TV.
I hope the census results help bust another myth, too: the one that says marketing to Hispanics is too complicated. The business of selling in another language is always complicated, but no marketing campaign is easy these days. If you spend your last $10 on Hispanic marketing, chances are that it will earn you more than the first $10 you ever spent. So stop hesitating and call the more than a handful of successful and reputable agencies that can make it less complicated for you to grow your business, your campaigns and your profits.