What a Niche Audience!If you're a TV ad buyer, the Hispanic audience must seem impossibly lucrative. Since 1980, the Hispanic middle class has grown by 80%. According to some studies, 18- to 24-year-old Hispanics are the most brand-loyal demographic segment in the U.S. And guess what? The average Hispanic teen spends $320 a month, 4% more than the average non-Hispanic, and one out of five teens in the U.S. is of Hispanic descent. That's why, without a doubt, the Hispanic television market is hotter than a jalepeño. 3/23/2003 07:00:00 PM Eastern
A demographic explosion, a decade in the making, erupted recently over the advertising community, and its ripples will reverberate for years. According to new U.S. Census Bureau data, from 1990 to 2001, America's Hispanic population grew a whopping 61%— from 21.9 million to over 35 million—making it the fastest-growing group in the country.
|What Bilingual Latinos Watch|
|Some bilingual Hispanics watch English-only programs; others watch Spanish-only; still others watch both|
|Percentage of Viewers|
|Source: "Latino Viewing Choices Survey," Tomas Rivera Policy Institute|
According to a study by Santiago Solutions, a research group, more than one in six babies born in the U.S. (17%) will have Hispanic mothers, and about one in seven Hispanics are over 50.
As several multicultural marketing executives have noted, when it comes to reaching the Hispanic audience, the word niche
no longer applies. Univision (and its cable counterparts, Galavision and Telefutura) is still the network most Hispanics watch, but NBC-owned Telemundo and newcomer Azteca America are making strides in the market.
"We are now redefining what is 'general market,'" says Monica Gadsby, joint managing director/chief investment officer for the Tapestry agency. "Clients are increasingly looking for solution-neutral buys that really turn everything upside down." To reach a Latino audience, advertisers might use Hispanic media with only an English-language media "filler," she explains, but, for Hispanic teens, the process would be reversed, with a large English media buy and only Hispanic filler.
Tapestry, an affiliate of the Starcom MediaVest Group, provides integrated marketing solutions for Hispanic, African-American, Asian and other emerging markets. It's considered among the largest multicultural-"contact" companies, meaning a company that plans strategies along any media platform to get the attention of consumers—in other words, make contact. It bills more than $400 million annually with such clients as Coca-Cola, Philip Morris, Toys 'R' Us, Miller and Americatel.
"There is no longer a mainstream audience," Gadsby asserts. "Advertisers want to engage their audience, and it's very important to know when to speak [to Hispanic viewers] in Spanish and when to speak to them in English."
Says Carlos Santiago, president, The Santiago Solutions Group, "Most industries would have to double or triple their current allocation to Hispanics to be aligned with current Hispanic purchasing. These times of economic downturn are perfect to correct historic misalignments and invest 2003 dollars in a way that truly maximizes short and long-term returns."
For 15 years, Tapestry has been one of the few non-Hispanic-owned agencies cultivating the Hispanic marketplace almost exclusively. Indeed, at the most recent Association of Hispanic Advertising Agencies (AHAA) awards show, Tapestry took six out of nine 2002 Media Planning awards.
The agency no longer has the market to itself, however.
In February, MediaCom, one of the world's leading independent strategic media-planning and buying agencies, joined with WING Latino Group, a leading Hispanic marketing firm, to create MediaComLatino, a joint venture with $35 million in billings. Current clients include Warner Brothers, SlimFast, Subway, Hasbro and Glaxo SmithKline.
"Our goal is to level the playing field," says Jon Mandel, co-strategic and operational director for MediaComLatino. "Hispanics represent 13% of the total U.S. population and $540 billion in consumer buying clout, but companies are investing less than 3.2% of their advertising budgets to target Hispanics."
Other major agencies with growing multicultural units include Y&R (Bravo group) and MindShare. Cable operator Comcast, finding itself with systems in five of the top eight Hispanic markets, launched its own Hispanic Services Group, OYE, in June 2000.
The field of underserved product areas is wide, rich and ripe for cultivating.
The Association of Hispanic Advertising Agencies, in a report titled "Missed Opportunities," names several advertising category "laggards" when it comes to courting the Hispanic consumer: pharmaceuticals, U.S. government, automotive, travel/entertainment, software, computer makers, securities/financial services, and specialty retail.
Maria Cueva, vice president/director of joint ventures, MediaCom, is co-director of MediaComLatino, with Jose Aybar, vice president/managing director, WING Latino Group. Her job is to get those laggards on board, largely through Hispanic media buys.
"The partnership addresses not only the largely untapped potential of the Hispanic marketplace but also the proliferation of Hispanic media," Cueva notes. "Spanish-language media ranks No. 1 in several markets, including Los Angeles and New York. I'm sure we will be trying to see what works best [for our clients]. But, right now, it's mainly Univision, Telemundo, Galavision, Hispanic radio and the growing list of cable networks with Spanish feeds."
Gadsby warns, however, that advertisers need to do more than just acknowledge that a Hispanic audience is out there.
"First, don't ever assume anything about that audience," she says. "Always research first because the old rules don't work. Really seek out reliable resources such as AHAA, Simmons, and others."
One assumption Gadsby challenges is that Hispanic youth, despite spending 70% of their time with English-language TV, wouldn't benefit from a Hispanic media buy. "It is amazing to me that one network, Univision, has 20%-30% of all viewership, especially young viewers in prime time," she says, adding, "U.S. television is highly fragmented. Univision is highly concentrated."
According to CMR data, Procter & Gamble, AT&T and GM increased their Hispanic budgets by more than 20% in 2001.
AHAA says that's not enough. In a 2003 study "The Right Spend," AHAA reports that Hispanic consumer demographics and purchase behavior for categories such as children's OTC remedies, baby products, personal electronics and personal care, and beauty and cosmetics "make it imperative that corporations allocate between 10% and 25% of their total national business and marketing resources to the Hispanic Spanish/bilingual market."
For fast food, apparel, home cleaning, grocery items, beer, non-alcoholic beverages, autos, home electronics, telecom, entertainment, health information and armed services, AHAA suggests allocating 7% to 13%.
|Follow the Money|
|By 2007, the buying power of Hispanics will grow faster than any other ethnic group In the U.S. Buying clout is estimated to increase 315% from 1990 to 2007, compared with 131% for all consumers|
|Hispanic consumer spending|
|Source: The Selig Center for Economic Growth at the University of Georgia|