I’ve talked a lot about the growing importance of non-traditional, emerging Hispanic markets like Atlanta, Charlotte, N.C. and Washington, D.C. A lot of focus has been on population growth. However, there is something bigger going on with these markets. I believe their emergence is a game-changer for Hispanic marketing.
First off, they are the ideal Hispanic test markets. We all know Hispanic marketing activity is still “test” driven outside committed categories like CPG, QSR, and telecom. The long tail of newer entrants are perpetually testing, driving a significant amount of activity in Hispanic marketing. Many of the non-traditional Hispanic markets are a perfect fit for these “test” Hispanic marketers, checking off all the key criteria of an optimal test market:
• Similarity to eventual desired markets – with Hispanics making up 17 percent of the total U.S. population, markets like DC (14 percent), Milwaukee (15 percent), Oklahoma City (16 percent) and Atlanta (12 percent) have similar Hispanic population percentages
• Geographic isolation – a good test market isolates variables, particularly exposure to advertising. Markets like Atlanta, Seattle, Minneapolis, and OKC fit the bill.
• Affordable advertising media – Avoiding large expensive markets like LA and New York is important. Spanish language media options in markets like Raleigh, N.C., Seattle, and Milwaukee are relatively lower cost and can achieve high impression levels with modest spend.
These markets are also big in their own right. When you add up the Hispanic population of the 15 fastest growing markets, you get close to 8 million Hispanics representing over 13 percent of the entire U.S. Hispanic market. These markets are often overlooked or cut out of limited Hispanic marketing budgets. This creates a low level of competition in many categories. When you factor back in the affordability of advertising in these markets, you have a results-driven recipe for Hispanic market success.
Putting growth aside, the demographic makeup of their growing Hispanic community and their relationship to the broader population of their cities makes them attractive. Growth in these markets is from Hispanic immigrants who are younger and largely Spanish speaking. Spanish-dominant and Spanish-preferring make up significant percentages of Hispanics in markets like Raleigh (39 percent), Atlanta (39 percent), and Milwaukee (38 percent). They are still decidedly “minorities,” providing a “separate and distinct” market opportunity well suited for Hispanic-targeted marketing initiatives. This is different from the Hispanic population in mega-markets like LA and Miami, which is largely growing via native-born Hispanics who are leading the creation of a more nuanced “new mainstream.” Moreover, it will be a while until Hispanics represent 30 percent to 50 percent of the population in Raleigh (11 percent) and Kansas City, Mo. (10 percent), like they do in Houston and Dallas.
Finally, these non-traditional markets provide interesting opportunities to A-B test the various multicultural marketing models being debated, particularly “Total Market” versus the “multicultural” ethnic-specific approach. Borrowing a concept from the digital marketing handbook, you can look at the 10 Hispanic “Mega Markets” (where Hispanic make up ~ 30 percent or more of the population) as the places to test the Total Market approach and the “emerging 10” as markets to run Hispanic-specific multicultural programs and see how they do.
If you’re still using the 7-Market Hispanic Marketing Model, you’re missing out on a big opportunity today and potentially the future of the market.
An edited version of this article originally ran on MediaPost Engage:Hispanic on April 3, 2014.