The Hispanic market is big business, attracting over $8.3 billion in ad spend to reach a growing population of 55.4 million with over $168 billion in discretionary spending. AHAA’s 2015 Hispanic Ad Spend Allocation Report shows more companies increasing investment toward the Hispanic market, with overall Hispanic ad spend among the top 500 advertisers increasing 63% from 2010-2014.
The AHAA report also shows that the number of advertisers representing the top two tiers in terms of allocation to Hispanic media (6.4% to more than 14.2%) more than doubled during that same period from 29% to 68%. However, it’s still the case that a majority (298) of the top 500 Hispanic advertisers are still laggards or “on the sidelines” with investment allocations under 3.5%. Most of these laggard, “on the sideline” or non-existent Hispanic advertisers are concentrated in large and growing industries that otherwise invest significantly in advertising: technology, financial services, electronics, e-commerce, health care and pharma.
It could be argued that these straggler brands have missed the boat with the Hispanic market. They’ve fallen too far behind to catch up to brands that have been marketing to Hispanics for years, steadily increasing their investment levels and sophistication towards the Hispanic consumer. For many brands, the “lag” argument is a non-issue because they are in industries that are generally behind the Hispanic curve. Most of their industry competitors are laggards as well.
The challenges mount with the growth of U.S. born Hispanics, the emergence of complex Hispanic millennials, and the mainstreaming of Hispanic culture. The confusion and debate regarding new multicultural marketing models like Total Market and cross-cultural marketing underscore the challenges these brands face in 2015.
New entrants into the U.S. Hispanic market could use a time machine back to the early 1980s – the dawn of the Hispanic market’s massive growth. They could get in early, when the market was easier to target and concentrated in a few geographic markets (LA, Miami, New York, etc.), with an easily segmented population of less acculturated immigrants speaking and consuming media primarily in Spanish.
However, emerging Hispanic markets could be better than a time machine, offering a second chance to laggard marketers to reach Hispanics.
As I’ve discussed previously, emerging Hispanic markets are new Hispanic population centers such as Charlotte, North Carolina, Atlanta, and Minneapolis. They are seeing similar growth patterns to the major Hispanic markets in the 1980s. These emerging markets are ideal Hispanic test markets that are big in their own right and comprised of younger, Spanish speaking Hispanic immigrants.
These emerging Hispanic markets also represent an optimal “on ramp” for laggards and new entrants into the Hispanic market. They can implement a simple and effective strategy that:
- Flips the script on the traditional Hispanic strategy by avoiding the “big seven” Hispanic markets to focus on the emerging ones
- Utilizes the tried and true segment-specific multicultural marketing model, staying away from more advanced and complex Total Market or cross-cultural approaches
If properly executed, this approach will increase the likelihood of measurable short-term Hispanic market ROI and can scale, both internally (organizationally) and externally (expanding into other markets). It’s much easier than time travel.
An edited version of this article originally ran on MediaPost Engage:Hispanic on July 9, 2015