Thinking outside the “LA-New York-Miami” Hispanic Box

April 3, 2014

Posted by Jose Villa

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.Hispanic EmergingMarkets Table_0414

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.

Hispanic MegaMarkets Table_0414

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.

The Hispanic Millennial Project

March 6, 2014

Posted by Jose Villa

In a past article I introduced the Hispanic millennial segment as potentially one of the most important and misunderstood consumer segments in the U.S. As with millennials in general, they are deservedly drawing the attention of marketers because of their size, lifetime value, and significant cultural impact. They are also drawing a lot of attention READ MORE…

Why the Future of Advertising (and America) is Cross-Cultural

February 6, 2014

Posted by Jose Villa

The last year has been filled with talk about the virtues and the issues with the concept of total market advertising. In a recent article I posited that there are essentially three different models for multicultural marketing. Although the terms are being used interchangeably, the result is a great deal of confusion in the multicultural READ MORE…

Nontraditional Hispanic Markets Emerge

January 2, 2014

Posted by Jose Villa

I often say, the Hispanic market in the U.S. has been changing as quickly as it’s been growing the last 15 years. One of the biggest ways it has changed is geographic distribution. One only has to take a quick glimpse at the following heat map to understand how the Hispanic population is spreading to READ MORE…

Is Total Market Approach a Threat to Multicultural Marketers?

December 13, 2013

Posted by Jose Villa

Pepper Miller of the Hunter-Miller Group writes an interested rebuttal of the total market approach in AdAge titled “‘Total Market’ Gets Lots of Buzz, but Multicultural Agencies Will Suffer Badly.” Her provocative post states that “the underlying premise [of the total market approach] is that ethnic agencies are largely unneeded, that the current multicultural marketing READ MORE…