A Rising Tide Lifts Grasshoppers and Ants
November 8th, 2007
Posted by Danny Allen
I got both of these headlines in one email newsletter today:
Hispanic media and advertising continues to be a good place to be. How long can it continue? New Hispanic media outlets continues to spring up every day, and most of them seem to be doing very well. This is in part due to the increasing Hispanic population and affluence of that population. It's also due in part to the current advertising boom, particularly in online advertising. Right now a rising tide is lifting all boats.
But what happens if the good times stop?
The short term trend could be ugly for the next year. Hispanic websites could be in for a rough patch along with all other kinds of advertising-dependent media. Those that do not have good traffic and/or are poorly or overly aggressively managed
will have a hard time m
aking it. There could b
e a shakeout, with some Hispanic websites (and newspapers and other traditional media vehicles) failing.
However, the long term trend remains. Hispanics are the fastest growing demographic in the US. Hispanic spending power is strong and getting stronger. Hispanics are adopting the Internet at twice the rate as their general market counterparts. Online ad spending is growing.
My favorite illustration of business cycles is the children's story of The Grasshopper and The Ant. Those who enjoy the good times but don't sock something away for the bad times are going to fail. What the children's story doesn't tell you, is that in the spring the ants come back stronger and more prepared for the next season, and are much better off without the grasshoppers around.
In the long run, Hispanic marketing, and particularly online Hispanic marketing, is a good place to be. In the short run, there could be some room for belt tightening.
PS: Predicting economic cycles is fiendishly tricky. A downturn could come next month or in three years. The point remains that one will come, and when it does it's best to have a little something stored in the ant hill.