All posts by Jose Villa

About Jose Villa

I’m the founder and President of Sensis, a cross-cultural advertising agency with digital at its core. I launched Sensis as a Web development firm in 1998 and one of the first agencies focusing on the Hispanic digital market. Our agency has since grown into a unique full-service ad agency – that takes a digitally-infused cross-cultural approach to the general market. I am passionate about cross-cultural marketing and always trying to push the envelope of multicultural advertising. I write regularly for MediaPost, AdAge, HispanicAd.com, and here! I also speak at a lot of advertising conferences like SXSW, Hispanic Retail 360, Hispanicize, and AHAA.

Hispanic Facts in 2017

September 20, 2017

Posted by Jose Villa

The annual Ad Age Hispanic Fact Pack just came out and it provides an interesting snapshot of the Hispanic market in the U.S. Aside from celebrating the best Hispanic advertising work and the top players in the industry, there are always thought-provoking nuggets of data that provide deeper insights into trends in the Hispanic marketplace. I’ve culled eight themes from the report that should provide some stimulating insights for all marketers:

Long-Awaited Shift to Hispanic Digital Media Spend Is Here
Hispanic media spend is finally shifting to digital advertising which was up 17% to $2 billion. Considering total Hispanic digital ad spend is notoriously under-measured, it’s clear that the shift to Hispanic digital media has arrived.

Notable New Advertisers
A few notable advertisers cracked the top 50 Hispanic ad spend list, including Unilever, Freeway Insurance and Novo Nordisk. Novo Nordisk is particularly interesting, as pharma has not historically invested in Hispanic media in a sustained way. It will be curious to see if Novo Nordisk continues its investment in 2017 and if any other pharma giants make the list next year.

Hispanic Media Preferences Continue Shift towards English (Particularly Online)
While there is a lot of angst in the Hispanic ad world about the importance of Spanish language media, the data on Hispanic media preferences is clear. Less than 30% of Hispanics are consuming most or all their TV and radio in Spanish. The online preference for English language media by Hispanics is particularly pronounced with 44.4% of Hispanics only consuming English media online and 63% consuming only or mostly English content online.

Hispanic Population Concentration in California
California is a massive economy unto itself. This is also the case when it comes to the Hispanic market. The Hispanic population in California is massive. There are approximately 15 million Hispanics in California overall and 3.1 million Hispanics are concentrated in four California markets representing 21% of the entire U.S. Hispanic population.

A New Big Three in the Hispanic Market?
The LA-New York–Miami triumvirate of the Hispanic market might soon be changing. Houston is creeping up on Miami as the third largest Hispanic DMA with only about 100,000 fewer TV households than Miami.

Google and Facebook Dominate Hispanic Digital
As David Chitel mentioned in his recent post, Google and Facebook have become the new Univision-Telemundo of Hispanic digital media. They are clearly gaining the most from the trend towards digital media spend in the Hispanic market, and are leveraging their massive reach to establish themselves as the future duopoly of Hispanic media.

Hispanic Digital Long-Tail
Hispanic-targeted digital properties — web platforms focused strictly on the Hispanic market — have fallen off the map — with the 10 largest properties only reaching 12 million of the 35 million online Hispanics. That less than one third of the Hispanic online population reached by targeted Hispanic-specific digital properties.

Hispanic TV Viewership Keeps Dropping
Hispanic TV network viewership continues to decline, with Univision reaching only 14% of Hispanic households. This remains a major issue for an industry driven by Spanish TV advertising.

An edited version of this article originally ran on MediaPost Engage:Hispanic on September 18, 2017.

Is the U.S. Hispanic Market a Growth Market?

The Hispanic market has traditionally been defined by most marketers as the growing population of foreign-born immigrants in the U.S. who have emigrated from Spanish-speaking Latin American countries (mainly Mexico, Central America and the Caribbean). While the market definition has generally expanded during the last 10-15 years to include native-born second and third generation Hispanics, the “core” Hispanic market has been characterized by the unacculturated and partially acculturated Latin American immigrants who have represented separate and distinct market opportunities for companies to reach and sell to. The defining characteristic of this market has been the growth and use of Spanish language media and advertising, predominantly consumed by this “core” Spanish-speaking immigrant consumer.

Over the last 30 years, the Hispanic market has exploded, growing from 14.8 million in 1980 to 55 million in 2014 (Pew Research). However, 55% of that growth was driven by immigration in the 1980s and ‘90s that exceeded U.S. births according to Pew Research. However, starting around 2004, immigration into the U.S. by Hispanics started a steady decline. In 2016, only 28% of the roughly 1 million annual immigrants into the U.S. were Hispanic. Starting in 2010, Asian immigration started to outpace Hispanic immigration.

ImmigrationTrendsPewt political environment in the U.S.

So, while new Hispanic immigration into the U.S. is still forecast to top 250,000 per year, another trend, reverse immigration, primarily among Mexicans returning from the U.S., is forecast to continue at levels of approximately 200,000 per year. The result is that net Hispanic immigration into the U.S. will be anemic at best, with growth rates of less than 0.4% per year or less than 80,000 per year. This is not a growth market.

While geopolitical and economic factors may change this trend, the next five years look bleak for “core” Hispanic market population growth in sharp contrast to the go-go ‘80s and ‘90s where the market grew rapidly.

Overall, the U.S. Hispanic population is forecast to grow, but that growth will come primarily from U.S. births. Which leads to a critical question: Is this U.S.-born Hispanic market a separate and distinct market from the foreign-born immigrant Hispanic market? This question goes to the heart of the future of Hispanic marketing. I would argue that this U.S.-born, acculturated Hispanic is separate and distinct and the strategies and tactics that worked for marketing to immigrant Hispanics the last 30 years will not work for native Hispanics.

The numbers paint a very clear picture: there are two Hispanic markets – one that is stagnant and aging and one that is growing and getting younger. As I’ve argued numerous times over the years, the old way of Hispanic marketing is becoming irrelevant. A new way forward is required to address this new vibrant market. A new Hispanic market requires a new approach to Hispanic marketing.

An edited version of this post originally ran on MediaPost Engage:Hispanic on May 25, 2017.

The Debate over “Total Market” and Multicultural Marketing

March 23, 2017

Posted by Jose Villa

Last month, a debate broke out online between Jeffrey Bowman of Reframe: The Brand and the Association of Hispanic Advertising Agencies (AHAA) over the relevance of total market vs. multicultural marketing. After posting an article entitled “Close the gap: The state of ‘total market’ industry”, AHAA responded with a pointed rebuttal in the comments. Bowman is the founder and principal of a marketing consultancy that grew from an eponymous association he founded for marketers interested in the emerging “Total Market Approach.” AHAA is a Hispanic marketing association made up of Hispanic ad agencies, media companies, and marketing service providers focused on the U.S. Hispanic market.

Bowman’s article makes the argument that multicultural marketing, which he describes as “separate but equal marketing,” is inefficient and ineffective. AHAA argues that multicultural advertising is highly effective, making a broad case for the importance and value of specialists in developing advertising that generates increased ROI.

This argument is important and one the marketing industry needs to have. I am glad Bowman made his case and AHAA stepped up to provide a counterpoint. For the last five years, the industry has argued these issues mostly at conferences and in private. The future of marketing in the U.S. – and potentially globally – will be affected by how we answer these questions.

While I agree with many of the points made by Bowman and AHAA, I think both sides are missing the fundamental issues.

I agree with Bowman on three key points in his Total Market argument:

  1. The advertising industry needs to create new models to serve brands as demographics drastically change.
  2. Companies, particularly ad agencies, need to create new value for the brands they support.
  3. Brands need to realize their internal decision-makers and employees (who are disproportionately Gen Xers and Boomers) are one to two generations removed from core consumer they are trying to attract, mostly Millennials and Generation Z.

However, Bowman’s arguments are flawed in several ways. He fundamentally misrepresents multicultural marketing as “separate but equal” failing to understand that historically most multicultural marketing programs have been under-funded receiving only a fraction of the resources devoted to the “general market.” He also misunderstands the nature of the pushback against the Total Market Approach. It has not been all agencies, but mainly multicultural ad agencies and ethnic / in-language media companies who have the most to lose from consolidation resulting from Total Market strategies. Bowman fails to articulate an alternative to multicultural marketing, and does not make much of a case for why a Total Market approach is better.

AHAA also makes some valid points in their rebuttal. Their argument that segmentation is an important and valuable marketing strategy is accurate. They also reference studies showing the value and ROI generated by multicultural marketing programs. However, AHAA and the multicultural marketing industry need to move on from flawed positions that were articulated in the AHAA rebuttal:

  1. Acculturation-based segmentation is losing relevancy for most ethnic populations in this country as they are increasingly native born.
  2. The focus on Spanish-language media is hurting the industry, as it also becomes less and less relevant to younger multicultural audiences that consume most of their media in English.

The multicultural marketing industry needs to move on from simplistic arguments regarding the value of specialists and be leaders who introduce new models for cultural marketing. If Total Market is not the right approach, and multicultural is increasingly irrelevant, the multicultural “specialists” are the best positioned to introduce innovative models.

An edited version of this post was published on MediaPost Engage:Hispanic on March 23, 2017.

A Critical Moment for Hispanic Advertising

March 2, 2017

Posted by Jose Villa

This year’s Super Bowl ads brought to light the role advertising plays in our cultural discourse. As I discussed in a recent NPR interview on the controversy over Super Bowl ads from Budweiser and 84 Lumber, advertising is both a reflection of our culture and an influencer on the culture.

I am most concerned with advertising’s influence during this incredibly politically polarized time in our country’s history. We as advertisers have an important responsibility to influence the culture, particularly as it relates to Hispanics and how the general population views them.

Many people in this country are justifiably concerned about illegal immigration and the negative impact of low-skilled immigrant workers and cross-border trade with Mexico on jobs. Unfortunately, this concern is widening a chasm in our country and fueling negative views of Hispanics. My intention is not to criticize those who feel this way about Hispanics. Instead, it’s a call to my fellow Hispanic marketers to take a step back, take the high road, and use this moment to answer a higher call to serve our community and country. We have an opportunity, together with the media and news organizations to shape the narrative, and influence the culture in positive ways.

How do we do this? To start, we must make sure that we represent Hispanics in the most authentic and way possible, avoiding stereotypes feeding the misconceptions at the heart of the political discourse. This is particularly important in mainstream, or so-called “Total Market” advertising featuring Hispanics. We need to show positive representations of Hispanics in ads. Not as gardeners, day laborers, or maids. We also have a responsibility to show the contribution Hispanics – particularly immigrant Hispanics – are making to this country. The businesses they are starting, the jobs they are creating, the families they are raising, the products and services they are consuming.

Secondly, we must have a difficult and honest dialogue about assimilation, language and diversity. Few people have been pushing the importance of diversity more than me. I think we’ve pushed diversity and multiculturalism too far. Part of what is underlying the anti-immigrant rhetoric and nationalist sentiment in this country is that we, as advertisers and the media, have pushed and promoted our differences too much. This is ironically what underpins the traditional ethnic-specific multicultural marketing of the last 30 years. We have focused on and promoted – either knowingly or not – the fact that many Hispanics are not acculturated (aka assimilated), that they prefer to speak Spanish. Unfortunately, this has created sentiment among non-Hispanics that Hispanic immigrants are not becoming Americans. Nothing can be further from the truth. However, we as advertisers play an important role in this and need to think about the narratives we are generating.

Advertising is a consequential endeavor. We as advertisers and marketers have a powerful opportunity and responsibility to influence culture.

An edited version of this article original ran on MediaPost Engage:Hispanic on February 23, 2017.

Effective Hispanic Advertising that Drives Behavior Change

September 28, 2016

Posted by Jose Villa

Most marketers view their role as driving demand, either via upper funnel branding and awareness activities or lower funnel direct response, sales and retention activities. Advertising is generally viewed as one of the primary tools to drive consumer demand. But what is at the core of driving consumer demand? Changing consumer behavior. That behavior change could involve new product trial, increasing occasion, acquiring market share by driving preference change, or increasing retention. To quote Adam Ferrier from his influential book The Advertising Effect, “Advertising is really the business of behavior change.”

The growth and interest in behavioral economics, as popularized by books like Nudge and Thinking Fast and Slow has brought a great deal of attention to the irrational ways people behave and the art and science behind how to influence that behavior. Building upon Ferrier’s analysis of psychological and behavioral science research, there are nine action spurs, or triggers, that can be used in advertising to change consumer behavior. (See figure below.)

BehaviorChangeTriggers_Sensis

Many of these behavior change triggers are not new, and have been in use since the Mad Men era of advertising. They include using endorsements and modeling (follow) and emotion and evocation (feel) in ads to change consumer behavior and drive demand. Similarly, some have been used in Hispanic advertising, but without a deliberate focus on behavior change, or leveraging all nine triggers. This is a major missed opportunity.

The Hispanic consumer market is typically seen as an emerging market for many brands and industries. This is particularly the case for laggard industries like pharma, electronics, and financial services that have made limited investments and little inroads with Hispanics. Most Hispanics are unfamiliar with or do not use their products. Additionally, many brands target recent Hispanic immigrants who are essentially new consumers with no brand preference. This is because immigrants may not be able access trusted brands from their home countries in the U.S. or are looking to assimilate via new adoption of U.S. brands. This is commonly the case with beer.

For these laggard categories and those targeting recent immigrants, Hispanic marketing is primarily about generating significant behavior change, in the form of:

  • Introducing new categories and associated products (e.g. pharma, financial services)
  • Driving trial with new brands/products/services (e.g. beer, wireless, CPG)

For these Hispanic marketing efforts to be effective, it is critical that communications not only effectively change behavior, but also be culturally relevant. Cultural relevance is achieved by identifying Hispanic consumer insights and creating content and messages that relate to Hispanic consumer beliefs, customs, ways of thinking, behaving and/or working.

Therefore, the triggers used to effectively change Hispanic consumer behavior must be used in culturally relevant ways. As an example, if the “play” trigger is used to make a desired behavior more enjoyable by incorporating gamification or play principles, it must be done in a culturally relevant way. This means using game formats that are popular and well understood in relevant Hispanic home countries, such as loteria and “veo veo”, or leveraging multiplayer formats where Hispanic gamers over index. Marketers have a significant opportunity to grow in the Hispanic market by employing smarter marketing strategies that use culture to change Hispanic consumer behavior.

An edited version of this post originally ran on MediaPost Engage:Hispanic on September 23, 2016.