Think Multicultural

There is a new post today on the rarely updated and often interesting blog of Dr. Felipe Korzenny. It contains his positive trends for Hispanic marketing in 2009 and the future beyond that.

Several of the points fit well with Jose’s three part series (part 1, part 2, part 3) on the US Hispanic market.

My favorite is Number 9:

9. Increased used of technology, particularly the Internet… over indexing in several categories… and this goes for all emerging minorities— Hispanics are leading in the use of social media, and social media marketing is a great vehicle for incorporating Hispanic sensitive brands in the culture

You can read Dr. Korzenny’s post here.

For those of us working in search engine marketing, our goal is to get our message out to not just the right number of people, but the right kinds of people. And if we feel the strain from this challenge, imagine how the 2008 presidential candidates must have felt.

John McCain and Barack Obama both knew that Hispanics were a potential swing factor for the presidential election this year. Hispanics are the nation’s largest and fastest growing minority group; with an estimated 46 million they make up 15% of the U.S. population (Pew Hispanic Center, 2008). In 2008 Latinos compromised 9% of the eligible electorate nationwide and were estimated to make up about 6.5% of the total of voters this year.

Not only were Hispanics a potential swing factor, but they are online in greater numbers than ever before. According to the eMarketer: U.S. Hispanics Media Usage 2008 Report, there are 23 million Hispanic Internet users as of 2008, and they spend more time online than watching TV or reading newspapers and magazines.

With these kinds of numbers you’d think both McCain and Obama put big time resources into reaching them on the web via pay-per-click search ad campaigns. This was not the case.
Some may blame this on political affiliation – Hispanics for a long time have leaned toward the Democratic Party. 57% of Hispanic registered voters call themselves Democrats with just 23% aligning with Republicans – a 34% gap in partisan affiliation among Latinos (Pew Hispanic Center, 2008). Perhaps both candidates feel their resources are better spent elsewhere?

Well, not exactly. Obama spent over $3 million on Google ads, with a bulk of that most likely going towards search and contextual ads. McCain did not released figures for his online ad spending but we can assume it was lower than Obama, probably somewhere in the $1 to 2 million range.

Back in September, Valleywag dug up data from HitWise and found the keywords the candidates were buying on Google. While many keywords are the same in English and Spanish (Palin, John McCain, Obama), both candidates were bidding for keywords related to specific components of their campaigns (gas prices, obama taxes, mccain energy).

In order to look deeper into the candidates’ Hispanic SEM strategy, we took the time to plug in all the keywords that both McCain and Obama used in their English search campaigns, but in Spanish. Only three showed up for Obama and none for McCain. The three Spanish keywords that the Obama campaign bid on were “biografia obama”, “obama sitio official”, and “barack obama presidente.” However, the ad executions were in English and took the user to the English version of the donation page of the Web site (both Obama and McCain have Spanish versions of their site).

Next, we went to Google’s keyword tool to look up some keywords in Spanish that, had the two candidates had a campaign in place, would have driven considerable traffic to the Spanish versions of their sites. Since Google’s keyword tool gives us global search volume, we had to do some of our own math. The total number of Spanish-speaking Internet users in the world (minus the U.S) is somewhere around 114 million (that is, Latin America and Spain). Since the number of Hispanic Internet users in the U.S. is 23 million, we are assuming that close to 21% of the Spanish-language searches in the world originated in the U.S. The keywords we chose to analyze are:
• Elecciones (5,691 searches/month) – Elections
• Petroleo (3,801 searches/month) - Oil
• Inmigracion (23,100 searches/month) - Immigration
• Impuestos (3,108 searches/month) - Taxes
• Educacion (15,540 searches/month) - Education
• Guerra (315,000 searches/month) - War
• Gasolina (12,705 searches/month) – Gasoline/Gas
• Elecciones presidente (1,134 searches/month) – president elections
• Encuestas elecciones 2008 (1,134 searches/month) – polls elections 2008

If we take a conservative 2% average CTR for ads on Google the number of clicks per month for each keyword would have been:
• Elecciones: 113
• Petroleo: 76
• Inmigracion: 462
• Impuestos: 62
• Educacion: 310
• Guerra: 6,300
• Gasolina: 254
• Elecciones presidente: 23
• Encuestas elecciones 2008: 23

Which brings the total number of visits per month each candidate missed for not bidding on these 9 keywords to 7,623.

Both candidates missed out on thousands of visits from web savvy Hispanic Internet users, and possibly their donation money as well. The importance of having a Spanish-specific SEM campaign can’t be stressed enough. Did this turn out to be a factor on Election Day? Probably not the deciding factor, but nonetheless a factor to be considered by politicians in the future.

Ramiro Padilla, Digital Strategist, Sensis
Rob Kallick, SEM Coordinator, Sensis

In this last installment of my three-part look at the U.S. Hispanic market in an economic downturn, I will focus on the Hispanic business market, particularly Hispanic small businesses.

First, some data to understand the market:
- Hispanic Business magazine’s HispanTelligence estimates there are 2.2 million Hispanic-owned businesses generating close to $388.7 billion in revenues this year.
- This has been a rapidly growing market, with a CAGR of 9.1% over the last 5 years (Source: HispanTelligence)
- Over the next 7 years, Hispanic-owned businesses will be the fastest-growing component of the business market in the U.S., and their rate of growth is projected to be almost three times that of overall U.S. firms (Source: Latino-Business Barometer United States, 2005, RDA Global).
- By 2010, there are expected to be 3.2 million Hispanic firms generating $465 billion in revenues (Source: U.S. Small Business Administration, HispanicTelligence)

Furthermore, research indicates that among minority groups Hispanics are the most likely to start their own business (Source: SMOBE, SBO, U.S. Census).

Aside from all of the aforementioned positive projections that were made before the recent slowdown in the economy, the Hispanic business market has some intrinsic fundamentals favoring a positive outlook, even in a contracting economy, including the following:
- Many Hispanic businesses cater to the Hispanic consumer market, which is growing (see my previous post) and will weather the current slow-down relatively well
- While many Hispanic Business are in industries that are being hit hard by the slowdown (retail, construction), many are in growth industries – including health care, accommodation and food services, professional services, and admin and support services
- The growth and increased emphasis on supplier diversity (find out more about supplier diversity) by large U.S. corporations in all industries and the government sector will insulate many Hispanic businesses from reduced budgets and contracting opportunities
- Most importantly, a continued growth in the population, an increasing number of 2nd generation Hispanics, coupled with an overall trend towards starting new businesses, will keep positive pressure on the number of new Hispanic-owned companies started, even in a slower economy.

I am very bullish about this segment of the U.S. economy during the next 2 years. Entrepreneurs and the small businesses they start and run are the most nimble, flexible and adaptive areas of our economy - they adjust the best to changing market conditions - and this holds true for their Hispanic brethren. The Hispanic population is exploding, and a direct by-product of this population growth is a rapid growth in the Hispanic business community, comprised of new and established Hispanic-owned businesses.