It’s fair to say language preference is probably the most commonly used of these macro segmentation models considering most Hispanic marketing is focused on individuals who speak Spanish. Language has separated Hispanics – a population that would otherwise not be reached in English using English media – and created the scale that made the population so appealing to companies, politicians, and anyone else looking to “tap” into the growing market. It is a disparate group of immigrants from 21 different countries.

From a marketer’s perspective, language is big, serving as the clear and understandable “firewall” between so-called “general market” advertising programs reaching general consumers and niche/targeted “Hispanic” programs designed specifically to resonate with them. Language has driven how most marketers have crafted their marketing messages to the Hispanic market, typically in Spanish.

As with any segmentation model, a core assumption of this language macro segmentation model is most Hispanics fit into one of the following three “language” subgroups:
• Spanish-dominant – prefer to speak Spanish and consume almost exclusively Spanish media. They speak, read and write Spanish well.
• English-dominant – prefer to speak English and consumer English-language media. They speak, read, and write English well.
• Bilingual – go back and forth between English and Spanish easily and naturally and consume English and Spanish language media interchangeably. They speak, read and write English and Spanish well.

I’ve always considered this model to be an accurate representation of an otherwise complex world of U.S. Hispanics – not perfect, but a sound, basic framework to use in any critical analysis of how to approach the market. That is, until recently, when I began working with a new client. A client in the education industry.

As we’ve been digging into the data on their target Hispanic audience, we’ve all been essentially forced to call into question this basic, simple language segmentation model. Specifically, we see growing evidence of the existence of a potentially large segment of Hispanics who don’t fit into any of aforementioned three language groups.

A group of Hispanics without proficient command of English or Spanish. A predominantly younger group – ages 18-44 – born to first generation immigrants mostly from Mexico and Central America. Some are foreign-born and moved to the U.S. as children. Others, however, were born in the U.S., and raised in all Spanish households and neighborhoods, rendering their U.S. upbringing functionally identical to their foreign-born counterparts. They are not second generation but are not first generation in the traditional sense. They are a group functionally, culturally and linguistically in the middle.

A quick academic literature review uncovers that this group of Hispanics has been a topic of debate in the higher education community for five years. We can’t take credit for having discovered this missing “language” segment. There has been a fair amount of scholarly research done on this transition group by the educational community – commonly dubbed “Generation 1.5”

As defined by Oudenhoven (2006), “Generation 1.5 students are immigrant students who move to the United States at the age of 12 or older and enroll in middle school or high school in this country.” Their Generation 1.5 label comes from their special place as first-generation Americans who migrated to the U.S. as children, and have a strong cultural identification as Americans, but were born in another country. Educators, particularly within community colleges, have struggled to address the unique needs of this growing population. Four year colleges are beginning to face this challenge.

While most of the focus of research and analysis on this group has been related to education, the impact of the existence and growth of the “middle” generation of younger Hispanics is profound for marketers. This group’s existence, potentially on a large scale, creates all kinds of problems for the common associations made with the 3-part language segmentation model, including media preference, message impact and absorption. Do you buy Spanish media to reach them or English, or a combination? What language do you message them in? If in Spanish, what level of proficiency and vocabulary do you assume? In a world increasingly driven by search engines and keywords, how these consumers use type in search phrases can be complex. What taxonomy is appropriate on digital platforms like Websites, mobile devices and social apps?

Most important, the existence of a Hispanic Generation 1.5 points to an unmet need by a large segment of U.S. Hispanics – possibly tens of millions of them. This unmet need is manifesting itself in our education system, which is quickly trying to adjust to meet their needs. However, this group will likely have unique needs throughout our commercial economy – financial services, healthcare, and media – just to name a few. And as marketing becomes more about utility and providing value and less about blasting a one-way, self-serving messages, there is potentially a huge opportunity for marketers who provide real value to Generation 1.5.

(an edited version of this article originally ran on MediaPost’s Engage Hispanic blog on February 2, 2012)

According to the 2010 Pew Hispanic Center data, 62% of all Hispanics in the United States in 2009 were born in the U.S.

That is huge, and I anticipate that number going up when the Census publishes updated figures in the coming month. This figure represents a seismic shift in the way most people — particularly marketers — think about Hispanics.

Why is 62 more important than 50 million? It definitively changes how we view Hispanics in this country from a large and growing population of immigrants to a large and growing ethnic group. Think about all the implications of a population that is U.S.-born vs. one that is foreign born — language, acculturation, education, income. That is every demographic variable we in the marketing industry depend on to define the Hispanic market.

Sometimes it’s easy to get lost in the numbers and that’s when a real life example helps bring a point home. During the most recent Memorial Day weekend, I took my family to the Los Angeles Zoo. I think it’s safe to say that the Saturday during Memorial Day weekend is probably one of the busiest single days at the L.A. Zoo, and probably one of the best bargains in town for a young family. The long lines (it took an hour just to buy a ticket) and large number of families that packed the zoo definitely support this thesis. As a marketing professional and obsessive people-watcher, I couldn’t help but evaluate the hundreds of people I saw during my five-hour visit.

First off, about seven out of 10 families were Hispanic. Interestingly, no more than two out of 10 were speaking Spanish. I heard lots of Spanish accents, but most of the conversations, especially among the kids (easily 50% of the crowd), were in English. Ironically, my kids were the few speaking Spanish.

Now why the zoo observations? I know it’s anecdotal, and not a statistically significant sample of the population of Los Angeles. However, you would be hard-pressed to find a better cross-section of Angelinos on a given day in a given location. I think my experience at the L.A. Zoo supports what the 2010 Census and Pew Hispanic figures are really telling us — the U.S. Hispanic population is in for some significant changes in the next 10 years. The same Pew Hispanic Center report provides support for my anecdotal observations:

The majority, or “bulge,” of young Hispanics (14 or younger) are native-born. In 10 years, just in time for the 2020 Census figures, most of the Hispanic children I observed at the zoo and represented at the bottom of the right-hand distribution graph will be in the coveted 18-24 demographic that drives most advertising. Think about that a second.

So what will happen to Hispanic advertising in 10 years? Will it still be primarily Spanish-language ads running on Spanish-language media? If so, will it be relegated to a smaller niche than today, focused on a shrinking 30-something percent of foreign-born Hispanics? Or will it evolve with the Hispanic population and look like the more acculturated, nuanced market that will encapsulate the entire Hispanic market in 10 years?

Conversely, how will the Hispanic market change mainstream marketing? In 10 years, when Hispanics make up 26% or more of 18-24 year olds — based on 2009 Census Population Projections — what will beer commercials on the Super Bowl look like and who will be creating them?

I know everybody and their mother is putting out their analysis of the U.S. Census figures these days, particularly as they relate to the Hispanic population. However this article is definitely worth your time, as it tackles some pretty big issues and implications, both in the near-term and in the future (a few generations out).

In full disclosure, I was interviewed for the article (my take on the implications for business and marketing is included) and Wharton is my alma mater.

Hispanic social media continues to be one of the hottest topics in the business of Hispanic marketing. More and more data comes out every week about Hispanics and how they use social media. A steady flow of conferences, panel discussions, and interest on the part of marketers and their agencies has kept the subject top of mind for the last 18 months. I wonder if all this excitement is missing the mark because we’re still looking at the opportunity from the lens of Hispanic marketing circa 1990?

It’s helpful to take a step back and think about why the Hispanic marketing industry exists. Hispanic marketing exists primarily for 3 reasons: Language, Population size, and Culture.

The Spanish language was the original nexus for this industry, and even today, most Hispanic advertising is in Spanish and runs in Spanish language media. The size of the Hispanic population has elevated it above other ethnic groups in a country of immigrants – its population growth continues unabated into 2011. Cultural (behavior and beliefs) differences between Hispanics and mainstream Americans have created challenges for all series of organizations looking to tap into the opportunity of this perpetually emerging market.

However, when we look at social media, do these distinctions between Hispanics and the rest of the U.S. apply? Starting with population size, the market opportunity in social media does appear to be as compelling as in the analog world. Large percentages of Hispanics are online and using social media – so there is scale to justify the attention. And there is a lot of data pointing to the fact that Hispanics tend to have more friends, followers, connections, etc. – a direct translation of their larger offline social networks. But size alone does not make a market – a large group of people with Latin surnames using Facebook, Twitter or YouTube is not in itself a marketing opportunity

So we turn to language. Most online Hispanics are comfortable reading and writing in English. We know half of all U.S. Hispanics were born in the U.S., and with a large youth population, we can infer that more and more Hispanics will be able to navigate their digital lives in English. Moreover, since social media is in essence an amalgamation of content created by consumers, there are no Spanish-language versions of social networks, micromedia, or video sharing sites. There is no channel 34 of social media.

Lastly, are there cultural – behavioral and belief – differences between Hispanics and the mainstream market that result in different social behavior? Can we say that large swaths of 20-30 million Hispanic who are online exhibit some distinct social media behavior that would create an opportunity to connect with them? Do they update their status differently on Facebook or create different tweets? Do they join different groups on LinkedIn or not enjoy watching kitten videos on YouTube as much as everybody else? Do Hispanics view social media differently- Do they read or write blogs for different reasons?

I wonder if these mostly demographic distinctions, which were the basis for the modern Hispanic marketing industry that started in the 1960s, are the right way to approach Hispanic social media? In an environment that empowers consumers to create content and connect with others who share common interests, passions, and experiences – maybe we need to reframe the discussion?

Are we missing the boat by focusing on Hispanic demographic and behavioral distinctions? Is Hispanic social media really all about psychographics – and tapping into digital psychographic communities?

Let’s look at what is distinct about Hispanics in social media? An easy one is that Hispanics are organically part of Hispanic communities online. Stated another way, if you’re Hispanic and using social media, you’re more likely to have friends, connections, followers, etc. that are Hispanic. So what? Well, there is a network and amplifier effect – reaching a Hispanic in this environment has the potential to virally reach other Hispanics who are connected to each other.

Digging deeper, there is something even more distinct and powerful about Hispanic social media use – the ability to connect with others who share similar life experiences and interests. What is the quintessential shared experience among all Hispanics? I would argue that it’s the fact that we live in two worlds – our ethnic world defined by either our or our parents/grandparents’ home country and our mainstream, American world. This cuts across the Hispanic acculturation spectrum. If you believe that we are the sum of our life experiences, then there is a potentially powerful connection among tens of millions of Hispanics living in the U.S. that social media has the potential to tap into.

Lastly, social media has provided Hispanics with the ability to find and create content that matters to them – highly niche content beyond the cookie-cutter “Hispanic” content created by Hispanic TV, radio, magazines, and newspapers that was designed to be all things for all Hispanics. Remember, Hispanics are a highly diverse group in the U.S., from 22 different nationalities, who now live across this varied country, who speak differently, eat different foods, and have very different passions. The long-tail world of social media content has created a conduit for these hundreds of Hispanic sub-groups to connect with each other digitally.

So how can marketers and brands successfully utilize social media to reach Hispanics? I will delve into that subject through new research on our Hispanic Personas project. I am going to be unveiling this groundbreaking Hispanic Persona project that will delve into the psychographics of social Hispanics at the Hispanicize 2011 Conference in Los Angeles on April 7.

My next MediaPost article will introduce some toplines of that research, but the full research will only be available at Hispanicize 2011.

Futurecasting is a heuristic technique that helps envision future consumers, products, industries, competitors, challenges, or opportunities; by combining forecasting and imagination to model future states. Web Personas are commonly “futurecasted” by digital agencies to help plan out long-term digital investments – such as large-scale Websites with enterprise functionality (e.g. e-commerce, personalization, etc.) – so they are adaptable to changing user behavior and motivations. Futurecasting is a flexible business modeling tool and can be applied in various ways. I have found that Futurecasting can be particularly useful when “disruptors” are factored in – exogenous shocks or changes that cause a significant change in trend lines. A classic example is World War II and the resulting “baby boom,” a disruptor that changed U.S. demographics for 50 years when thousands of GIs returned home and started having larger families.

One of the most dynamic segments of U.S. society and business is the U.S. Hispanic market. The last 10 years in particular have seen significant growth, driven by a rapidly growing population and its effects on American culture and business. An interesting question that I think about a lot is how the U.S. Hispanic market will look in the future… in 2, 5 and 10 years for example? One way to think through this question is to futurecast the U.S. Hispanic market.

The first step in futurecasting is to start with basics trend lines and see where things are heading. Let’s look at the Hispanic market across four broad trend lines: Population, Acculturation, Media Consumption, and Technology usage.

Population – The 2010 Census figures coming out in a few months will not doubt show a continued upward trend in Hispanic population. The only question is how close the final Hispanic population figure will get to 50 million (up from 35 million in 2000 and 45.5 million in 2009). We also know that Hispanics have spread out from traditional gateway states in the Southwest into the Midwest and South in increasing numbers. I expect those population dispersion trends to continue, and potentially accelerate, with states like California, Nevada and Arizona still reeling economically from the current recession. We also know that Hispanics are getting younger – currently 50% of all U.S. Hispanic are under 26. In fact, the largest age cohort among Hispanics is ages 2-11 (making up 21% of the population). There is no reason to think that Hispanic birthrates will slow down, particularly with a growing population base. So we can assume more Hispanics that are younger, and spreading out living in other parts of the country.

Acculturation – The Hispanic market has generally been viewed thru the prism of the 3-part acculturation model (acculturated, partially acculturated and unacculturated). Currently, roughly 50% of the market falls into unacculturated, 30% are acculturated, and 20% are partially acculturated. Moving forward, with such a large and young U.S.-born Hispanic population, trends point to a redistribution towards partially acculturated and acculturated. Looking into the future we can assume more acculturated and partially acculturated Hispanics, both in absolute terms and as a percentage of the population.

Media Consumption – Hispanic media consumption has begun to change with the overall growth and increased adoption of digital media, albeit slower than in the general market. One result of this gap (in 2009 only 58% of Hispanics had access to the Internet vs. 71% of those in the general market), is that there will be a “catch-up” effect, particularly as the price of electronics and broadband access continues to drop. Looking towards the future, we should see a dramatic shift in Hispanic media consumption – either by increasing the overall time they spend with media (by adding digital media) or as a shift away from traditional media.

Technology Usage – Acculturated and partially acculturated online Hispanics already show a strong propensity to be early adopters of new technology. However, as AOL’s 2010 Hispanic Cyberstudy discovered, less acculturated Hispanics are actually more likely to be early adopters of new technology. Looking into the future, there is no reason to expect that behavior to change, particularly with falling technology prices.

Put these trend-lines together and we start getting a pretty interesting picture of Hispanics in the next 2-10 years:
• A younger population, that is more acculturated
• A geographically diverse market – that is quickly growing in the South and Midwest
• A group of consumers that is spending more and more time consuming digital media (in many cases for the first time)
• And a consumer base that is pushing the technological envelope, leading the adoption of new devices such as tablets, 4G smartphones, and emerging gaming platforms.

But things get really interesting when we start looking for potential disruptors and the resulting shifts and opportunities. Here are a few for you to ponder:

Retro-acculturation – The retro-acculturation trend within the Hispanic market is nothing new – 2nd and 3rd generation Hispanics actively reconnecting with their Hispanic heritage and culture by learning Spanish, listening to Latin music, and looking for authentic “Latin” experiences. Just look at the growing cottage industry of Spanish-language children’s books to get a sense of what’s happening. Now consider a huge US-born “Hispanic” millennial population that is starting to have their own children. I can see retro-acculturation splintering that nice and clean 3-part acculturation model. I could imagine at least one additional segment appearing (“retroacculturated”) – maybe more. This disruptor could also have a profound impact on what kind brand experiences these future Hispanics look for. A desire for Latino authenticity seems like a natural next step, which could threaten some established “cross-over” brands that are no longer viewed as real (think of popular Mexican food chains or shelf-brand salsas).

Changing Diets – If you don’t think American’s are changing what they eat, just visit your local McDonald’s – greasy egg sandwiches are giving way to granola and fresh fruit. As Americans as a whole become increasingly health conscious, the trend will likely reach all segments of the Hispanic population. What happens when those high fructrose corn syrup filled tortillas and preservative –filled canned frijoles don’t cut it for Hispanic consumers? Hispanics may not start flocking to Whole Foods tomorrow, but there might very well be a need for something in between that and the discount Hispanic grocery chains that dominate the market today.

Mixing of new cultures – What happens when Mexicans and other Hispanic groups start settling in places in like Tennessee, Ohio, Alabama, and Georgia? I think that the potential changes would be more significant than the appearance of new Spanish language media in those markets (especially over 5-10 yearsCan you imagine the inevitable fusion that results when guisados meets soul food? Imagine country and Spanish boleros forming new genres – it’s actually already starting to happen. How long before soccer becomes a popular sport outside of the Southwest and East Coast? Lots of new products, genres, and demand for products and entertainment that probably don’t exist today.

A “Hispanic Baby-Boom” – Finally, there is a potential “baby” baby-boom coming from within the Hispanic market that could have a profound effect on the Hispanic and overall U.S. population. With close to 20 million Hispanics at or entering child-bearing age over the next 10 years, the potential for a new baby boom is real. The resulting demographic shifts could reverberate across U.S. culture and commerce for the next 50 years.

Regardless of whether some or all of these disruptors come to pass, futurecasting paints a clear picture of a fundamentally different Hispanic market than the one we know today.

Moore’s law is a commonly referenced maxim in the technology industry that states that the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every 2 years. While this may sound like a lot of engineering or futuristic jargon, the law has come to be closely linked to the capabilities of many digital electronic devices – commonly expressed in terms of processing speed, memory capacity, or resolution quality. A simple, yet effective application of Moore’s law means that every 2 years MP3 players like the iPod will have double the memory capacity, laptops will have twice the processing speed, and mobile phones will offer two times better viewing resolution at the same or lower cost.

You may be wondering what Moore’s law has to do with Hispanic marketing. Simply put, Moore’s law means that digital media devices, such as MP3 players, netbooks, and mobile phones are getting faster, more robust, easier to use, and cheaper, speeding their adoption by U.S. Hispanics of all ages, income and acculturation levels. Think about how much an iPhone cost when they first came out in June 2007 – around $600 for the 8GB device. Today they are selling for $99 with a 2 year plan (at $70/month). A device that was previously price prohibitive to a large swath of the U.S. Hispanic population is now within reach of most of them. Today, smartphones like the iPhone, Android devices and Blackberry’s are basically mobile broadband computers, allowing users to surf the mobile web, use thousands of apps, and take advantage of a plethora of communications and GPS-enabled tools well beyond simple voice calls.

Moore’s law means that the pace of Hispanic digital technology adoption will increase from one year to the next. The lag between general market adoption (even looking at early adopters) and most U.S. Hispanics will decrease over time. That’s why today more than half of U.S. Hispanics are using mobile broadband. How long before most Hispanics begin using location-based services or downloading mobile apps?

What does this mean for Hispanic marketing in general? Let’s start with the bad news. Historically, Hispanic marketers have had the benefit of a relatively large lag of 3 to 5 years between general market adoption of new digital media technology, whether it was Internet access, broadband Internet access, or use of social media. That kind of lag gives marketers time to see how the technology, many of which are disruptive in nature (think about iPods and radio listenership), will unfold and how general market consumers’ behavior changes. They can then make carefully thought out, data-driven decisions about how, if at all, they will change their Hispanic marketing programs to adjust to the new technology. Looking ahead, that lag will start to shrink down to 1-2 years, and eventually disappear. For instance, with 4G mobile devices beginning to hit the market this summer, how long before Hispanic consumers are also buying them in large numbers? Probably early-to-mid 2011. Not a lot of time for marketers to adapt to potentially significant changes in Hispanic consumer behavior.

The good news with this rapid rate of technological change and adoption by U.S. Hispanic consumers is that it will level the playing field for organizations looking to reach and engage them. Having tens of millions of dollars of Hispanic broadcast media budgets will increasingly become less and less of a barrier to entry to the U.S. Hispanic market. Instead, innovation will rule the day and companies that are willing to take risks and leverage new technology will reap the benefits of the fastest growing consumer segment in the U.S.

The data points tell the story:
– More people in the US (and globally) have a mobile phone than an Internet-connected PC (Limbo Mobile Advertising Report)
– 71% of U.S. consumers anticipate daily use of the mobile Internet within the next two years (Nielson)
– Mobile Internet is growing rapidly in Latin America (Telecom Mgmt Group)

Both the U.S. Hispanic consumer of today and tomorrow (new immigrants will already be mobile, and increasingly mobile Internet, users before leaving their home countries) are ready.

So who will take the lead in this relatively untapped sector of Hispanic marketing? The question is really who will take the lead in creating mobile content and functionality for the Hispanic market?

Some would argue that Hispanic media companies like Univision, SBS, Impremedia, and Terra are best equipped to take the lead, as they are already in the content business, and would just need to continue to evolve their distribution to include mobile channels (which many of them are already doing). However, there is a long way to go to offering the same level and breadth of content via mobile that these media companies offer over the traditional Web, let alone via TV, radio, and print.

Don’t count out ad agencies, with their clients, taking the lead. While agencies and their clients are not content creators in the traditional sense, the growing importance of social media is changing their business models and imperatives, as companies like General Mills with QueRicaVida.com and Kraft with ComidaKraft.com increasingly becoming content creators. Moreover, I would argue that agencies and the brands they represent have the edge in offering functionality via mobile. Think useful applications, like BestBuy and Chipotle mobile apps that extend their product / service experience to the mobile platform via useful and helpful applications.

Whoever does take the lead will benefit from a huge first mover advantage in a growing and increasingly mobile-connected Hispanic audience.

In many ways, the 2000 Census ushered in an unprecedented golden age of Hispanic advertising and media that we’re still enjoying in 2009 (in light of the difficult economy).

As we prepare for the Census count next year, I keep thinking that the results, which should begin to trickle out in early 2011 (less than 18 months from now), will be a Catch-22 for our industry.

One of two things will happen – either the 2010 Hispanic population numbers will exceed or fall short of expectations. In some ways, both spell trouble for Hispanic advertising.

Obviously, if the Hispanic population numbers fall short of expectations, there will be inevitable talk that the Hispanic market has peaked and that recessionary economic pressures and impending immigration policy changes will mark the end of the “golden years” of Hispanic population growth. This is the kind of worst case scenario that is very similar to the disastrous effect of higher than “expected” inflation (sorry, I digress to my macroeconomics background). This will inevitably lead to marketers reassessing their Hispanic advertising budgets and potentially flat lining them or worse.

If the Hispanic population numbers exceed expectations, the common theory goes that it will serve as further fuel for the fast burning fire that has been growth in Hispanic advertising and media. While no doubt a boost for the Hispanic media business (broadcast, radio, Internet, mobile, print), I question if it is not a mixed blessing for Hispanic advertising agencies.

If the Hispanic population numbers do exceed expectations, what do you think general market agencies will do? I can’t imagine they will sit idly and watch their budgets get reallocated to their Hispanic counterparts. That is not what they’ve done the last 5-10 years. I have to believe big Hispanic population Census results will only reinforce the importance of their efforts to take on Hispanic agencies. It would be a matter of survival.

What do you think?

I encourage to read the article by clicking here. The article includes some interesting statistics that I am sure will surprise you!

Overall, Social Networking penetration among Internet users has grown from 78% in September 2007 to 87% in September 2008.

While this may seem like only an marginally relevant statistic to U.S. marketers, it has huge implications for those of us in multicultural advertising. As new generations of Latin American immigrants arrive in the U.S. and become part of our “Hispanic market” in the next few years, a significant percentage of them arrive as experienced and active social networkers. This is a huge paradigm shift from the commonly held notion that Latin American immigrants to the U.S. are generally disconnected from the Internet and particularly social media.