B2B advertising has seen increased attention during the last few years, primarily resulting from the growth in digital marketing. Digital media, and specifically search engine marketing, have provided companies that sell products and services to businesses and professionals the opportunity to target their messages and offers to the right audience (usually the decision-maker or buyer) in the right industry (or companies) with a high level of precision.

With the growth in B2B advertising, one segment of the B2B market has been noticeably absent from the discussion: advertising to Hispanic-owned businesses (which I will refer to as simply Hispanic businesses). The topic of Hispanic businesses usually results in more questions than answers:

• Are there really that many Hispanic-owned businesses?
• Are there really that many Hispanic-owned businesses?
• Aren’t most Hispanic businesses small “mom and pop” sole proprietorships like single-location restaurants or dry cleaning businesses?
• Do Hispanic businesses even represent a viable market for my product or service (e.g. we sell CRM software to mid-sized companies)?
• Don’t my existing B2B programs reach Hispanic businesses?
• Even if I wanted to reach Hispanic businesses, aren’t they simply too niche to efficiently target with advertising?
• Do I need to advertise differently to Hispanic businesses?

So should B2B marketers pay more attention to Hispanic businesses? I would argue yes. Let’s start with answers to those common questions, or barriers, about Hispanic businesses.

Are there really that many Hispanic-owned businesses? – There are approximately 2 million Hispanic-owned businesses in the U.S. that generate almost $300 billion in annual gross receipts. By the end of this year, there will be 3.2 million Hispanic firms generating $465 billion (Sources: SBA, HispanicTelligence®). That number is expected to balloon to 4.3 million by 2012. In fact, as of 2007, 1 out of every 10 small businesses in the U.S. is Hispanic-owned (Hispanic Trends).

Aren’t most Hispanic business small “mom and pop” sole proprietorships – More than 50% of Hispanic businesses have 25 or more employees (U.S. Census Survey of Business Owners, 2002).

Do Hispanic businesses even represent a viable market for my product / service? – Hispanic businesses are in a variety of industries and range from the start-ups to large public companies, and therefore consume every imaginable business product or service. However, Hispanic businesses are concentrated in the following industries:

Don’t my existing B2B programs reach Hispanic businesses? – The short answer is yes. The successful Hispanic is bilingual (> 75% of Hispanic business owners / decision makers speak excellent English), and existing general market B2B advertising programs no doubt reach them. The question is do they effectively impact and engage them in meaningful way. I would argue no, and as there is an opportunity to tap into the unique experiences, challenges, perspectives and attitudes of Hispanic businesses with advertising built around unique Hispanic business insights. To put it another way, 44% of Hispanic businesses are owned by individuals of Mexican origin – do you think their experience as a business owner is different from their Anglo counterparts?

Aren’t Hispanic businesses simply too niche to efficiently target with advertising? – There has historically been a very real issue around the lack of viable traditional paid media properties that reach a mass audience of Hispanic businesses. I would argue that there are only 1 or 2 viable traditional publications that effectively reach large numbers of Hispanic businesses (Hispanic Business and Poder/Hispanic). However, digital media, including search engines, display media, performance and behavior platforms and social media have created new ways to effectively reach Hispanic Businesses.

Do I need to advertise differently to Hispanic businesses? – As I mentioned earlier, Hispanic businesses can be reached with general market B2B advertising, but not addressing the unique experiences, perspectives, attitudes, and challenges of decision-makers at these companies is really missing out on an opportunity to engage them in a meaningful way. The last question really gets at the heart of the untapped opportunity to market to Hispanic businesses.

To illustrate this, I’ve put together the following Hispanic business pyramid:

There is generally a direct correlation between the size of a Hispanic-business, who runs them, what their immigrant status, and what their acculturation level is.
So what is a B2B marketer to do? I would suggest the following approach:

1. Do some market research and try to figure out whether Hispanic businesses represent 10% or more of your market? (Some simple Census data will do the trick, especially with the “2010 Census Survey of Business Owners – Hispanic Business Owners” coming out in September). If yes, move on to step 2.
2. Figure out what segment of the Hispanic business pyramid you are targeting
3. Delve deeper into your segment and identify key insights among those Hispanic business decision-makers vis-à-vis your products/services
4. Consider customizing your products / services to address the Hispanic insights you have identified
5. Launch digitally driven, integrated advertising programs that allow you to cost-effectively reach and engage Hispanic businesses.

Unfortunately, most companies that have attempted to enter the Hispanic business market (banks, insurance/benefit providers, software companies, etc.) have done little else than simple extensions of their general B2B marketing in the form of sponsorships of local Hispanic chambers/professional/trade organizations and B2B networking events. I’ve seen firsthand the benefits and first-mover advantage reaped by health insurance providers and banks that have followed this approach and truly invested in the Hispanic business market.

If you’re looking for a nice overview and intro to the LGBT market, please check out their “Pink is the New Green” post.

As advertising continues to shift away from mass marketing focused on reach and frequency on broad reach platforms like TV that no longer reach everyone, to targeted, niche-driven marketing focused on engagement, it stands to reason that appeal of niches like the LGBT market will increase.

The “Pink is the New Green” piece also addresses how LGBT marketing is evolving from the old days of focusing primarily on events and local print to a more integrated approached leveraging increasingly sophisticated media vehicles like digital media.

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

Some of Matthew’s key insights include:
- Teens don’t listen to the radio or read newspapers
- Almost all teenagers have access to the Internet, where they are heavy Facebook users and searchers (and they hate display ads)
- Music is a key part of their lives – they are always listening to it, but don’t like paying for it.
- All teens have mobile phones – which function more like a stereo and text-message machine to them

Shortly before hearing about Matthew’s manifesto, I had recently read an article on how to reach multicultural youth by Tru Pettigrew on Fast Company. According to Pettigrew, multicultural youth “online and mobile consumption and spending habits are outdistancing the general market … almost 2-to-1.”

I found an interesting intersection between Pettigrew’s comments and Matthew Robson’s report on the issue of “access and benefits.” According to Pettigrew access and benefits are the most important drivers of success in marketing to and driving brand engagement among multicultural youth. According to Robson, the key driver to teenage behavior is their lack of money. They want access to movies and music, but will go out of their way to find it cheap or for free. Any brand that is able to give them access to the content they demand cost-effectively, or free, will win their hearts.

One thing is for sure – digital technology is the great equalizer. It gives teens access to the content and information they desire on their terms, whether they are multicultural or not.

At least this blogger isn’t a journalist. I’m a guy who works in marketing and posts something on a blog every once in a while. I have no editor, no fact checkers, and no policies of any sort (my wife corrects my grammar sometimes). A few weeks ago I posted something I had heard from a reliable source. Turns out the source didn’t know the whole story and I made a couple of logical leaps in the wrong direction. By the time someone with all of the facts came around, my version had gotten out into the press. What I wrote wasn’t false or in any way malicious, I just didn’t have the whole story. What’s more, I didn’t have any responsibility to go looking for sources to verify my facts. I’m no journalist, I’m just a guy who works in marketing and has a blog.

George Parker is a marketing guy. He also has a blog. It has a lot of what might be considered unprofessional language in it and also reprints rumors about the advertising industry. He gets a pretty good amount of traffic and has semi-reliable informers. He’s also not a journalist, but he gets a lot of traffic so he may be a “blogger.”

Silicon Alley Insider is one of my favorite blogs. They have several writers and are part of a larger company that owns several blogs. They have editors and paid advertisers. They sometimes post industry rumors and often break out with opinions. They also do things like post little throwaway items that seem designed to just increase pageviews and therefore revenues (again, my opinion). So SAI is a business and it’s writers are definitely bloggers. However, it isn’t a newspaper and I would hesitate to call those guys journalists. Bloggers and writers – yes. Journalists – no.

The New York Times is a “newspaper of record.” It has editors and policies and fact checkers.* Everything it prints is reviewed and revised and fact-checked. It actually prints things (as opposed to just posting) because there is a print edition of the newspaper, for better or for worse. The people who work for the NYTimes are professional, trained journalists.

During his first presidential press conference, President Obama took a question from Sam Stein. Mr. Stein works for the Huffington Post, which is a blog. HP is one of the most popular blogs on the Internet. It has a lot of very smart people writing for it (as does SAI), and lots of paid writers and original content. It has editors. However, it is not on the same level as the New York Times or Washington Post. At least not yet. It seems to sit somewhere between the New York Times and Silicon Alley Insider.

As blogs accumulate writers and editors and advertisers and credibility, they begin to look more like newspapers. As newspapers add interactive features and video and comments, and cut back on their print editions, they begin to resemble blogs. Although the NYTimes and Washington Post and Wall Street Journal have been around for years and are considered newspapers “of record,” the line indicating whether they are more reliable or have better content is blurring. As more people get their news and information online, this line will become more blurry. Even President Obama can see this.

In a world where anyone with a computer has a voice (and a blog), it is important that we as consumers of news and information understand who it is we’re reading and how reliable, and worthwhile, the content is. By the same token, magazines, newspapers, blogs, and other sources of information will have to prove their reliability and credibility over time. As much as writers have a responsibility to be credible and get their facts straight, readers have a responsibility to understand what their source is and in what context any information comes from.

* Jayson Blair notwithstanding

How can advertisers really think that they are benefiting from this?

If print isn’t dead, it’s mortally wounded and won’t last long.

As most of our readers already know, the Hispanic advertising industry has grown into a major sector of the overall U.S. advertising and media marketplace, and therefore a key industry in the U.S. economy. As a direct result of the growth in the population and spending prowess of U.S. Hispanics (see the last post for more info), a cottage industry has grown from a few local agencies in New York during the 1950’s into a $5 billion industry in 2007. If you’re interested in reading more about the history and rise of the U.S. Hispanic advertising industry, I highly recommend you read “Latinos, Inc”.

I see 4 key players that make up the Hispanic advertising sector:
1. Advertisers – these are the companies that spend marketing dollars on Hispanic advertising and marketing services, both nationally and locally. They can be as big as Proctor & Gamble and as small as a local used car dealer in Tucson, AZ.
2. Hispanic advertising agencies – there are approximately 100 Hispanic agencies, based on AHAA’s current active member and associate member list. They are the gatekeepers of the Hispanic ad dollars.
3. Hispanic media companies – mostly Spanish-language, but increasingly English-language TV networks, Cable TV, print (newspaper and magazine), online, radio, outdoor, and new media companies (e.g. HipCricket mobile)
4. Related industries – is a catch-all for companies such as production houses, translation firms, and event marketing specialists that play an important role in delivering Hispanic advertising services along the “last mile.”

To understand the economics of this industry, it’s important to understand the food chain that drives this market. To illustrate this, I’ve put together the following diagram which I’ll refer to as the Hispanic advertising industry food chain:

This diagram represents how the majority of the money flows, from the top to the bottom, and provides an approximation of the relative weight of each sub-sector or component (i.e. Hispanic ad agencies see the bulk, but not all of Hispanic ad spend, some flows directly to Hispanic media companies, particularly at the local/regional level). Also, I will argue that the economics of the Hispanic ad industry is not all that different from the general market ad industry, except for the fact that it is less complex and less fragmented (new media and technology have significantly altered the general market landscape into a much more fragmented industry of specialists agencies, media companies, and technology services firms).

So what should we expect to see in the next year or so as the economy goes into a slowdown? The first trend that has some significant historical precedence is that Hispanic ad budgets at national advertisers will inevitably be trimmed. Anyone who has worked in this business for more than a few months know this age old rule all too well – when ad budgets need to be cut, the Hispanic budgets are the first ones to feel the pain. Does this make sense? No, particularly if you believe my predictions from Monday’s post that Hispanic consumer spending will fair better, in aggregate, than the general market. This will reduce dollars flowing from the top down to the agencies, which will be negative for the entire industry.

Another big trend is the meltdown and consolidation in the financial services market, particularly the disappearance of major consumer-facing banks like WaMu and Wachovia. While the financial services industry has historically underspent in the Hispanic market (as an industry they only spent $167 million in 2007, ranking number 10), their budgets have been growing and the recent events on Wall Street will dramatically hit those budgets in late 2008 and 2009.

Add to these the doldrums affecting auto makers, and the picture looks pretty bleak.

I see two potential silver-linings:
1. Hispanic advertising spending by consumer product companies will probably remain robust, particularly considering the underlying fundamentals of the Hispanic consumer market I discussed on my last post.
2. Local ad spending, which is always hard to gauge, might be bolstered by the democratization of media (which I’ll talk about more on my next post) which will open the market to new, regional advertisers that have not previously invested in Hispanic advertising.
3. Overall Hispanic ad spending has been growing significantly during the last 5 years (at between 4-13% per year), and any slow-down will probably not result in negative growth.

All in all, the outlook is negative for the Hispanic ad industry during the next 15-18 months. I expect that overall Hispanic ad spend growth rate for 2008 will drop below 2%, and will remain mildly positive, but close to flat for 2009.

Check back in on Friday for the last part of this story looking at the Hispanic business market.

“When getting into the mobile marketing realm, start small – well, short.

A short message service (SMS) campaign is a great way to dabble in mobile marketing without taking a huge leap.

Text messaging remains a “must-have” feature for mobile phones, according to a study by Amplitude Research. It is widely used as one of people’s prime communication methods. ”

You can read the rest of the article by clicking here.

Yesterday I was cursing the Examiner as I threw it in the recycling, and got to wondering about their ad model. Do they consider me a reader? Is my house counted in their circulation? What about the people upstairs? Do we count as six readers?

According to their print media kit, their circulation in the DC area is 280,000 and in my zip code it is 1,640. Then they list daily impressions as 498,000. Considering that at most 1 house in 10 on my street even bothers to pick up the paper, how in the world do they justify almost 2 impressions per delivery? Does the one guy on my block who reads the Examiner read it out loud to all of his friends on a conference call, including the ads? Are there a hundred people living in that two-story house around the corner, all waiting eagerly for the paper?

If an online property tried to get away with a media kit like this they’d be laughed out of the market. Online ad serving measures every single impression. It assumes only one person is sitting at that computer when the impression is served. It knows where each ad is served. It doesn’t count all of the other people out there who might somehow be exposed to the website.

And at least for today, I won’t even go into the stark difference in measuring the effectiveness of online ads vs. print.

Let’s just say it’s a good thing the Examiner seems to have a pretty good website, because otherwise they’ll be laughed out of the market along with the rest of print advertising.