Hispanic digital media spend will surpass print and radio, as in the general market. Digital media spend in the Hispanic market will continue to remain far behind TV, radio and print (approximately 5% in 2011). With all the talk about increased spending on Hispanic digital by agencies and marketers alike, we will look back on 2012 and see digital spend stayed well below double digit territory and is nowhere near surpassing radio or print (as we saw in the general market in 2011).

Hispanic ad spend will stay flat in 2012. If there is one prediction you can take to the bank, it’s this one – Hispanic media ad spend will grow in 2012 (compared to 2011). While there is still concern over a double-dip recession in 2012 (particularly as things unravel in Europe), the 2012 elections and the juggernaut that is Univision will assure growth in the market. Portada recently released a report projecting 4-5% media growth in the Hispanic market based on a survey of Hispanic marketing professionals. I think this is conservative.

Marketers will increase their budget allocations to the Hispanic market. Although the previous prediction would logically lead most to believe that marketers will increase their Hispanic budget allocations (the percentage of their overall marketing budgets directed at the U.S. Hispanic market), the sad reality is that things will remain status quo when it comes to the approach most marketers take to allocating budgets to the Hispanic market. Most of the growth in Hispanic ad spend in 2012 will be driven by new entrants into the space – led by political advertising (not just candidates – but the also super PACs – all of whom are finally paying attention to Hispanic voters). Existing Hispanic advertisers will continue to maintain their Hispanic spend in the same range as in 2010.

Mainstream digital publishers will stop launching English-language “Latino” Websites. The last 2 years have seen major media companies jump into the Hispanic digital space – targeting the oft discussed bicultural and English dominant Latino, including FoxNewsLatino.com. NBCLatino.com, and The Huffington Post Latino Voices. Some might assume the space is now crowded, or that competing with media powerhouses like News Corp, AOL and NBC Universal is futile. Well, I see more of these “Latino” extensions coming in 2012. Why? The barrier to entry is so low. With digital, unlike the offline world of broadcast or print, there is very little capital costs (if any) associated with launching a new publication. Sure, a good Website infrastructure is not cheap, and producing quality content is not easy (or inexpensive), but compared to the printing and infrastructure costs of launching a new Spanish-language daily or the licensing fees associated with launching a new Spanish-language radio station, the costs are marginal and worth the risk. One interesting ramification of this new media growth will be that there will be many more options to reach English-speaking Latinos than ever before.

Mobile will finally become a key part of the Hispanic marketing mix for most advertisers. “2012 will be the year of Hispanic mobile marketing.” I’m sure you’ve heard or read this somewhere. With all the data on Hispanics’ heavy use of mobile and major growth in general market mobile marketing, it stands to reason that Hispanic mobile will come of age in 2012. Unfortunately, this is a major case of all bark and no bite. I see a couple of problems with these naïve predictions. # 1: Where will the money come from? With most mobile media programs funded out of digital media buckets, and Hispanic digital media spending in the 5-6% range, mobile marketing programs will be hard pressed to find funding in an already dry well. #2 With so much of the growth in mobile activity being driven by mobile Web browsing and tablet use, I do not anticipate significant investment on the part of marketers into Hispanic mobile- and tablet-optimized sites (when most hardly keep up their browser-based Hispanic Web and microsites) #3 Hispanic mobile and social media are inextricably intertwined, and Hispanic social media is still in its infancy (see below).

Clients will continue moving their Hispanic advertising to general market shops. As the economy slowly starts improving in 2012 (I’m an optimist), I expect there will be less pressure on marketers to consolidate their general market and Hispanic advertising programs in one ad shop. Equally important, many veteran Hispanic marketers who consolidated will likely miss the attention to detail and specialized resources they got from Hispanic ad agencies compared to the Hispanic divisions of general market shops. Finally, I think general market shops are less excited about investing in Hispanic capabilities and divisions after experiencing how little budget is actually allocated to these programs. 5% of a client’s marketing budget is not too exciting when you already have 95% of it.

Hispanic social media will become a major force in the industry. Again – lots of buzz, but very little substance to back it up. While 2010 and 2011 have seen a lot attention placed on engaging Hispanics in social media, with the establishment of two rival Hispanic social media organizations and countless blog networks touting thousands of influential Hispanic bloggers, the space is still in its infancy and will take a while to catch up to the general market in scale and sophistication. While I applaud the efforts of organizations like LATISM, Hispanicize, and Latina Bloggers Connect among others, large reach and national marketer scale is still missing from the space. Specifically, as more and more Latinos start blogging and building large networks on Facebook, Twitter, and Linkedin, there is a key missing ingredient –an audience of millions of Latinos consuming their content. Until that happens, Hispanic social media will be a niche within a niche.

We won’t see any new Hispanic advertising agencies open their doors in 2012. No matter how challenging or competitive the Hispanic ad industry gets, it always amazes me that new Hispanic ad agencies, PR shops, and other marketing agencies are launched every year. I don’t have an official count, but I know of at least a dozen or so shops launched between 2009 and 2011 (in arguably the most challenging 3 years the industry has faced). It’s quite a testament to the resilience and constant innovation within the industry that optimistic entrepreneurs see opportunities to make a better mousetrap in our business.

I think 2012 will be a good year for our industry – filled it’s fair share of challenges, but more importantly, opportunities to grow and prosper, as Hispanics become a bigger and more integral element of the American corporate and cultural life.

(an edited version of this article originally ran on MediaPost’s Engage Hispanic blog on January 5, 2012)

Everyone knows that Hispanics are heavy mobile users, but…
We have all seen multiple charts and statistics that show that Hispanics are at the forefront of mobile device adoption and usage. We are aware that they have the highest penetration for mobile phones (eMarketer, 2011), that they over-index on smartphone adoption (Nielsen, 2011), and that they are more likely (vs. the general market) to use their mobile device to download music, play games, and access social networking sites (Scarborough, 2010). Unfortunately, most of the research out there regarding Hispanics and mobile technology focuses on basic penetration and usage data.

While this is great for establishing that an opportunity exists to reach Hispanics via mobile, it does little to provide actionable insights to help marketers leverage this channel to integrate mobile to their marketing mix in order to connect with this segment. So the question remains: how should a CPG brand target Hispanics via mobile? How should a major retailer take advantage of the millions of Hispanic customers with smartphones in hand that enter their stores daily? Other than making sure your existing Hispanic (digital) marketing is mobile-friendly, there is very little to go on.

The reality is that more and deeper data is needed. We would all benefit from insightful, well-conducted field qualitative research, which would provide a better understanding of U.S. Hispanic mobile users’ needs (in terms of information and interaction), as well as of the underlying psychographics.

A good place to start: In-store retail
At any given moment, 45% of Hispanic shoppers at any retail location have their smartphone with them (Nielsen, 2011). A good place to start learning more would be to explore in-store mobile engagement. More specifically, identify opportunities for retailers to connect with Hispanic shoppers through innovative, mobile-driven experiences in stores. Considering the fact that Hispanics’ discretionary spending surpassed $129 billion in 2010 (Experian Simmons, 2011), and that 7 of the top 50 Hispanic advertisers are big box retailers (AdAge Hispanic Fact Pack, 2011), it appears that it would be highly rewarding to better understanding how to engage Hispanic consumers in retail environments.

For example, language aside, what specific opportunities exist for creating an in-store mobile engagement strategy that appropriately reflects the norms and cultural priorities of Hispanic populations? What are the relevant differences between Hispanics and non-Hispanics in their use of smartphones (for shopping purposes) that shed light on their different in-store mobile experiences?

Do differences in ethnicity play any significant role in shaping in-store mobile experiences, or are the commonalities greater than the differences (i.e., Mexican-American vs. Puerto-Rican)?What are new ways to leverage in-store mobile engagement that will have special appeal to Hispanic shoppers?

Conversely, what are the risks in creating an in-store mobile strategy that fails to account for these norms and priorities? Are there any ways, apart from language, in which Hispanics find in-store mobile experiences designed for non-Hispanic audiences deficient?

These are all great initial questions for big box retailers and marketers alike to ask. Nonetheless, looking at in-store mobile engagement opportunities is just the beginning. There is no doubt there are countless opportunities to better understand Hispanic consumers in the context of their advanced use of mobile technology, and to create tailored user experiences that result in loyal customers with a high lifetime value.

(an edited version of this article originally ran on MediaPost’s Engage Hispanic blog on 12/1/2011)

You may be wondering what the right spend figure is? Well, according to the latest AHAA report the number is 14.2%.

In AHAA’s latest report – “Advertising 2011 Budget Alignment” – AHAA reframes the right spend argument from the perspective of return on investment – performing regression analysis on Nielsen Hispanic media investment data to quantify the correlation with a company’s overall revenue (over a 5 year time period). While I applaud AHAA and Santiago Solutions Group (the research company commissioned for the study) for their analysis and evolving the right spend argument, they still arrive at the same result – a single number (or a range of 6.4-14.2%, if you take their two top spending categories) that is implied by their analysis to be the right investment level for most U.S. companies.

Fundamentally, I think too much emphasis is being placed on this one single right spend number. My biggest concern with the emphasis on the right spend figure is how it’s calculated and what it measures. First of all, right spend, as calculated by AHAA, focuses on paid media spend on largely above-the-line (Cable & Spot TV, local radio, national magazine, and local magazine) Spanish language media tracked by Nielsen. The calculation not only ignores digital and direct response-oriented media (where historically a lot of Hispanic marketing investments are focused), but fails to take into consideration the other 2 pillars of the POEM (Paid, Owned, Earned Media) model – earned (PR, grassroots, events, social media, etc.) and owned media (in-store, POS activations, Websites, content marketing, etc.). It focuses only on paid media, a perspective that I feel is dated and unrepresentative of the entire spectrum of marketing activities taking place in the U.S. Hispanic market. Equally important, the logic for arriving at most of the right spend figures I’ve come across is overly very simplistic and flawed – the idea that advertising expenditure in the Hispanic market should be pegged to Hispanics percentage of the U.S. population (around 14%).

More importantly, I think the right spend figure is being improperly applied to individual firms and the decisions they should make. At its core, right spend is a macro measurement, that attempts to paint a picture of the entire U.S. Hispanic advertising market. Much like the field of economics, applying macro analytical tools to micro firm-level decisions is inappropriate. In a market-driven economy, individual firm decisions are influenced by macro-economic conditions, but not solely driven by them. Therefore, treating a right spend figure as a benchmark to be applied directly by individual firms is inappropriate.

So if economy-wide right spend figures are not to be used by marketers as a direct benchmark, what is a Hispanic marketer to do to determine the right advertising spend in this space? I would argue that individual firms should move beyond right spend and apply a toolbox approach to this very important decision. Below are four options much more appropriate for individual firms to consider:

Budget Allocation Modeling (Demand-based modeling) – As I discussed in a blog post last year, an effective analytical tool for determining Hispanic marketing budgets is to model the demand that will be created or how much additional Hispanic consumer sales will be generated by an increase in Hispanic marketing resources (i.e., demand elasticity).

Incorporating game theory – Game theory provides a valuable analytical framework for firms to evaluate competitive forces. Basically, it involves thinking through what your competitors will do based on various choices (in this case Hispanic advertising investment levels). Game theory can provide useful input, leveraging competitive investment data, to determine a firm’s potential Hispanic advertising spend.

An agile, option-based strategy – For new entrants into the Hispanic market, I often recommend an iterative, option-based strategy that will guide the right spend decision. This basically involves drawing up a series of incremental investment levels based on the successful achievement of milestones at each decision-point, or option point. The underlying concept is to start with controlled market tests, utilizing highly actionable data to guide success. In a recent article I fleshed out this agile approach in the context of Hispanic social media programs.

A total business approach – Building on the fact that the right spend calculations fail to consider the totality of investments in Hispanic marketing beyond paid media, determining the right Hispanic investment level for a company involves looking well beyond marketing. Particularly for new entrants into the Hispanic market, making sure you take a total business approach, considering product development, customer service, channel strategy, among others, is critical. Therefore, the right spend calculus needs to consider much more than marketing expenditures.

Right spend analysis, as it’s been developed to date, is a good starting point for companies trying to evaluate how they should invest resources in the U.S. Hispanic market. We just have to be careful to move the complex decision making around U.S. Hispanic market investments well beyond this starting point figure.

(an edited version of this article originally ran on MediaPost’s Engage Hispanic blog on 11/3/2011)

• Hispanics are early adopters of new technology, especially within the social media realm (we’re basically dealing with an “early adopter” consumer segment)
• Traditional Hispanic marketing is fairly predictable with clear steps to execution and predictable outcomes (you create a print ad and if you get it into the publisher before a certain date it will run it in a magazine with a certain circulation and will be viewed by x number of consumers)

So essentially, Hispanic social media marketing, even more than traditional social media marketing, is highly unpredictable. It is realm chock full of unknowns. An experienced social media marketer will tell you that they never know what will work before they’re actually in market, so it’s a game of trial and error. You have to be willing to fail before you succeed.

Unfortunately, the way most marketing programs (including social media programs) are planned, developed, launched, measured and optimized is based on a linear model that depends on the accuracy of numerous assumptions and emphasizes the planning artifacts (usually in the form of documents like “strategic plans”, creative briefs, and media plans). It is “waterfall” sequential process (as its described in the software development world):

By contrast, over the last few years, a new, more flexible approach to marketing, based on the tenets of Agile methodology (again, an approach pioneered in software development), has been evangelized by many organizations that stresses speed to market, rapid iteration, and embraces the notion that marketers don’t know what works before they’re actually in market. Because of the unpredictable nature of the Hispanic consumer and their use of digital media, and the “wild west” nature of social media marketing, an agile approach is critical to success.

So what does this approach look like? It helps to contrast it to the way most of us have gone about developing marketing programs (and ironically, the waterfall method I proposed in last year’s Hispanic Social Media Guide)

So how do you get started with this new agile approach to Hispanic social media? Follow these simple steps:

#1 Assemble a small team and assign roles – Focus on “doers.” If you planning on producing a lot of Spanish content, get a Spanish copywriter on board. If you will be building an app, get a developer on the team. Give everyone clear roles and make sure you have all the resources to execute on your program.

#2 Decide on the duration of the first project (or “sprint”) – Emphasize short cycles, ideally 2-4 weeks. Anything longer than that means you’re overplanning or don’t have the resources you need to build what you want.

#3 Set goals for the first project / sprint – Flesh out your goals from a user perspective in the form of “stories.” E.g. “I want Hispanic moms to visit the Facebook page, ‘fan’ us, and download a printable recipe.”

#4 Set regular project/sprint meetings – Set short (10-30 min) meeting daily or a couple times a week to discuss the stories, review tasks and estimate time requirements.

#5 Project / sprint retrospective – After you’re in market, evaluate and discuss with the team what went well and what went didn’t.

#6 Start project/sprint planning again (for the next project/sprint) – Go back to step #3 and start again.

This approach to Hispanic social media isn’t about discarding all planning, but instead about condensing into short cycles, where documentation and assumptions are replaced with living programs and actual results (and data).

While I wouldn’t suggest this agile approach for all Hispanic marketing programs, particularly those with hard deadlines and highly defined deliverables (like event marketing, direct mail, or print/OOH advertising), it’s perfectly suited to social media marketing. Social media provides near instant feedback – you’ll know within a few days or weeks whether a program is working. Social media is also relatively inexpensive (particularly of the hard costs of media necessary with most traditional advertising), allowing for easy testing and learning.

One final note: agile Hispanic social media marketing is perfect for companies that are just getting started in the Hispanic market. Success in the U.S. Hispanic mark often requires investments and changes in other aspects of a company’s operation – such as customer service, human resources, and product / service development. Trying to predict them all upfront would be difficult if not impossible

If you haven’t read it, give it a once over (it’s re-posted at the end of this blog)

As we near the end of 2011 (isn’t that crazy?), it seems like as good a time as any to reflect on whether any of my predictions panned out.

I could make a pretty strong case that predictions #1-#4 were on point. Not seeing much movement on prediction #5 though.

What do you think?

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I made the bold prediction almost a year ago today that Hispanic marketing was in for big changes in 2011. I have to admit I think I will be proven wrong.

I think 2011 will result in even more changes than I boldly forecast last year. In fact, I think by the time 2012 rolls around, we’re barely going to recognize the Hispanic marketing space that has seen tremendous growth (more people, more media companies, and more agencies) but changed very little since 2000. Here are my revised, emboldened predictions for Hispanic marketing in 2011:

Prediction #1 – The death of the Hispanic advertising agency
2010 was most definitely the year of the full-on assault on Hispanic advertising agencies (starting with the Home Depot controversy in April, Crispin Porter’s absorption of Burger King Hispanic in August, and the ANA Multicultural Conference controversy in September). 2011 will no doubt see a continued push by general market agencies into the Hispanic market. Not only will they continue this push by staffing up on Hispanic advertising talent, but also through acquisitions (I have firsthand knowledge of at least a few such acquisitions plans from some big ad agency players). Moreover, marketers, particularly those in “minority-majority” markets such as Los Angeles, will begin to follow El Pollo Loco’s lead and consolidate their Hispanic and General Market advertising accounts. Add in the fact that Hispanic ad agencies have been painfully slow in building digital capabilities (they’ve made a valiant “too little, too late” effort during the last 12-18 months), and the writing is on the wall – the start of a slow death for the Hispanic advertising agency model as we now know it.

Prediction #2 – Hispanic PR officially becomes Hispanic Social Media
2010 was also the year that Hispanic PR agencies took the plunge and fully embraced social media as the future of their industry. The success of the inaugural Hispanic PR & Social Media Conference and the LATISM Latino2 tour highlighted the coming of age of Hispanic social media. Hispanic bloggers and social media influencers are establishing themselves as the key centers of influence in the Hispanic community. This was coupled with the continued decline in Spanish print media (magazines and newspapers), which has started to feel the decline in readership resulting from consumer’s shift online and the recession. Looking ahead at 2011, I see a continued decline in Hispanic print coupled with an equally sharp rise in niche and “long-tail” Hispanic digital publishers (whether they are bloggers, Facebook influencers, or small Websites) – with what were formerly “Hispanic PR” agencies and professionals positioning themselves as the expert guides of this growing and increasingly prominent Hispanic social media space.

Prediction #3 – Digital leap-frogs “Hispanic”
During the boom years of Hispanic digital (2005-2008), the Hispanic digital media market looked a lot like the Hispanic traditional media landscape – a handful of prominent Spanish-language portals / mega-publishers that owned the market (e.g. Batanga.com, Univision.com, Terra.com, and Starmedia.com), surrounded by a lots of smaller upstart ad networks (e.g. Gorilla Nation, HispanoClick, Consorte Media) and a handful of general market publisher extensions into the Hispanic market (e.g. ESPNDeportes.com, CNNEspanol.com, etc.) that got the scraps. During the last 12-18 months, the Hispanic digital media market has fragmented, led by technology such as behavioral targeting, demand side platforms (DSPs) and ad networks with immense scale and reach. While the Univision.com’s and Terra.com’s of the Hispanic digital media market will not be going away anytime soon, their days as “market makers” are numbered. Looking ahead, as Hispanic digital media consumption becomes more social (Facebook) and personal (mobile), and mirrored Spanish Websites /microsites become a relic of the past (recent AOL research and Best Buy’s well chronicled experience shows that Hispanic consumers have come to view Spanish sites as inherently inferior to “main” English language sites), the Hispanic digital marketing space will be unlike anything veteran Hispanic marketers have grown accustomed to seeing in their analog Hispanic world.

Prediction #4 – The multicultural mainstream becomes a reality
Multicultural consumers already make up 35% of the entire U.S. population. Guess what will happen to that percentage when the 2010 Census numbers come out this spring? Welcome to the new “multicultural mainstream” – a new America where close to 40% of the overall population is multicultural (Hispanic, Black, Asian and multi-racial). DMA’s like Los Angeles, Dallas, Houston, Miami, Atlanta, and Washington, DC are already “minority majority” markets (Hispanics, Blacks and Asians combined make up more than 50% of the total population) – expect cities like New York and Chicago to join the list in 2011. This will only put more pressure on advertisers, particularly regional ones, to re-assess how they allocate marketing resources to ethnic groups like Hispanics. My theory is more of the “El Pollo Loco” phenomenon from Prediction #1 – as advertisers consolidate their Hispanic (and other multicultural marketing efforts) with their general market ad agencies.

Prediction #5 – The birth of the Hispanic Youth Market
The last few years have seen a steady increase in dialogue, events and attention among marketers about the Hispanic youth market (Hispanics under the age of 24). The statistics are already mind-boggling:
• In 13 years, 50% of Americans under 18 will be minorities (Source: U.S. Census Bureau)
• 80% are US-born (Source: University of California, San Francisco)

I predict that the 2010 Census figures regarding Hispanic Youth will be the most unexpected… and growing. Yet the Hispanic youth market represents a conundrum for Hispanic marketers – a growing market that increasingly identifies and shows pride in its Hispanic heritage but consumes very little Spanish-language media and sees the world through color-blind lenses. This will be the toughest nut to crack for marketers and advertising professionals of all stripes – general market, Hispanic, digital, direct response, social media and everything in between. Yet I see Hispanic youth as the biggest marketing opportunity to come out of 2011.

Think of 2011 as the year of creative destruction in Hispanic marketing – some things will die, a lot will change, and brand new opportunities will sprout from the ashes.

As I was scrolling through about 40-50 names (of people I didn’t actually know), I was struck by how many of the names that came up were Hispanics. Literally, there were somewhere in the vicinity of 75% Hispanics surnames (and names). The other 25% were evenly split among Caucasians, Asians and African-Americans.

I’ve always felt that there are all sorts of untapped opportunities for B2B marketers, brands targeting affluent consumers, and recruiters to reach Hispanics on platforms like LinkedIn. But interestingly, no one ever brings up LinkedIn in the context of Hispanic marketing. In fact, it’s never discussed, and the same goes for African American, Asian and other multicultural marketing. Facebook and Twitter always get all the attention.

I know our agency has used Linkedin with great success for financial service and government clients.

Maybe Linkedin’s big IPO will bring more attention to the professional social networking powerhouse. The attention would definitely be well deserved.

More importantly, I promised an attempt at the billion dollar question of how marketers could successfully utilize social media to reach Hispanics. In anticipation of an answer to that question, we need to start with the right research and approach. In an article I wrote last September I noted that “our industry needs more robust qualitative research and behavioral models… to smartly ‘go to market’ with Hispanics in social media.” I think personas might just be the right framework.

Personas are user archetypes that help guide decisions about product features, navigation, interactions and visual design. Since their introduction in the late 90s, they have grown in use from being a tool used mostly in the software industry to becoming a central planning tool within the Web and digital advertising community. Personas, in their traditional form, are synthesized from ethnographic research with real people and then summarized in one- to two-page descriptions that include behavior patterns, skills, attitudes and environment combined with a few fictional personal details to bring the personas to life.

I think personas provide an effective tool that can be evolved to include psychographic data (among other types of qualitative research) to help brands effectively navigate the Hispanic social media waters. It is for that reason that our team at Sensis undertook what we are calling the Hispanic Persona Project.

The Hispanic Persona Project is a primary research effort aimed at creating personas that represent the U.S. Hispanic Internet population. The project methodology consisted of over 60 ethnographic interviews with Hispanics across acculturation levels, geographies, and nationalities. Understanding the inherent complexities of clustering 30 million diverse Hispanics into 4-5 personas, our goal was to introduce a new framework to guide Hispanic marketing across the POEM (Paid, Owned, Earned Media) spectrum. We also wanted to start a robust discussion about new market research and planning tools to use in a world of over 50 million Hispanics, more than half of which are U.S. born.

We will be unveiling the results of the Hispanic Personas Project during a live, interactive session at the 2011 Hispanicize Conference in Los Angeles, CA. In addition to publishing a report with the Hispanic Personas at Hispanicize, we will be providing attendees with a unique opportunity to interact with the personas, via an interactive panel of live consumers representing each of the Hispanic personas.

In advance of unveiling of the formal research, I can share information on three of the Hispanic Personas we have created:

As you can see from these high level personas, they focus on digital behavior and mindsets, not demographics. While personas have historically been used only to plan digital “experiences” in owned platforms – such as Websites, kiosks or apps – they clearly provide important texture to plan earned media initiatives, particularly in interactive and two-way social environments.

Finally, I’ll leave you with some interesting topline results from our research:
• U.S. Hispanics are heavy social media users – almost all of interviewees noted that the first thing they do when they go online is check email and Facebook – very often from mobile devices.
• “The young teaching the old” – younger Hispanic ‘super users’ are teaching the late adopters how to use new technology and introducing them to new digital trends.
• Evolution from old social media platforms to new ones – U.S. Hispanics have migrated from Hi5 and MySpace into Facebook. The only people who are still on MySpace are artists and musicians.
• Online Advertising – Interviewees mentioned they are likely to click on online ads if they are relevant to their interests or contextually relevant, particularly hyper-targeted Facebook ads.
• Mobile Internet – most interviewees had smartphones. Those who do not have one are considering buying one.

In my last installment of this 3-part discussion, we’ll take the final results of the Hispanic Persona Project and talk about applying them in the real world of Hispanic social media.

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.

I made the bold prediction almost a year ago today that Hispanic marketing was in for big changes in 2011. I have to admit I think I will be proven wrong.

I think 2011 will result in even more changes than I boldly forecast last year. In fact, I think by the time 2012 rolls around, we’re barely going to recognize the Hispanic marketing space that has seen tremendous growth (more people, more media companies, and more agencies) but changed very little since 2000. Here are my revised, emboldened predictions for Hispanic marketing in 2011:

Prediction #1 – The death of the Hispanic advertising agency
2010 was most definitely the year of the full-on assault on Hispanic advertising agencies (starting with the Home Depot controversy in April, Crispin Porter’s absorption of Burger King Hispanic in August, and the ANA Multicultural Conference controversy in September). 2011 will no doubt see a continued push by general market agencies into the Hispanic market. Not only will they continue this push by staffing up on Hispanic advertising talent, but also through acquisitions (I have firsthand knowledge of at least a few such acquisitions plans from some big ad agency players). Moreover, marketers, particularly those in “minority-majority” markets such as Los Angeles, will begin to follow El Pollo Loco’s lead and consolidate their Hispanic and General Market advertising accounts. Add in the fact that Hispanic ad agencies have been painfully slow in building digital capabilities (they’ve made a valiant “too little, too late” effort during the last 12-18 months), and the writing is on the wall – the start of a slow death for the Hispanic advertising agency model as we now know it.

Prediction #2 – Hispanic PR officially becomes Hispanic Social Media
2010 was also the year that Hispanic PR agencies took the plunge and fully embraced social media as the future of their industry. The success of the inaugural Hispanic PR & Social Media Conference and the LATISM Latino2 tour highlighted the coming of age of Hispanic social media. Hispanic bloggers and social media influencers are establishing themselves as the key centers of influence in the Hispanic community. This was coupled with the continued decline in Spanish print media (magazines and newspapers), which has started to feel the decline in readership resulting from consumer’s shift online and the recession. Looking ahead at 2011, I see a continued decline in Hispanic print coupled with an equally sharp rise in niche and “long-tail” Hispanic digital publishers (whether they are bloggers, Facebook influencers, or small Websites) – with what were formerly “Hispanic PR” agencies and professionals positioning themselves as the expert guides of this growing and increasingly prominent Hispanic social media space.

Prediction #3 – Digital leap-frogs “Hispanic”
During the boom years of Hispanic digital (2005-2008), the Hispanic digital media market looked a lot like the Hispanic traditional media landscape – a handful of prominent Spanish-language portals / mega-publishers that owned the market (e.g. Batanga.com, Univision.com, Terra.com, and Starmedia.com), surrounded by a lots of smaller upstart ad networks (e.g. Gorilla Nation, HispanoClick, Consorte Media) and a handful of general market publisher extensions into the Hispanic market (e.g. ESPNDeportes.com, CNNEspanol.com, etc.) that got the scraps. During the last 12-18 months, the Hispanic digital media market has fragmented, led by technology such as behavioral targeting, demand side platforms (DSPs) and ad networks with immense scale and reach. While the Univision.com’s and Terra.com’s of the Hispanic digital media market will not be going away anytime soon, their days as “market makers” are numbered. Looking ahead, as Hispanic digital media consumption becomes more social (Facebook) and personal (mobile), and mirrored Spanish Websites /microsites become a relic of the past (recent AOL research and Best Buy’s well chronicled experience shows that Hispanic consumers have come to view Spanish sites as inherently inferior to “main” English language sites), the Hispanic digital marketing space will be unlike anything veteran Hispanic marketers have grown accustomed to seeing in their analog Hispanic world.

Prediction #4 – The multicultural mainstream becomes a reality
Multicultural consumers already make up 35% of the entire U.S. population. Guess what will happen to that percentage when the 2010 Census numbers come out this spring? Welcome to the new “multicultural mainstream” – a new America where close to 40% of the overall population is multicultural (Hispanic, Black, Asian and multi-racial). DMA’s like Los Angeles, Dallas, Houston, Miami, Atlanta, and Washington, DC are already “minority majority” markets (Hispanics, Blacks and Asians combined make up more than 50% of the total population) – expect cities like New York and Chicago to join the list in 2011. This will only put more pressure on advertisers, particularly regional ones, to re-assess how they allocate marketing resources to ethnic groups like Hispanics. My theory is more of the “El Pollo Loco” phenomenon from Prediction #1 – as advertisers consolidate their Hispanic (and other multicultural marketing efforts) with their general market ad agencies.

Prediction #5 – The birth of the Hispanic Youth Market
The last few years have seen a steady increase in dialogue, events and attention among marketers about the Hispanic youth market (Hispanics under the age of 24). The statistics are already mind-boggling:
• In 13 years, 50% of Americans under 18 will be minorities (Source: U.S. Census Bureau)
• 80% are US-born (Source: University of California, San Francisco)

I predict that the 2010 Census figures regarding Hispanic Youth will be the most unexpected… and growing. Yet the Hispanic youth market represents a conundrum for Hispanic marketers – a growing market that increasingly identifies and shows pride in its Hispanic heritage but consumes very little Spanish-language media and sees the world through color-blind lenses. This will be the toughest nut to crack for marketers and advertising professionals of all stripes – general market, Hispanic, digital, direct response, social media and everything in between. Yet I see Hispanic youth as the biggest marketing opportunity to come out of 2011.

Think of 2011 as the year of creative destruction in Hispanic marketing – some things will die, a lot will change, and brand new opportunities will sprout from the ashes.

As digital continues to turn the advertising world on its head, you’ve no doubt heard digital marketing evangelists talk about the need to “lead with digital.” What they are typically referring to is 180 degree change away from the common marketing approach of starting with traditional marketing programs and then extending them to digital channels. The argument being that as digital media (including Web, social and mobile) takes a larger piece of consumers’ media consumption pie and fundamentally changes how they interact with advertising that advertisers must fundamentally change their marketing strategies to align with new digital realities.

There are countless and growing examples of marketers embracing this philosophy – including extreme cases where marketers have completely forgone traditional channels in favor of digital or brands have hired digital agencies as their lead (or only) agency of record. Less extreme examples can be seen in trend towards traditional creative (TV and out-of-home for example) that looks and feels increasingly like online banner / rich media ads or the trend towards driving to the Web or mobile as the primary call-to-action on direct response offline campaigns.

What if a rebellious brand led their Hispanic marketing efforts with digital? The prevailing wisdom in the Hispanic marketing world has always been that digital is important, but not that important, what with a majority of Hispanics still digitally divided or lacking tech sophistication. What would be the fate of such an anti-establishment brand? What would “leading with digital” even look like in the Hispanic market? Let’s deconstruct a Hispanic ad campaign and see some examples of what a digital-driven approach might look like:

Campaign Planning

Campaign Objectives – During the “Mad Men” era of advertising (which I would argue continues to this day in Hispanic advertising), campaign objectives were always a “one-way street” – with objectives like increasing awareness or same-store sales. Digital made advertising a two-way game, and as such, effective advertising has to do so much more. Yet most Hispanic advertising objectives are still about being the loudest megaphone. If a Hispanic campaign started with digital, objectives such as interactivity, engagement, utility and word of mouth would inevitably take center stage (this is not the case for most Hispanic advertising today.) This new set of digitally-relevant marketing objectives lends themselves well to marketing frameworks, such as marketing funnels or consumer journeys, with corresponding metrics and the ability to establish pre-launch campaign projections.

Research – Every good ad campaign, regardless of target audience, starts with sound research. Yet most Hispanic ad campaigns start with analog research (traditional focus groups, consumer research panels, etc). Are their purely digital alternatives? I would argue that there is an incredibly powerful insight “fountain” currently available using social monitoring tools like Radian6 to listen to Hispanic consumers online. Think of it as the world’s largest focus group, except completely organic. With Hispanics heavily engaging in social media, there is a real opportunity to uncover powerful and actionable Hispanic insights. Unfortunately, it’s more work that just hiring a research firm to recruit participants for 4 focus groups or subscribing to a research tool. Taking it one step further, if you can build an online community of Hispanics tied to your brand that you nurture over time, you have the potential to continually tap into a new kind of focus group indefinitely (at a much lower cost)

Concept & Copy Testing – One of the biggest benefits of leading with digital is the ability to make quick and inexpensive mistakes. This is particularly important for brands or companies that are new to or have been out of the Hispanic market for some time (and will need to fine-tune their initial Hispanic programs). While copy testing is anything but new, utilizing text-based ads targeted to Hispanics (by market if appropriate) on Google, Bing and Facebook can provide quick and cheap feedback on concepts, copy and keywords that will resonate with Hispanics. Taking this approach further, creative testing using multiple iterations of banners can provide art direction feedback from a real-life “lab” of online Hispanics. If focus groups are a must, online versions provide valuable qualitative results at a fraction of the time and expense.

Campaign Development

Content Development – A sound digitally-driven Hispanic marketing campaign with objectives such as engagement, utility or word of mouth activity requires a different approach to creative development. A perfectly executed .30 second TV spot combined with a series of radio, print, and out-of-home ads will not be enough to achieve such interactive goals. Instead, creative production must be replaced with content development – a different approach that emphasizes multi-form creative that can live in various formats and lengths that tells a longer story. The content development approach emphasizes producing all forms of content (video, imagery, textual) that can deepen Website experiences, drive social engagements and spur viral communication – all while still providing for TV, radio and print ads. This nuanced, by significant change in approach, is akin to brands thinking like publishers and media companies.

Campaign Launch

Changes in how brands and companies launch and manage Hispanic ad campaigns represent the biggest opportunities in this digitally-led approach.

Digital Pre-launches – Most Hispanic advertising starts offline and then migrates online. Why not do the opposite? Digital creative typically takes less time to produce and digital media can be quickly planned, bought and trafficked, so why not launch pilot campaigns online before extending offline to more expensive, time-consuming and inflexible channels like TV, radio and out-of-home?

Digital pre-launching not only provides an opportunity to test concepts and copy as noted above (including all important questions of language – Spanish, English or both?), but can also provide invaluable data that can inform Hispanic campaign objectives, market selection, and media plans, both offline and online! Pre-launches can be run from a few weeks to a few months, but the benefits can be significant.

Digital Measurement – Most Hispanic marketing programs are evaluated post-mortem: “that network TV buy performed well in Phoenix” or “that print ad failed to drive call-center activity.” Taking a digital-driven approach means prioritizing real-time measurement tools such as third-party ad serving, Web analytics, and social media tracking tools to impact and influence campaign decisions mid-stream. This approach yields info on which top performing digital creative that can influence creative placements and rotations. Web analytics data on campaign microsites and landing pages can provide important geo-market results that can impact media weighting offline.

Hopefully you can see from this quick analysis that leading with digital in the Hispanic market is not about irrationally abandoning traditional media channels. Instead, it’s about drastically changing how Hispanic campaigns are planned, developed and managed. Keeping in mind that a large number of Hispanics are still not online, a thoughtfully executed digitally-driven approach to Hispanic advertising can bear significant fruit and take our industry to the next level.