Happy Cinco de Mayo! Do you know what it means? Has it become the "Hallmark Holiday" for marketing to U.S. Hispanics? Since today raises many questions and challenges about marketing to U.S. Hispanics, let's use it as a springboard for better understanding of this audience and the new online tools we can use to market to them.
While beverage companies in particular have defined the day as a "fiesta" with a vaguely Mexican or "Latin" flavor, most Mexicans do not even observe it in their country of origin. And many Americans misinterpret the holiday to be Mexican Independence Day, which is actually Sept. 16. More significantly, it means absolutely nothing to the 36 percent of U.S. Hispanics that aren't Mexican.
Without question, U.S. Hispanics have become very important among marketers not only because of their sheer size (44 million Hispanic consumers according to the 2006 U.S. Census data), but also because they will grow to 105 million by the year 2050. As this generally younger audience makes brand decisions, U.S. Hispanics represent an opportunity for many marketers to grow their business among a relatively underserved market, which is more open to product suggestions.
At the same time, marketing to U.S. Hispanics brings many challenges, including the multitude of countries of origin, levels of acculturation and usage of Spanish, English or both languages. In addition, Hispanic internet penetration is still quite low relative to the overall U.S. population (but much higher than in countries like Mexico). eMarketer says that 20 million Hispanics are online today, growing to 24 million in 2011.
The complexity of reaching this audience can intimidate many marketers as the potential for making mistakes is high. Fortunately, new online targeting technologies have ushered in a new chapter: marketers can now grow awareness and sales among U.S. Hispanics, overcome the challenges and create effective marketing campaigns that segment their target audiences correctly with measurable results.
In this article, I have brought together 10 experts from Ford, Google, eMarketer, AOL Latino and Terra, as well as leading authors and entrepreneurs who can help you avoid the mistakes in reaching this growing audience online and provide a roadmap of best practices. Following are their suggestions. Please comment or leave questions below, and be sure to check out the list of resources at the end of the article for more in-depth statistics and insights.
Recognize differences between the online versus overall Hispanic market
Maria Lopez-Knowles, SVP at MRM Worldwide (McCann Worldgroup) and author of the insightful white paper "The Online U.S. Hispanic: First and Second Generation Insights," says that "the online Hispanic is primarily English-language dominant and probably U.S. born. They are more often than not bilingual and bicultural and will remain so for their entire life (migrating through hyper-acculturation and retro-acculturation along the way). Taking a bilingual/bicultural approach to marketing that is culturally, linguistically and intellectually relevant is critical to connection and, quite frankly, to success.
"Offline Hispanics tend to be Spanish-language dominant and they are effectively targeted through Spanish language media (e.g. radio, television)," according to Lopez-Knowles. "This group is reached and touched by Spanish language marketing efforts. They are acculturating and/or acculturated, but don't necessarily require bilingual/bicultural efforts. So while cultural, linguistic and intellectual relevance is key, a bilingual/bicultural approach isn't as significant. A monolingual, Spanish-language, in-culture approach makes sense in most cases."
Don't use a "one size fits all" proposition
Debra Aho Williamson, senior analyst and author of eMarketer's comprehensive "Hispanic Americans Online: A Fragmented Population" report, says, "Language is only the first of many decisions marketers must make when they create an ad campaign aimed at this rapidly growing population. Because Hispanic people come from many countries and have varying income, age and acculturation levels, marketers must segment their communications to effectively reach the fragmented population.
"This advice is true in the online and offline environments but becomes especially critical when marketing to Hispanic people online," Williamson says. "The online Hispanic population has a patchwork of usage patterns and is not a homogenous population. For example, just 46 percent of the total U.S. Hispanic population will use the internet on a regular basis this year, according to eMarketer's latest estimate. However, English-dominant Hispanics are far more likely to use the internet than those for whom Spanish is the predominant language -- 78 percent of English-dominant Hispanic adults do, versus 42 percent of Spanish-dominant Hispanic adults, according to Pew Hispanic Center."
Understand your market demographically and psycho-graphically
Teresa J. Soto, president and CEO of About Marketing Solutions and author of "Marketing to Hispanics: A Strategic Approach to Assessing and Planning Your Initiative," says, "The usage is there, the engagement is there. It is really just a matter of knowing your target, having a strategy that makes sense for them. The problem is that companies get so overwhelmed by their perception of a complex market -- but the truth is that these same companies seldom do the same type of upfront homework to develop strategies for this marketplace. Unfortunately, most companies targeting this marketplace are implementing tactics, not strategies."
Regarding what language should be used to market to U.S. Hispanics, Soto says that "it depends on the segment being targeted. For example, the Hispanic youth market would be targeted as a youth segment with their language being used as first English then slang and Spanglish. How much of each depends on the market (e.g., Spanglish dominates in a market like San Antonio), so the approach depends on general youth trends with a Hispanic culture overlay."
Focus on relationships and engage in a relevant dialogue
Felipe Korzenny, Ph.D., director of the Center for Hispanic Marketing Communication at Florida State University and author of "Hispanic Marketing: A Cultural Perspective," says, "Hispanics online have shown to be relatively sophisticated web users. As with most other online programs, the establishment of relationships is very important. In the Hispanic market it is even more important because of cultural tendencies towards group cohesiveness. Showing an understanding of the culture with images and relevant messages is more likely to keep Hispanic consumers coming to a site, but this has to be done tastefully and not in a patronizing way. Also, understanding that these consumers are more likely to have blogs and websites, as our studies have found, connecting with them online via dialogue and relevance is more likely to be effective. When Hispanics are online they tend to want to replicate their interpersonal relationship networks in cyberspace."
With this in mind, Dr. Korzenny recommends the following for marketers. "Hispanics tend to be receptive to surveys and polls, but relevancy is the key. In addition, small, targeted efforts in highly specialized sites can be productive if these produce word-of-mouth synergies. Batanga, QuePasa and others can help stimulate word of mouth. Still, larger efforts should also include the large destinations, portals, networking sites that are visited by people not so much based on ethnicity but on relevance."
A recent study from PR firm Burson-Marsteller confirms the effectiveness of word-of-mouth campaigns by showing that the most influential Hispanic consumers, dubbed the Hispanic-fluentials, are more likely to use the internet to share their views about products and brands as compared to non-Hispanic online influencers. Theresa Rice, director, U.S. Hispanic for Burson-Marsteller, adds, "Hispanics cultivate the most extensive personal and professional networks both online and offline among the influentials studied, attesting to the potential effectiveness of grassroots and viral campaigns."
Utilize measurement and metrics
Dave Rodriguez, multicultural marketing communications manager at Ford Motor Company, says, "A primary challenge is building the business case. Having analytics in place to measure impact -- beyond CRT -- and conversions is critical. It's important to understand how digital leads to not only awareness, but ultimately its impact on shopping and sales.
He adds, "With an increase in the online options, it is important that proof of performance and guarantees on delivery be established upfront. Also, the bilingual growth requires that markers balance how messages are delivered in Spanish versus English or via both and provide the consumer with the options of opting in through language of choice. Behavioral and geo-targeting are of increasing value for more targeted programs, particularly given the regional concentration of the Hispanic population."
Looking ahead, Rodriguez says, "What is of increasing importance and value is the use of spotlight and floodlight tagging. This is providing the ability to assess how deep Hispanics consumers are going into our sites/shopping process. Plus, the tagging also will provide new opportunities for retargeting as they venture out on the web. This is the means by which we are most excited to maintain exposure and ideally optimize the chance for them to reach back to our sites/brands."
Focus on behavior
According to Ralph Rivera, VP and GM of AOL Latino and Latin America, "With offline media, the market is used to the adjacency model (furniture ads in home magazine) or the reach/frequency model (18-34 males for specific TV show). Offline cannot deliver against behaviors. Online media can because of the interactivity, tracking and targeting that is available. As such, an auto advertiser can reach an auto intender playing online games or reading email.
"Most marketers are realizing that online networks can deliver broad reach against the long tail of sites beyond the top three portals/verticals. What should also be included in these networks is country of origin sites, which are getting significant U.S. audiences."
Maria Lopez-Knowles of MRM Worldwide adds, "One of the key benefits of the internet is that it is a global platform. Visiting sites in other countries, reading content from foreign sources, engaging in dialogue with other individuals, provides marketers with data to serve up hyper-relevant advertising and messaging. Leveraging the knowledge that a consumer is reaching across geographical boundaries greatly informs the advertiser as to who that consumer is, what interests they may have, what languages they discern, what cultures they might be interested in, and so on.
"As more sophisticated tools are available, such as targeting (behavioral, contextual, registration-based, geo) and key word searches, finding these consumers is easier. Marketing to them with greater relevancy becomes more promising because it's based on actual past behavior [a good predictor of future behavior]. Advertisers can serve up relevant ongoing, interactive brand experiences by leveraging tagged cookie data from online searches, web visits/navigational paths, content views and shopping patterns."
Develop data-driven campaigns with testing and optimization
Alicia Morga, CEO of Consorte Media, an online ad network for Spanish-language sites in the U.S. and Latin America, says that "with good targeting technology, online marketers are able to try out different things to see what works and optimize campaigns instantaneously. For example, we found that in one of our client campaigns, the image we used of a blue house drove a higher response rate than a white house. In an offline campaign, you might never know which ad was more impactful, and even if you did figure this out, it would cost you considerably more time and money to change the ad."
"One of the biggest challenges in marketing to U.S. Hispanics online is figuring out how to effectively get in front of the audience online. The first part of the equation is 'where.' Not all Hispanics congregate at the large Spanish-language portals. Hispanic surfing and online behavior is highly eclectic and a 'one-size-fits-all' approach does not work."
"The second part of the equation is 'with what?' We use our own behavioral targeting technology that helps identify not only who is Hispanic, but what an individual will respond to. Relevant ads are then served to unique segments for optimal results. As with any other marketing group, it's important to be in the right place with the right ad."
Tap into search
Sarah Carberry, team leader at Google, says, "Connect with U.S. Hispanics at the right time and right place when receptivity is at its greatest. The consumer is choosing when to engage with your brand and signals their interest when they search for information on Google or on trusted content sites such as Univision or MySpace en Espanol. You can now tailor messaging to many niche markets, such as U.S. Hispanics, and target them with various ad formats in more places where consumers are throughout the web. This relinquishes marketers from the confines of traditional media where a standard design has been the norm."
Carberry recommends optimizing on the fly after seeing what keywords, channels and messaging are working best. Also, she says, "take advantage of Google's geo-targeting capabilities where there are higher concentrations of U.S. Hispanics. With AdWords, you can set your ads to show only to users within a certain radius of your business."
Follow the dynamic changes within the U.S. Hispanic audience, especially language
Paul Suskey, founder and co-CEO of Media8, a digital agency focused on the U.S. Hispanic and LatAm markets, says, "Executing and maintaining budgets that cover English/bilingual segments is a considerable challenge. Traditional and digital Hispanic shops may find it difficult within the language limitations set forth by the client and/or limitations available within media outlets that effectively reach these groups in mass. It's quite easy for a general market shop or client to think 'these sites and/or placements index well with Hispanics, no need for more.'"
In addition, Suskey says, "The increasing investment by brands seeking to reach the U.S. Hispanic market has applied pressure to media entry costs that, at times, restrict our ability to deliver and drive results comparable to a digital spend in the U.S. Reaching Hispanics under these circumstances, while maintaining comparable ROI and profitably goals, is an ongoing challenge.
"A tactic that has permitted us to overcome this inventory challenge is IP targeting (geotargeting), which has expanded our DR and brand placement opportunities exponentially. Isolating U.S.-based traffic on Latin American publishers has allowed us to combat increasing CPM levels from U.S.-based publishers who absorb the majority of the digital investment."
Do not wait!
Mark Lopez, COO of Terra Networks U.S.A, says, "You have to start leveraging the online engagement to communicate your offer and brand attributes today. Many clients delay marketing efforts 'waiting' for the next version of their in-language consumer site. Each day that clients are not engaging with this audience online is a lost opportunity to understand your single largest source of U.S. growth for the next 10-20 years.
"The biggest barrier today does not come from technology but our risk aversion as an industry to start learning about this audience. You have to commit resources and agree that it's OK to make mistakes if they help you learn to position your brand online."
Ad Age Hispanic Fact Pact (60-page PDF)
The Online U.S. Hispanic: First and Second Generation Insights (7th link down)