|Alberto J. Ferrer|
"The numbers" are the well-known, well-rehearsed, and well-worn statistics about the Hispanic market from a variety of blue chip sources. These figures populate every Why Hispanic? presentation given to every client in the country.
From the US Census alone we get a few popular ones:
- Hispanics are the largest minority group in the country, representing 15% of the population and growing at four times the rate of non-Hispanics.
- On average Hispanics are ten years younger than the general population.
- One in five people under 35 is Hispanic.
While the median household income among Hispanics is about $34,000 versus about $43,000 for the total US (that's higher than many people think), Hispanics spend more of their income than non-Hispanics, driving a higher volume of dollars available for consumption.
One of my personal favorite stats is that buying power among Hispanics is projected to grow at almost double the rate of non-Hispanics, exceeding $1 trillion by next year. That's $1,000,000,000,000 in buying power! (You can read an abstract of the full report from the Selig Center at the University of Georgia in a 1.43 MB PDF here.)
Marketers should focus on that: a market that's worth a trillion dollars in buying power. Of course, there are many more specific stats that underscore the importance of this group to US business, but the point here is that Hispanics represent a very large business opportunity.
With all this data, why is Hispanic Marketing still such a small portion of total marketing investment in this country? Why are there still, to this day, companies that have not entered the market and companies that have barely dipped their toes in the water? Why is it, for example, that in a market like Los Angeles, where Hispanics are actually the majority, Hispanic Marketing is not the dominant marketing activity?
Ad spending growth in Hispanic media this year will be more than double that of the total market, according to TNS Media Intelligence. That's encouraging, but we still have a lot more room to grow to even approach appropriate levels of marketing investment in this very fast-growing group. According to the Right Spend Study II by the Association of Hispanic Advertising Agencies, leading Hispanic market advertisers historically have spent 3.2% of their budgets targeting Hispanics. Just imagine the non-leaders. I'm no math major, but 3.2% of marketing investment to target 15% of the population seems a bit off to me.
I do want to be clear about one thing. Companies should invest in marketing to Hispanics because it is a real business opportunity. Marketers should not look at Hispanic Marketing as "the right thing to do" for any other reason than because they can grow their business.
That means that companies should aggressively set goals for their Hispanic market efforts, develop robust plans that seek to deliver those objectives, and measure their impact. Companies should view their Hispanic Marketing budget as an ROI-generating investment, not as a cost of doing business or cost of good PR.
Done right, a dollar spent targeting Hispanics will generate a higher return than the same dollar allocated to the general market. We've proven it with our clients, who are already reaping the rewards of getting into the market early. That's why I'm in this business. Not only because I'm passionate about the market, but also because there is a real, substantial business opportunity for smart marketers who make it a business priority and invest accordingly.