Rise of the Hispanic Boomer

Seasoned marketers often look back at the 1950s with great nostalgia. America was entering a new era in which post-war families were on the rise and home ownership was becoming a reality for many consumers. Marketers were filled with an overwhelming sense of optimism.

The vitality of that economy was based on the bright future of the American worker and his family. After all, it takes a lot of purchases to set up a household and raise children. And, consumer purchasing has always driven economic recovery and vitality in the US.

Today, a new American dream is on the rise, and it is just as vital and powerful as the one in the heyday of the baby-boom generation. The increase in the number of Hispanic consumers and their growing power account for much of the long-term prosperity of our dynamic economy.

The recognition of this sea change in our society is no longer the exclusive domain of savvy or visionary marketers—it marks the new mainstream of consumer marketing for many brands. And for those companies, these changes will mean the difference between prosperity or marketplace demise.

Key population trends are setting the stage for the new American mainstream. According to the US Census and the Pew Hispanic Center:

From 2000 to 2004, the US Hispanic population grew to more than 40 million—an increase of 14%.
By comparison, non-Hispanic growth saw a marginal increase of less than 2%.
Several forecasts predict that within the next five years one in four adults will be Hispanic.
The Hispanic population is younger by and has larger families than the national average.
The birthrate among Hispanic families is twice as high as the population in general.
The increase in the population of US-born Hispanics will account for an increasing amount of overall Hispanic growth.
Hispanic populations are beginning to spread geographically into states that are not traditionally Hispanic, such as Georgia, Oregon and Washington.
The Hispanic unemployment level is somewhat higher than that of the overall population, but it is lower than that of other groups, such as non-Hispanic African-Americans.

Admittedly, Hispanics have not yet amassed wealth or income levels equivalent to those of non-Hispanic consumers. However, half of US job growth since the 1970s is attributable to Hispanic population increases.

In the year following the 2001 recession, Hispanics recovered nearly all of the ground lost in the previous two years. And the rate of growth in the Hispanic consumer base has outpaced the economy's dampening effect on Hispanic income. As a result, the overall segment growth rate in purchasing power explains US marketers' increasing focus on Hispanic consumers.

One thing is clear: The rapid growth of Hispanic households is laying the foundation for the consumerism that will inevitably follow. Marketers who long for the days gone by of the baby boomer will recognize a familiar pattern in these fundamental population trends.

Marketers have responded, as evidenced by the reported $3.09 billion spent in advertising to US Hispanics in 2004, according to a HispanTelligence report from Hispanic Business, Inc. This level of advertising reflects an 11% increase over 2003, with continued growth projected to reach $3.6 billion in 2007.

Language preference decidedly plays a role in media choices. English-dominant households constitute 48.5% of total Hispanic households in the US; however, English-dominant households account for 60% of the disposable income, according to the report. Nevertheless, that alone is not sufficient reason to exclude Spanish-language advertising and marketing efforts.

Marketers face two important challenges:

First, there is a need to recognize that general market programs and campaigns will capture only a portion of Hispanic consumers. After all, various other factors—age, gender, acculturation level and language preference, among others—influence media preferences.
Second, Hispanics do not have a single national identity. Much like the rest of America, there are various subcultures based on country of origin, language, acculturation level, US region of residence, education and other factors. Three Hispanics in five can trace their heritage to Mexico; the remaining 40% have ties to Puerto Rico, Cuba, and Central and South America. The differing cultures and mindsets among these consumers are as varied as those among consumers in European states.

Accordingly, marketers must take deliberate steps to understand more about their target consumer. One size does not fit all. And if a brand is attempting to connect within a specific geographic market, there are certain practices, icons and cultural preferences that can be employed in their marketing communication.

However, marketers face a challenge when advertising on national cable networks such as Telemundo or Univision. They must craft messages carefully to reach common touch-points for Hispanics living in the US. Considerations include avoidance of regional slang, colloquialisms or images that in effect say to certain viewers: "This message is not intended for you."

When wading into the new American mainstream, marketers can take the following three steps to ensure success in connecting with Hispanic consumers:

1. Hire skilled communication professionals

Companies can certainly claim expertise in their primary area of business, whether consumer electronics, automotive equipment or food distribution. However, their expertise may not extend to the creation of effective advertising or marketing programs. Special skills and experience are required to create effective communication that connects with Hispanic consumers on both a rational and an emotional basis. Having your office assistant whip something up in PowerPoint is not going to optimize the effectiveness of your marketing dollars.

Instead, look for an advertising agency with a primary focus on Hispanic advertising and a record of success for brands with Hispanic consumers. Such agencies are likely members of the Association of Hispanic Advertising Agencies (www.ahaa.org)—the first professional organization established for agencies in the US Hispanic advertising industry. In partnership with Advertising Age magazine, AHAA annually sponsors the Hispanic Advertising Awards. Examples of award-winning campaigns in 2004 include those from Citibank, Toyota and Energizer.

2. Know your audience

Hispanic consumers are one of the fastest-growing areas in consumer research. The success of any advertising campaign or marketing program can be enhanced by involving members of your target audience in the creation of your marketing.

Within the advertising industry, account planners are responsible for gathering the consumer insights that are needed for create meaningful, engaging and compelling advertising. Account planners are the architects of brand communication strategy and use both traditional and innovative research techniques (see www.apg.org.uk). Despite the seeming appeal of such a logical approach to advertising, account planning is not practiced by most advertising agencies, and the number of experienced account-planning practitioners is in the hundreds—not the thousands.

The scarcity of skilled account planners, in general, and those experienced in Hispanic culture, specifically, makes finding a Hispanic account planner a tough task. To ensure success for your brand communication strategy, make certain that your advertising agency offers the services of an experienced account planner fluent in Hispanic culture.

3. Recognize geographic and cultural factors

If your efforts are confined to a single market, you can be more regionally specific in what you say and how you say it. Conversely, if you have a broader national Hispanic target, you must ensure that your message is inclusive and does not alienate potential customers.

Across the US, there is great diversity among Hispanics. For example, Miami is dominated by Hispanics of Cuban origin. Most of San Antonio's population has its roots in Mexico. In New York, there is a Puerto Rican population of more than 700,000, and the recent decline in their numbers has been offset by the increase in the numbers of Dominican-Americans. Advertising targeted to Hispanics must consider the geographic and cultural differences among Hispanics.

According to Simmons Hispanic Survey and Spectra Marketing Systems, 53% of US Hispanics consider themselves "bi-cultural." These consumers identify with both the dominant US culture and the culture of their heritage. This dual allegiance presents tremendous marketing opportunities—and formidable obstacles.

* * *

Staying in touch with the Hispanic boomer is a challenging assignment. Online resources can help you keep up with this dynamic segment and the marketing efforts being expended to connect with them. Here's a sampling to get you started:

Hispanic PR Wire (www.hispanicprwire.com) is a hub for news about the latest ad campaigns, marketing programs, sponsorship and media aimed at Hispanic consumers. This Web site is great place to check up on your competitors' initiatives. It's pretty amazing what some marketers will reveal about marketing strategy for purposes of a press release.
Hispanic Business (www.hispanicbusiness.com) is an online journal that chronicles a wide range of Hispanic business issues and cultural trends. Editorial topics include the fastest-growing Hispanic companies, the 100 most influential Hispanics, best graduate schools for Hispanics and a comprehensive media markets report.
SuperOnda (www.superonda.com) is a contemporary magazine targeting Hispanic youth with the resources they need for career success and cultural awareness. The publication provides comprehensive coverage of news, politics and entertainment. In addition, it provides access to educational and career information.
Marketing y Medios (www.marketingymedios.com) is a professional journal of Hispanic advertising and marketing from the publisher of AdWeek. It tracks the comings and goings of clients, agencies, media and the industry's movers and shakers.

Success in marketing requires that a brand connect with its consumers in an engaging, relevant and meaningful way. That approach applies to brands that wish to foster a relationship with Hispanic consumers. And if advertising is a conversation, successful companies will first ask questions, then do a lot of listening, before speaking to Hispanic consumers in either language.

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ABOUT THE AUTHOR

Mitch McCasland (mmccasland@moroch.com) is director of insight and brand strategy at Moroch Partners (www.moroch.com) and a leading advocate of using customer insights and competitive intelligence as a basis for brand strategy, advertising, and new product design.