KATHI MOORE, engagem3nt CEO, INTERVIEW WITH ELECTRONIC RETAILER MAGAZINE, April 2010

What makes the US Hispanic market so appealing to direct response marketers?
There are several answers to that question.  First, the sheer size of the market makes it appealing as a target.  With a population estimated at 48,000,000, The US Hispanic market is actually larger than the population of many countries, including Canada, Spain, and Australia.  And the population continues to grow.  It is estimated that by the year 2050, the US Hispanic population will top 133,000,000 persons.  That is a market too large to ignore. 
Another item to consider, the US Hispanic consumer is highly responsive to direct response offers.  Simmons noted in a 2009 study that while 11% of US general market consumers will make a purchase via direct response, fully 15% of US Hispanics will do the same. 
The responsiveness of the market is made even more attractive when you consider the loyalty of the group.  Hispanic shoppers are brand loyal, and commitment oriented.  We have clients that report higher stick rates for continuity from their Hispanic customers than those achieved in the general market. 

What type of purchasing power does this demographic have?
In 2004, the US Hispanic market wielded $686 billion in purchasing power, according to the University of Georgia’s Selig Center for Economic Growth.  Since then, that number has grown rapidly, with projected purchasing power for 2010 estimated to reach as much as $1 trillion.  That purchasing power makes the US Hispanic market the world’s ninth largest economy.
In these last two years, while the American economy floundered and consumers tightened their belts,   growth in Hispanic spending was twice the growth in general market spending, according to a December 2009 analysis of consumer expenditures and corporate growth strategies by the Latinum Network. This same analysis points out the strong opportunities for marketers that exist in categories where Hispanic consumer spending growth outpaced the general market. This includes beauty, computers, education, food away from home, laundry and cleaning supplies, major appliances, vehicle finance and insurance, and women's apparel.    

For example, from 2007 to 2008:

U.S. Hispanic consumers were responsible for 30% of the $40bn growth in the food business

U.S. Hispanics spent 58% more on education compared to a much more modest increase of 9% for non-Hispanics

U.S. Hispanics increased their entertainment spend on fees and admissions by 14% as compared to a 7% decline for non-Hispanics.

As an agency that focuses on multiple channels, which mediums are the most effective in reaching U.S. Hispanics?
Television continues to be the reigning powerhouse for reaching the US Hispanic consumer.  The good news for marketers is that new stations are being created each year, as formerly general market channels are converted to Spanish language.  In addition, imported networks from Mexico, Central and South America are expanding the media universe. 

If the product is appropriate to the medium, radio also represents a very strong method of reaching the US Hispanic customer.   As in general market, the format specific nature of radio programming allows a marketer to reach the right prospect.  From a reach standpoint, many of the top ranked radio stations in leading DMA’s are Hispanic stations.  The challenge with Hispanic radio is identifying the right programming environment for your product or service.  Unlike general market radio, the foreground talk format that has driven successful radio direct response for many years is not dominant.  But over the years we have been able to identify the appropriate environments and have had much success with radio campaigns.

Online penetration for the US Hispanic consumer continues to increase.  The Simmons study noted above also tells us that 82% of US Hispanics have online access.   The market is online, and is transacting business in that environment.   However, to date, one of our challenges has been the relatively lower percentage of online sales that can be attributed to US Hispanic campaigns.  We believe that some of this disparity is due to the bi-lingual nature of the audience.  If you view product X in Spanish, then go online and purchase product X from their main (English language) website, there is no opportunity to attribute this purchase to the Spanish language campaign.   At Engagem3nt, we will continue to encourage our clients to expand their presence in the online marketplace, including the social media space.

Mobile marketing represents the next wave of US Hispanic opportunity.  The market over-indexes for cell phone usage as compared to general market, and is more likely to use their phone to reach the internet as well.  At the time of this writing, at Engagem3nt we are in the process of launching several new campaigns, both lead and order generating, which will include mobile as part of their overall marketing strategy.   This approach is so new that there are really no case studies to cite.  But given the powerful impact of the smart phone on consumer behaviors, and the advances in technology that allow business to be transacted in this manner, we are confident that mobile executions will come to be a welcome new addition to the direct response toolbox.

Print of course.  For lead generating service providers in particular, the “shopper wrap” and insert media opportunities have proven very efficient in the US Hispanic market.

And finally, and most unusual, is the grass roots event marketing and merchandising component.  Our experience has taught us that the US Hispanic market is festival and event oriented.  The family nature of these venues brings consumers out in droves.  A marketer’s presence at a large festival can garner lead capture, product sales, or sampling opportunities.  Merchandising support is a niche specialty at Engagem3nt, providing Spanish speaking in-store representatives for a company’s product or service.  The cost for “street teams” is much less than you might think, and can really open the door to market penetration in highly centralized population areas such a Los Angeles, New York, etc.

In terms of television media buying, should you concentrate primarily on Spanish-only networks?

The easy answer is yes.  The US Hispanic market is becoming increasingly bi-lingual.  However, the drive to view in-language programming encompasses more than just the ability to understand the language.  Clearly that is an important factor, but the types of programs offered are specific to the culture, and this can be very appealing to both the recent immigrant, and the more acculturated.  The telenovela format, for example, appeals to the market in a way that cannot be mirrored by a general market production.  Another factor that keeps viewership numbers high is ability to keep abreast of happenings in the home country.   Political, social and sports coverage from home can be very important to the US Hispanic viewer.

How can a media agency assist a marketer who’s just getting into this market?
Once a marketer has made the decision to enter the US Hispanic marketplace, choosing the right agency partner is critical.  Media is of course a big part of the equation. But well before media expertise comes into play, the full service agency will be able to assist the marketer in development of marketing strategy, creative, and setting up the back-end, operational infrastructure to support the campaign.   Vendor selections, such as call center, are key.  At Engagem3nt, we work with all of the top Spanish language call centers, and understand the various players’ strengths, as well as their weaknesses.  We know how each performs by category, and share that insight with our clients.  This allows them to make informed selections for all of their service providers. 

Another area in which the agency’s insight is critical is that of expectation.  By that I mean the client’s expectations regarding potential revenue.  We know how big the market is, and how much, realistically, a company can spend in the various media.  From experience, we have a sense of what the market can deliver in terms of dollars and cents.  We possess an informed opinion, by category, of all of the direct response key indicators:  cost per call, cost per order, average order value, conversion to sale, continuity stick rates, etc.  This knowledge allows our clients to enter the US Hispanic marketplace with a clear view of potential.  Naturally this aids in all aspects of their internal decision making processes, from finance, to supply chain to new product development.

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Engagem3nt  is a full service, response driven advertising agency, specializing in lead and order generating direct response marketing and advertising to the US Hispanic market.  At Engagem3nt it is our mission to engage the consumer.  Our focus on multi-cultural marketing is illustrated by the M3 in our name, which represents Multi-Channel, Multi-Cultural Marketing! 
Kathi Moore.  CEO/President.  949-258-4362.  kathi@engagem3nt.com     www.engagem3nt.com

Myth #1 Hispanics don’t have credit cards.
FACT Hispanics have credit cards…
and use them!
Credit Card usage dominates Hispanic purchasing behavior. In fact, 84% of Hispanic Direct Response Shoppers Have Used a Credit Card in the Past Year (That’s a 49% increase in credit card use among Hispanic DR shoppers since 2004 vs. only 11% growth among non-Hispanics).

Myth #5 Hispanics don’t have enough expendable income to buy my product.
FACT The projected purchasing power for the US Hispanic market in 2010 is estimated at $1 trillion dollars. This makes the market the 9th largest economy in the world.

Myth #2 The Hispanic market is too small to be worthwhile.
FACT U.S. Hispanics are the fastest growing population in the U.S.
2008 US Hispanic Population = 47,000,000 (or 15% of total US Population).
2050 US Hispanic Population (est) = 133,000,000 (or 30% of total US Population).

Myth #6 I’ve already spent a lot of money on my English campaign. It would cost too much to enter the US Hispanic marketplace.
FACT The cost of entry is much less than you might think.
Existing production assets can be used in the creation of your Spanish language advertisements. And the cost of media is a fraction of that required for English language television.

Myth #3 Hispanics are uncomfortable with
direct response purchasing.
FACT Hispanics are more likely than non-Hispanics to purchase via direct response television.
15% of US Hispanics Purchase Via DRTV.
11% of Non-Hispanics Purchased Via DRTV.