Delve Behind the Data to Understand the Economic Power of US Hispanics - eMarketer

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Delve Behind the Data to Understand the Economic Power of US Hispanics

May 29, 2015


Carlos Garcia
Senior Vice President, Multicultural
GfK Media

The rapid growth in the US Hispanic population has made the demographic increasingly important to retailers. Carlos Garcia, senior vice president of multicultural at GfK Media, spoke with eMarketer’s Lisa Barron about the importance of getting the message right and understanding the culture well enough to do so.

eMarketer: Are marketers adept at distinguishing between cultural relevance and stereotyping?

Carlos Garcia: Absolutely not. I generally think the Hispanic agencies know the difference, but they’re not always given the chance to do that. Sometimes the general marketing agency is doing the work, and they feel even more compelled to stick in some ridiculous cultural icon like the Virgin of Guadalupe on a shelf behind somebody when some scene is going on. And Hispanics, especially millennial Hispanics, which are a big chunk of the total, see right through that. It just pisses them off, and it doesn’t advance the client’s cause.

eMarketer: How important are the marketer’s choice of English vs. Spanish, and how does that compare to the cultural relevance of the message?

Garcia: About 85% of all Hispanics speak at least some Spanish in the home. Eighty percent speak at least some English in the home. Knowing how bilingual the space has become, it isn’t so much about the language as it is the culture. You can’t ignore Spanish; you can’t pretend English isn’t relevant. And you have to get the culture right.

eMarketer: Data suggests that Hispanics as a whole are more receptive to advertising than the population at large. Why do you think that is?

Garcia: It’s particularly true of the less acculturated, and it’s particularly true of people who have lived here less time. But in general Hispanics do look to advertising for information. They actually want to learn something about products, because they know what they know, and they know that they don’t know a lot of things. They go to the store and tend to buy the same things.

“You can’t ignore Spanish; you can’t pretend English isn’t relevant. And you have to get the culture right.”

A lot of Hispanics are brand loyal, and a lot of that is because they stick with what they know. If they don’t know anything else, they’re not going to try it. Do you really want to risk the money or waste the money on something that might be horrible? They’d rather spend their money on something that they know they like rather than something that might be horrible.

But they look to advertising for information. So imagistic ads don’t necessarily work for Hispanics. Be specific. Why should I buy this product? It’s just as good and cheaper, it’s the same price but bigger, it’s better taste, it has more natural ingredients, it has aloe in it, it has more protein, it has something. They want a reason to buy something, and they want a reason to believe in the product. So they look to advertising for information and not images.

eMarketer: Data also shows that a disproportionate amount of Hispanics’ digital activity takes place through mobile devices. What are the challenges for marketers given that many are still figuring out how to make mobile marketing work for them, and given that a smartphone is a more personal device and ads can seem intrusive?

Garcia: That is a really interesting issue, and I think it is a challenge. It’s undeniable that Hispanics underindex on desktop and laptops, and they even underindex on [tablets]. But they overindex dramatically on smartphones because they are very social people and a very sharing culture. So smartphones are clearly going to be very important for marketing to Hispanics. Advertisers haven’t necessarily figured this all out, but they will, and they are in the process of doing it. They’re finding through trial and error what works and what doesn’t work.

Marketers have to start using social media for the Hispanic space. I’ve been to some Hispanic media conferences and marketing conferences, and there are so many social media success stories. It’s a brave new world out there. What makes it complicated of course is that every brand is different, and every situation is different. But mobile marketing is going to be very important; social media is going to be very important. It’s a whole new opportunity. There are new ways to connect and new ways to engage.

One of the things that’s driving this is the role of millennials. We’re 18% of the total population, but as you go younger into the population, the percentage of Hispanics goes up. So for millennials it’s like 20%. When you go under 5 years old, it’s like 24% or 25%. And I’ve seen a number that shows up to 50% of Hispanics are millennial.

eMarketer: The sheer size of the Hispanic population in the US makes it a market that retailers want to go after. But the average income and household wealth for Hispanics is below the average. Does that mean that the buzz about the market’s potential going forward will lead marketers to overestimate how lucrative it might be?

“But they look to advertising for information. So imagistic ads don’t necessarily work for Hispanics. Be specific. Why should I buy this product?”

Garcia: I don’t think so. Hispanics might seem to not qualify for certain types of categories, like a $5,000 television set. But guess what? They’re buying them. It has a lot to do with their cultural priorities. Family togetherness is really important. Doing things as a family, being able to sit together and watch something and sharing an experience is really important to them.

So they will make the investment; they will put a larger percentage of their disposable income on things like that that an Anglo wouldn’t do unless they had the cash sitting in their pocket. Latinos will pool their resources. They’ll scrimp and save. They’ll do it on layaway. They’ll do whatever they have to do, because they see this as an investment in their future, an investment in their family.

They organize their lives differently. They have different priorities. They are buying high-quality, high-cost electronics. They are buying houses. They are buying appliances. They are doing all these things that the sheer income numbers would suggest are impossible. But they do it.

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