Dear Brands: Ignore the Hispanic Market at Your Peril.
For any brand looking to futureproof itself, a critical market opportunity.
PHOTO CREDIT: Getty Images
Despite the fact that Hispanics currently make up over one-sixth of the population of the United States and hold considerable purchasing power - over $1.5 trillion per year - the entire Hispanic market remains underserved by most brands. As important as it is to market to this cohort, it's going to become increasingly more important for brands looking to survive and thrive. Consider the following: More than 40% of US Hispanics are Millennial, and Hispanics account for more than 25% of the population ages and & under. By some accounts, 51% of the U.S. population growth between 2015 and 2020 will come from Hispanics.
The top 50 Hispanic advertising spenders, spent $3.8 billion on Hispanic media in 2015, so it's clear that some brands understand that this market has potential; nevertheless, it remains an underserved demographic. That's not to say that companies don't advertise in Spanish, or that there aren't agencies dedicated towards creating ads for the Hispanic vertical; that said, there is still considerable fragmentation of the media market. This fragmentation is largely because Hispanics in the United States consume content in both English and Spanish, which makes it hard for brands to know how to tailor their content for their audience.
Reaching the Hispanic Market
According to Parker Morse of H Code Media, a firm formed with the aim of connecting advertisers with Hispanics in the U.S., while Hispanics tend to consume more content in English than in Spanish, the easiest way to reach them is through Spanish-language media. A Google report on how to reach Hispanics online notes that "marketers can reach U.S. Hispanics online during the entire web experience" through "leveraging both English and Spanish terms" and "developing ad campaigns in English and Spanish." This in itself poses problems for agencies, as it requires not only a facility with the language but an understanding of various Spanish media outlets and how to navigate them.
The other issue Morse points out is the difficulty in knowing whether someone is Hispanic. Most brands that target Hispanics have had to rely on poor quality third-party data, based on last names, census data, and other inexact methods of identification. Morse calls this process "very inefficient", and thinks that a second-party perspective -- creating audience segments using second-party data -- is required in order to provide much-needed scale to the industry. This is an issue that is not necessarily unique to the Hispanic vertical -- companies have had problems with inaccurate third-party data for years -- but it does make it difficult to reach an audience that is traditionally defined by its demographics.
Ultimately, the best way to reach the Hispanic audience (or any audience, really) is to create content that is meaningful and relevant. As the Google study notes, "cultural relevance drives engagement and influence." And herein lies the third problem that marketers face when targeting Hispanic audiences: being able to properly scale those advertisements so that they reach people where they are, and don't end up next to inappropriate content.
Vetting Sites on an Individual Basis
"The Hispanic vertical, more than any other, needs a trusted a partner that can vet sites one by one," says Morse, "so they can assure the quality and nature of the content brands are running ads against." This is especially important given the amount of effort that goes into identifying members of this audience, and the issues involved with reaching them digitally.
Morse's logic makes sense, when you think about it. After all, the Spanish language market is very underserved in the U.S. in relation to how many people speak the language. To find the scale that you might be able to find in the English language market across five major web properties, you might need to work across hundreds of sites in the Spanish language market. To work across so many sites, most brands will want a trusted partner to vet the brand safety of each site. Contextually & behaviorally match up the advertiser to the right user, Morse explains, is key - as is providing unique custom executions to drive ad performance.
Another reason why automating site selection isn't yet an option is somewhat obvious. Like any other audience, Hispanic groups tend to be the most engaged when they are consuming content they are passionate about, and "passion is very hard for an algorithm or some type of automated process to detect," explains Morse. Thankfully for us humans, crafting partnerships on specific properties by hand - in a "brand safe" context - is still something we do better than machines.
The trend amongst advertisers lately has been to try and personalize the customer journey, tailoring it to the individual's needs. But this only works as long as you have the right information. The good news: brands that arm themselves with the right information - and strategies - to connect with the Hispanic market have a good chance to gain major market share over their competitors over the next decade.