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What would you do with $1.3 trillion?
It’s actually not a rhetorical question. That’s the current buying power of the U.S. Hispanic population. What’s more, this audience is being underserved by the very brands who could benefit from bringing them in.
While Latino spend centers around the usual suspects of housing, transportation, food, shopping and phone service, a growth rate at 3x the size of the American average demands attention.
What is even harder to ignore? How about a projected meteoric spending power growth of 150% by 2025? This is what they like to call a “whale” in the poker world. As a result, wise brands are looking to unlock meaningful connections to the U.S. Hispanic audience. So, by now we would think brands are racking their budgets to go after this audience, right?
Not exactly. While Hispanics make up about 19% of the U.S. population, they get 6% of advertising budgets. This reveals a pretty big contradiction at play. Why do we spend so little to go after an audience that can provide so much?
The answer lies in a few supposed contradictions within the Hispanic audience. So, let’s address some elephants in the room by doing some new age myth-busting:
Myth #1: Hispanics do not have disposable income to buy high-end products.
Truth: This is a big misconception that leads high-end brands to deprioritize a big spending group. However, we can let the numbers speak for themselves. In 2019, the total economic output of Hispanic Americans was $2.8 Trillion, which would equate to the 7th largest GDP if they were their own country. That would be a 40% increase versus their 2010 GDP of $1.7 Trillion.
With an increase in HHI of 27% and 1 out of every 5 Hispanics being considered affluent, they need to be on the map for all products.
Myth #2: Hispanic marketing only impacts Hispanic audiences.
Truth: To answer this, we need to understand the growth of the bi-cultural and ambi-cultural Hispanics. These are people that hold true to their culture and traditions while heavily adopting others. Creators like Lejuan James, Jenny Lorenzo or Lele Pons bring Hispanic content to all audiences.
Think of the amount of YouTube videos there are on teaching about Hispanic cuisine, art, life-hacks, etc. Many of these are made by bilingual and bicultural influencers. Thus, when you are marketing to Hispanics, a social media power user group, expect a heavy dose of sharing with their non-Latino extensions—and invest accordingly.
Myth #3: Total market marketing is all you need to reach Hispanic audiences.
Truth: This is a huge one. We get it. The efficiency is there when you account for the growing numbers of acculturated and bicultural Hispanics. However, we certainly know that Hispanics are not all the same consumers. When a word can be translated differently based on what Latin American country they are from, your marketing needs to differentiate as well.
This is where diving into their culture, connecting with the audience and doing so with authenticity wins trust. We can use qualitative and quantitative data to develop Hispanic audience insights that help us define how our message can resonate with the audience. That’s where authenticity is built. That authenticity that earns trust that creates the strong connection multicultural audiences crave. That thinking most certainly needs to be prioritized on an audience that is largely underrepresented.
Myth #4: Most Hispanic Americans are immigrants which is why we need to specifically use Spanish-language ads.
Truth: Another age-old chicken-before-the-egg battle presents itself. We know that Hispanics crave authenticity in their culture. It is how we establish deep brand connections with that audience. We also know they adopt the English culture and thus can respond to English content. So, what do we do?
First, we need to rid ourselves of the notion that there is a universal answer to this. It has to be case-by-case. Hispanic adults ages 18-54 are 500 percent more likely to consume more English content than Spanish content. BUT, more than half of them feel a stronger connection when their heritage is represented in marketing.
Therefore, it is about striking a balance of English copy with the incorporation of Hispanic-themed content. But to truly reach people on an emotional level, we dive into the insights of our specific audience and what their needs are. That way, we are communicating with consumers in the language they use the most, while being culturally relevant, and ensuring we tailor our message to their product or service needs. Activations like Target’s #SinTraduccion campaign, the Netflix “Learn Spanish with Narcos” campaign, or McDonald’s conversion of I’m Loving It to Me Encanta pave the way for creative cultural connections with the Hispanic consumer.
Myth #5: If competitors are not marketing to Hispanics, you don’t need to.
Truth: Now, I would imagine that the $1.3 trillion in buying power would answer this one. However, I still sense some readers doubting. In that case, let’s look at this from a business lens. All brands, products, services or marketers need to grow to thrive vs just survive. To achieve that, we constantly look for new markets, new category trends, and, certainly, new audiences.
You would explore every option to identify big spenders for your brands, and if Hispanics are in that category, then the answer is provided to you. Using the specialized approach I’ve outlined above, evaluate the best way to measure the impact and capitalize on an audience your competitors are missing out on!
So, now that you have the keys to the luxury car, why not drive it right? Start by taking away one main point from our Latino myth-busting journey: Strategically, every brand should begin their consumer journey building by digging into the Hispanic audience. These audiences won't intersect every brand, but you will be surprised by what you find. The more you understand, the more the road map will reveal itself, and your brand can get a piece of a $1.3 trillion pie that’s only set to grow.