With Hispanic purchasing power expected to reach $1.5 trillion dollars by 2015, Hispanic marketing has become a hot topic across all U.S. businesses – especially for those in the telecommunications industry. Of particular interest to marketers are tech savvy next generation Hispanics. According to Selig Center for Economic Growth, 1 in 5 teens in the U.S. is Hispanic, and by 2020 their numbers are predicted to grow 62 percent compared to just 10 percent for the overall teen population.
But though there’s a lot of industry buzz around Hispanic marketing, it’s not yet backed by much of any sustainable substance. By and large companies are seeing the need for Hispanic marketing but aren’t doing a very good job of going about it, instead many are still settling for the quick but ineffectual fix of only translating existing marketing messages into Spanish. As The Economist reported in May, 2013 one in every six Americans is Hispanic. If corporations continue to apply an outdated go-to-market approach to the Hispanic segment, they are certain to experience a competitive disadvantage for their brands. This is why corporate leaders must properly invest in building a profitable Hispanic Business Model.
Though Hispanics share a language, the community is a mosaic of different countries and customs. Successfully marketing to Hispanics means respecting this diversity and authentically communicating with customers in ways that resonate with their cultural values (download eBook to learn about these cultural values), not just relying on their common language – especially when there’s no more thought behind it than a simple translation from English.
Hispanic marketing – especially to the highly-coveted demographic of New Generation Latinos (NGLs) – has become particularly urgent for wireless and technology companies. U.S. Hispanics are early adopters and leading users of online and mobile technology and their usage continues to soar faster than the general marketplace. Driven by NGLs, 75% of U.S. Latinos currently own smartphones; in fact, bilingual Hispanic mobile users are 39% more likely to own a smartphone than the average mobile user, according to Ad Age Hispanic Fact Pack. They also have a slight edge on tablet ownership, which are popular with the younger generation as well as less tech-savvy older relatives in the household.
According to a 2012 Hispanic Mobile Consumer Trends Study by Zpryme Research & Consulting, more than half (53%) of Hispanics prefer mobile devices as their primary source for entertainment, with 4 out of 10 on their mobile phone 3 hours or more per day, and 6 out of 10 on the Internet 3 hours or more per day. Young Hispanics, those 18–25 years old, are the most likely to use and purchase new mobile devices.
As such, smartphones and tablets are becoming a major focus of the entertainment industry, and brands are customizing more apps and services that are exclusive to certain wireless carriers and that target specific audiences. According to Rich Melcombe, President & CEO of Richmel Media & Productions, “Unlike television, mobile is not a destination channel, but rather a connection platform. For Young Hispanics it is an empowerment device because it gives them the same access to information as everyone else. But marketers need to pay close attention as Hispanics are sensitive to culturally relevant content that speaks with them, not at them. Hispanics want to feel valued for their loyalty.”
Understandably, the underserved majority of Hispanics is demanding more services for their unique, diverse, and quickly evolving needs, and telecommunications providers are striving to understand and address the Hispanic American consumer as their influence and purchasing power explodes. For example, companies must differentiate Hispanic spending patterns and usage habits compared to the general population and other minority groups – and learn what makes them greater consumers of mobile content, more connected than other groups, and heavier users of social networks, so that they can leverage these opportunities.
With saturation in the general market, the industry will depend on Hispanics for future growth. As a result, we’re seeing more and more industry efforts and partnerships to reach the Hispanic community. Cricket Communications, which offers affordable and unlimited wireless services, was ahead of the game back in 2009 when they launched a Spanish-language web site and user experience for the Hispanic community. Boost Mobile partnered with Chivas de Guadalajara and became the official wireless sponsor of the soccer team’s U.S. tour games – a commitment to the Hispanic community they renewed in 2012.
This year, some major players have stepped up to the plate. In one of the more high profile announcements, Verizon Wireless teamed up with superstar Jennifer Lopez to launch a national wireless retail store designed specifically for the Hispanic market. At Viva Móvil by Jennifer Lopez, bilingual and bicultural U.S. Latinos in the market for a new cell phone, tablet or wireless plan will find a unique shopping experience customized for their needs.
For example, all stores will be staffed by bilingual employees and offer other “culturally relevant” features, such as a children’s play area because shopping tends to be a family activity in the Hispanic community. As Lopez said at the CTIA Wireless 2013 Conference in Las Vegas, as reported by NBCLatino, “This is my way of empowering the Latino community.”
Now comes word that two more companies – T-Mobile and Pandora – have partnered in a bid to up the Hispanic marketing stakes with more authentic outreach to the community.
Gustavo Peña, Senior Marketing Manager at T-Mobile U.S., provided me with some background on this partnership: “Hispanics have tended to live in multi-generational households, where the language spoken at home is usually Spanish. Through Spanish-language advertising alone, you could reach approximately 75%-80% of the Hispanic population.
“But things are changing. As of 2012, for the first time, there were more U.S.-born Hispanics than immigrant Hispanics, and the need to reach English-speaking Hispanics in a cost-effective way is increasing.”
The companies that have come to this realization are the ones leading the way in reaching out to English-speaking Hispanics through general market advertising and new social media and digital tools, and partnerships like the one between Internet radio Pandora and wireless carrier T-Mobile.
According to Mike Reid, Executive Director – Multicultural at Pandora, “By creating an emotional connection – for example, through music – brands are finding a way to authentically connect with Hispanic consumers, especially the young and highly acculturated. When Pandora Premieres featured its first Latin artist album release, “Vives en Mi” by La Maquinaria Norteña, it did phenomenally well and was the third highest preview in terms of listeners and listening hours at the time, indicating a thirst for Latin music and Hispanic artists up to now not being quenched.”
For companies like Pandora, mobile technology is the gateway to the all-important Hispanic market. Reflecting the growing numbers and influence of the Hispanic community, the T-Mobile partnership to reach this market is the largest piece of Pandora’s overall mobile strategy to date.
As Heidi Browning, Senior Vice President, Strategic Solutions, Pandora, puts it, “The most important ingredient for success is creating a connection between “bands, brands and fans” that brings them together organically. When the company learned that T-Mobile was looking to create that same kind of value exchange between users and brands, and that one of their objectives was reaching the Hispanic audience, a partnership was born.”
From T-Mobile’s side, and other companies highly engaged in Hispanic marketing, Latin music can be a gateway into the culture. In May 2013, more than 20% of Pandora listeners listened to a station seeded by a Latin genre artist, and the company had a growth rate of 142% among Hispanics over the past year. Internet radio listening is exponentially higher with Hispanics in general in the nation’s top markets, according to a Media Audit Press Release, making mobile access an important part of the interconnectedness equation to connect users to brands.
All of these companies recognize that Hispanic Marketing is heading fast in the direction of a two-way dialog between brands and consumers, one in which the latter more and more controls the conversation. Brands coming late to the game and attempting to make up for lost time by trying too hard to build relationships with Hispanics must be careful not to miss the opportunity to move away from one-sided conversations with consumers.
Hispanics want to know that brands are paying attention to them and are eager to be part of the conversation. Brands that truly listen to their consumers can more easily provide products, services and apps that fit their needs and that are personalized for them. Being able to communicate directly with consumers and respond to their wants and needs will be the real game changer giving companies a competitive edge.
We’ve come a long way from the days when the FCC had to step in because of a “No Urban/No Spanish” policy regarding advertising on broadcast stations for Latinos and other minorities. We still have a long way to go – but at least now, some companies are choosing to lead the way.
Note: The power of Latino influence is showing up in TV ratings too, with U.S. Hispanic network Univision coming in at #1 for the first time ever in the July sweeps primetime rankings of network and cable shows – in both the coveted 18-49 and 18-34 demographics.
Culture is America’s new language and currency for the last true growth opportunity!
- To learn more about how your business can unlock new opportunities in the Hispanic market visit www.CHLExecutiveSummit.com. Follow me on Twitter @GlennLlopis and check out my new eBook that will launch in the Fall titled, Awakening the Latino Factor.