Does Latino Marketing Deserve a Bigger Pie?

For some time now, Latino marketers have been frustrated with the reluctance of advertisers to spend more on digital when study after study shows that Latinos out-index other groups on practically every aspect of technology adoption. The current Latino advertising spend is $5 billion, across all media – broadcast, print, and digital. Yet only 4 percent of that spend – $200 million – is going to digital.

Two months ago, Google hosted a forum to discuss its new direction in Latino marketing; it attracted more than 300 vendors, advertisers, and Latino digerati. And the response from my peers was effusive.

Which raises the questions: Can Google – the biggest technology brand in digital marketing – go where no other company has gone before? Can it persuade advertisers to take a closer look at this thing called Latino digital?

Google might have a shot at this opportunity – which is both about market leadership and thought leadership – because it enjoys a few hard-to-match market advantages: a unique place in the new digital marketing stack; a unique access to data that matters to advertisers; and a unique time in the evolution of the Latino digital marketing category where leadership in the technology arena has been lacking. But recently I’ve seen that there are a few bigger, unspoken questions on the minds of advertisers who have been slow to warm up to the market.

Should There Be a Latino Pie in the First Place?

I get this question quite often, and not only from traditional advertisers. In an age where digital has enabled marketers to attract, engage, and mobilize people around shared interests, demographic-driven marketing seems way outdated. A great piece of the Latin American population has so much in common with the general population that it seems shortsighted to “target” them discretely. In fact, if you add up all the dollars spent reaching Latinos in general marketing campaigns, the total Latino advertising spend would go way beyond the $5 billion estimate. The fact is, many marketers do both – general and discrete advertising – and that trend is very much in favor of doing both. For market indicators, look at the media (CNN, Fox News), politics (Newt Gingrich’s The Americano), and the CPG market (Kraft, General Mills), and you can see the principle in action. More and more, marketers are coming to see that producing content that is targeted and culturally relevant can be an effective way of engaging people with shared values. And, note, when we say culture, we don’t necessarily mean language. Most of these programs are in English. As a number of marketers have noted, Latino marketing today is more about values than language.

If Yes, How Big?

As much as marketers grouse about the tiny current Latino digital spend ($200 million), the total current advertising spend ($5 billion) also deserves some scrutiny. But another number that marketers love to cite is the $1.3 trillion-plus in buying power that Latinos will have by 2015 (reported by Packaged Facts). So, is $5 billion enough? According to Outsell, the total U.S. general advertising spend was $365 billion. With Latinos now representing roughly 10 percent of U.S. buying power, one might argue that the Latino spend should be closer to $36 billion. That number certainly can’t hold up – as I noted above, a good deal of the general advertising spend goes to reaching Latinos indirectly. Still, the delta between $5 billion and $36 billion is big enough that people in advertising should care. And as the U.S. Latino continues to grow as a percentage of the overall population, more advertisers will definitely care.

How Much of That Pie Should Go to Digital?

So it’s reasonable to assume that there should be a pie, and that the pie should be bigger. How big a slice should digital get? Let’s start with Google’s view. At a recent event in New York, executives for Google Hispanic suggested that the number should be closer to 12 percent – $600 million – which, as Advertising Age’s Chiqui Cartagena noted, “corresponds to the…usage of the medium by Hispanic consumers.” That’s 8 percent higher than the current figure (4 percent). But perhaps this is still too small. At the same event, Google released a report that found 78 percent of Latinos use the “Internet as their primary source of information, above TV and friends and family.”

Again, we’re looking at a delta that deserves close attention. And it’s not just that digital is becoming the preferred mode of communication among Latinos. It’s also about the future of marketing. Along with the many studies documenting the rise of Latino technology adoption, there have been a number of opinion pieces about the new role of digital in marketing campaigns, Latino and non-Latino alike. In many cases, digital is no longer just a part of the marketing mix. Increasingly, digital is the lead. And with Latinos outperforming other groups in digital adoption, they are a big part of that story. It’s one reason that so many Latino marketers are excited to see Google show up; it’s recognition for the role that Latinos are playing and will continue to play.

In the meantime, whether it’s a pragmatic spend today, or a strategic investment for tomorrow, expect digital to get a larger slice from an increasingly larger pie. Both slice and pie are going to get bigger.

This column was originally published in SES Magazine, March 2011.

Related reading

Website landing page vector graphic