The U.S. Hispanic/Latino Market: Niche or Necessity?

Last week, I touched on the closing gap in the Digital Divide between the U.S. and Mexico. Readers asked me to follow up with some insight regarding the Hispanic/Latino* market here in the U.S.

Before I start, let me put in a word about usage segmentation. Nielsen says marketers fail when they focus on demographics alone. It’s coined a term, “geopsychodemographics” (say that 10 times fast), to refer to a combination of age, income, education, attitudes, and location.

I’m not currently targeting this market for any clients, but I have in the past. The categories ranged from pharmaceutical to financial to retail to the teen market and automotive. At readers’ request, I’ve done some recent homework on the market. Here’s what I learned.

A recent study by FOCUS: Latino shows very strong interest for online media and technology among urban Hispanics. It reiterates what we all know: This segment is growing. The Web’s importance for this demographic is growing apace. The Hispanic segment is primed to purchase new products and services.

Key findings, as reported by Horowitz Associates, include:

  • 71 percent of urban Hispanic households have cable/satellite. Premium penetration among these urban Hispanic cable households is higher than among the average urban sample.

  • Potential penetration of digital cable in urban Hispanic households can reach 39 percent within six months.

  • Urban Hispanics are very interested in interactive TV features, especially in using the remote to preview upcoming shows and view actor bios, send and receive email through the TV, and use the remote to access Web sites via the TV.

  • 50 percent of adult urban Hispanic consumers are under 35, compared to 31 percent among the total urban market. This young demographic heavily influences viewing choices and consumption patterns and drives the enormous potential for new media in the urban Hispanic market.

  • 54 percent of urban Hispanic households have children under the age of 18.

The Latino market is said to have a purchasing power of over $425 billion per year. This, coupled with the data above, appears attractive at first glance. However, penetrating this market can be especially challenging. Within the past two to four years, portals, including quepasa.com, Espa&ntildeol.com, Yupi, and Latino.com, popped and dropped. Some closed their doors completely. Others drastically cut staff, and some just up and reinvented themselves to stay alive. Most U.S.-based sites aimed at Hispanics are in English, not Spanish.

“Under-penetration of advanced services plus pent-up demand for new technologies translate to huge growth potential” says Alisse Waterston, Ph.D., president of Surveys Unlimited.

Are Latinos getting what they need online? If not, there’s a very lucrative opportunity out there.

* Editor’s Note: Definitions of, and differentiations between, the terms “Hispanic” and “Latino” are a source of ongoing (and fascinating) debate. Here we use the terms interchangeably.

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