Hispanic Marketing Changing to Reflect Population's Diversity

Arizona June 12, 2004 - The myth: Most Hispanics in Arizona are young, so companies should spin their marketing that way.

The fact: Sixty-nine percent are 35 and older, although still younger than the general population.

Myth: Most Hispanics speak Spanish and earn less than $24,000 a year. To reach them, advertise in Spanish.

Fact: Only 20 percent of the market describes itself as Spanish-dominant. And nearly 60 percent of Hispanics earn more than $24,000.

Arizona's Hispanic market isn't nearly as young, poor or Spanish-language dominant as long assumed, a new survey reports, and marketers say businesses trying to court them should carefully consider their products and the Hispanic niches they're targeting. Simply translating into Spanish isn't the answer.

Not all Hispanics are the same, and they don't have the same interests.

For that reason, many this year shifted the way the Hispanic market is measured. Before, high-density Hispanic census tracts were studied; now the focus is on people all over the state who identify themselves as Hispanic.

This provides for the first time a more accurate view. What's in there is the entire spectrum of Hispanic people.

That spectrum ranges from professionals to the working class. There are the new immigrants who speak only Spanish, and others who come here fully bilingual. There are fourth- and fifth-generation Hispanics who prefer English, and others who are bilingual. Some have big families, others choose not to have families.

It's what long-time Hispanic marketing experts have been pushing advertisers to consider when dividing up their marketing budgets for different products.

"They can't back away from the Spanish market, but they are finding they (Hispanics) are just as diverse as the general market," say Hispanic marketing experts in Phoenix.

Advertising in Spanish is often the first approach because that's a known, unifying factor for the majority of Hispanics. But increasingly images and culture are being mixed in.

Procter & Gamble, the market leader in Hispanic advertising, spending about $70 million in 2002, aired a groundbreaking ad aimed at Hispanics during the Grammy Awards this February. It featured a Hispanic couple in their morning routine speaking in Spanish. The ad ended with the tagline, "White teeth and fresh breath in any language."

Other companies are making similar strides. Kraft Foods is doing Spanish translations on products. JC Penney and Sears use ethnic images of shoppers in their ads. And MasterCard uses cultural ties to family and sports in its "priceless" campaign.

The firms are trying to tap into the growing Hispanic buying power, estimated at $580.5 billion last year. That is expected to hit $926.1 billion by 2007, according to the University of Georgia's Selig Center for Economic Growth.

Altogether, companies spent an estimated $3 billion on Hispanic marketing last year, according to the Association of Hispanic Advertising Agencies. That's up from $1.4 billion in 1997. But it still makes up just 3.2 percent of advertising budgets, far below the 12.5 percent U.S. Hispanic population.

But even those small efforts are getting noticed.

Ruben Ramos, a second-generation U.S.-born Hispanic professional, takes time to look at Spanish-language billboards and print ads and ethnic media images.

"It catches my eye," he said. "I tend to look at that favorably, and that may translate to me being more receptive to utilizing that company."

But Ramos, who grew up in San Antonio in a bilingual household, wants companies to go beyond that. He also looks at whether companies are hiring Hispanics into management and if they are supporting Hispanic charities. That makes him view those companies positively.

"Marketing doesn't have to be (just) in Spanish," said Ramos, former chairman of the Arizona Hispanic Chamber of Commerce and a vice president at Bank One in Phoenix. "To assume that is to not really understand the paradigm shifts in the Arizona market, if not the Southwest or other parts of the country."

Nereyda Lopez-Bowden, a consultant and former small-business advocate at the Department of Commerce, moved to the United States from Sonora, Mexico, in 1986. She was in the process of getting a law degree, teaching English as a second language, but found a high-paying job difficult to find.

She's disappointed more companies aren't more actively promoting Hispanic advertising images or even translating into Spanish more. "I seek it, but it's not coming to me." So instead she turns to Spanish-language media, and notes the companies advertising, even though she is fluent in English.

Nereyda Lopez-Bowden sees an evolution beginning as more studies show the diversity of Hispanics, particularly those showing wealth and English dominance.

"As they assimilate, they are saying 'We are not touching them with our English advertising,' " she said. And that's driving the change, she said.

But it's still a difficult sell to get companies to place more money on Hispanics.

The Association of Hispanic Advertising Agencies is trying to change that by using market research to show how spending needs to be higher in some categories than the 8 percent of budget it previously recommended. In its Right Spend II survey released this year, it suggested Hispanic budgets of 35 percent on hand-held video games and 15 percent on luxury cars.

It also pointed to insurance, travel and entertainment, and telecommunications as industries that underutilize Hispanic marketing.

"Our whole point is you have to bring a segmented marketing approach to the new Hispanic market," Nereyda Lopez-Bowden said. "You can't pigeonhole it."