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Multicultural Expression is Becoming General Market

July 28, 2015

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By Lisa Urias, President & CEO of Urias Communications

 

Recently, I attended a national conference in Miami of the Association of Hispanic Advertising Agencies (AHAA), where more than 50 high level marketing executives and CEOs from top multinational corporations attended including Comcast Heineken, Kraft, Pandora and Target. What was their message? They are now leading their marketing efforts with Hispanic indicators.

Rick Gomez, senior vice president of marketing at Target, stated that the company had faced significant growth challenges marketing to mainstream populations in North America in the past 5 years, and as a result Target closed all of Canada, consolidated thousands of stores across the U.S., and lost millions in revenue. Why? He stated: “Because we have been focused on the same market for far too long. Today, we are leading with Hispanic indicators. Why wouldn’t we?”

We all know the spending power: in 2014, Hispanics spent $1.5 trillion in the U.S. and $47 billion alone in Arizona, and their upward mobility is accelerating. Higher percentages of Hispanics are entering college than the non-Hispanic white population (69% versus 67% in 2013). So what exactly does “leading with Hispanic indicators” mean in today’s marketplace?

First, the median age of the non-Hispanic white population in the U.S. is 47, while the median age of Hispanics in the U.S. is just 26. By the standard of any demographer, these are prime formation years. Hispanics are moving into their careers, creating families, buying their first homes, purchasing upgraded automobiles and buying health, home and auto insurance at an accelerated pace.   They have yet to establish brand loyalties and are open to fresh and innovative brand messaging and are candidates for long-term brand loyalty.

By contrast with a median age of 47 the non-Hispanic white population long ago established ties to certain brands, leaving companies that market to this segment with a strategy that predominately relies on switching or “poaching” from another brand. In other words, that strategy leaves companies all chasing the same shrinking customer base.

In addition, despite the age-old myth that Hispanics, once moving into family formation, shed their cultural roots and meld into the mainstream mass is entirely unfounded. Hispanics, as with other multicultural populations, while proudly American, retain their cultural roots more than ever. In fact bilingualism has grown significantly over the past 20 years; to the millennial generation, multicultural embrace and bilingualism is cool. And as the rate of marriage and family formation between Hispanics and non-Hispanics accelerates, the phenomenon of bilingualism and multi-cultural embrace strengthens in our society.

Do not underestimate the long-term changes in trends and values brought to mainstream culture by our youth as they mature into the family formation stages. Many major brands like Coke now test with Hispanic bilingual, bicultural groups to determine the success of failure of current campaigns targeting the millennial generation overall. Campaigns like Target’s #SinTraducción or Taco Bell’s “Live Más” demonstrate a commitment to using focused marketing strategies to reaching multicultural and mainstream markets.

Visit any live music nightclub or hotspot frequented by millennials and you will find an entire spectrum of ethnicity and cultural expression. I recently visited such a spot in a basement of a downtown Phoenix building only to find a group of socioeconomically diverse millennials that were both Hispanic and non-Hispanic, dancing to the music of a live Cumbia band singing only in Spanish. Cultural change among our youth is happening quite rapidly and it will profoundly affect the values of mainstream culture over time.

Yet many corporations, cultural institutions and political campaigns still lag when it comes to strategically engaging with Hispanics through their marketing efforts. While companies like Coke, McDonalds, Kraft, Heineken to name a few, now lead with Hispanic indicators, too many companies continue to engage in marketing strategies to the same non-Hispanic monoculture they have been targeting for the last 30 years, and expecting that the new recently hired ad agency will find creative ways to speak to the same old audience in a new way to increase sales. This ROI is diminishing and will continue to diminish.

A prospective client recently asked me: “What are my greatest risks with the Hispanic market?” My answer: “Do nothing.” Ignoring the fastest growing market instead of embracing it, and missing the cultural shift among the millennials embracing multiculturalism and bilingualism, can negatively impact your bottom line for years to come. Continuing to focus on the same old markets and expect YOY improved results is actually becoming more of a risk than actively engaging with this rapidly changing marketplace.

So the question is not: Why invest in Hispanic markets? Just ask Mr. Gomez from Target. The real question is: “Why not?”

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