If a brand wanted to reach out to the increasingly important Latino consumer, there were always a variety of traditional tools to grab — traditional being the key term. Historically, little importance had been placed on Web-based marketing. But those days are over. Just ask Alex Lopez Negrete of Lopez Negrete Communications in Houston, a leading agency specializing in the Hispanic demographic.
“Our gospel over the last six or seven months has changed,” says the agency president and CEO. “We don’t have to preach about online and digital anymore.” Eighteen months ago, the firm’s clients — which include Bank of America, Tyson and Wal-Mart — devoted an anemic 0-5 percent of their ad budgets to online efforts. Today, every Lopez Negrete client has an online strategy, and the 5 percent spending apportionment is the new floor. Some brands now devote as much as 20 percent of their Hispanic-geared spending to Web-based projects.
Lopez Negrete’s experience is hardly unique. Whether it’s despite the recession or because of it, an increasing number of brands are waking up and smelling the cafe con leche when it comes to online marketing aimed at Latinos. While experts contend that marketers still have a ways to go in order to fully tap into the opportunities, there are clear signs that the category is showing significant growth.
TNS Media Intelligence reports that during the first 10 months of 2008, Hispanic online display advertising pulled in almost $212 million, up from about $165 million for full-year 2007. That $212 million represents slightly more than 4 percent of all Hispanic media ad spend during the same January to October 2008 period.
Why now? Hispanic online space has been gathering momentum for some time, but “it’s been topical in 2008,” says Bruce Eatroff, a partner in Halyard Capital, a private equity fund whose holdings include the Hispanic news and information company ImpreMedia. “There were some marketers who got [the Web’s] importance earlier,” he says. ” Others are just starting to appreciate that it’s a critical component.” Lee Vann, founder and CEO of the Captura Group, adds that a number of online campaigns were gearing up in 2007 but did not actually emerge until 2008.
Far more immediate forces may be at work, too — specifically, the recession. The budgetary constrictions caused by the economic climate have apparently compelled many brands to look at online marketing strategies because of their cost effectiveness. For example, the Tortilla brand Guerrero (a division of Mission Foods, Irving, Texas), was “facing a very, very tough situation,” as Lopez Negrete describes it. Because ethanol production eats up so much of the domestic crop, “the cost of corn has gone through the roof, and it also takes fuel to move it from point A to point B,” he says. So Guerrero launched a Web-based sweepstakes via online partnerships with Univision.com and AOL Latino, as well as a microsite dedicated to the contest. “We used digital for a promotion that stimulated sales at retail,” Lopez Negrete said.
There’s still another — and far more basic — reason why brands are taking a closer look at Latinos online these days: There are simply more of them online.
Overall, 48 percent of all Hispanics in the U.S. have broadband online connections. Sure, that’s nine percentage points less than the population as a whole (57 percent), according to a January 2008 survey conducted by Horowitz Associates for its “State of Broadband Urban Markets 2008” research report. But the survey’s data also show that 68 percent of Hispanics with a preference for the English language (predominantly younger ones, who are a key demo target to start with) have broadband access.
“Once Hispanics and other minorities are online, they’re leading the technology,” says Felipe Korzenny, director of the Center for Hispanic Marketing Communication. For example, data from Horowitz’s “Broadband Content and Services 2008” report, released in December, shows that 55 percent of all Latino broadband users access social or professional network sites at least once a week, versus 43 percent for the general population of broadband users 18 years or older. Hispanic broadband users also significantly over-index in several other categories, such as instant messaging; listening to radio or music online; blog and chat-room participation; and participating in virtual communities.
Increasingly, streaming media is another direct plug-in to more of the Latino population. On Yahoo! Telemundo video streams were up 67 percent in October 2008 versus the same month in 2007. Unique users were up 103 percent during the same period. “We’re finding that marketers are looking for really creative ideas and solutions, not so much across one platform or another, but ways to connect with the Hispanic consumer across multiple platforms,” says Jacqueline Hernandez, Telemundo Communications Group COO.
One example was 2008’s 7Up Recipe for Success contest, a venture between the soft drink and Telemundo. A micro site, www.Recata7UP.com, invited home cooks to submit recipes that used 7 UP as an ingredient (the pitch was that 7 UP’s lime flavors would compliment Latin dishes). “All of this was integrated through on-air and online,” Hernandez says. The winner took home $70,000.
Still, brands that shift attention to Hispanic-geared online efforts face a number of hurdles. Both Korzenny and Vann note that many brands still believe that reaching out to Latino consumers merely means translating their existing online materials into Spanish.
“It may be an appropriate strategy,” says Vann, whose San Diego-based agency reps such clients as Allstate, Pfizer and Ford. “But a lot of Latinos who go online don’t speak Spanish. Some are bilingual.” What’s more, he says, “you have a lot of Hispanic people who are novice Internet users. As a marketer, you have to be willing to hold that person’s hand a little more.”
Another problem (one that also faces brands advertising in print or broadcast media) is that creating “Latino marketing” by simply translating it — or using characters with an ethnic “look” — risks offending and alienating the very population you’re trying to reach. As Korzenny puts it: “Putting a sombrero and a moustache on somebody doesn’t make him Hispanic.”
Vann sees another potential problem up ahead. In a recent Captura Web site post, he noted that the number of Spanish-language online vehicles is limited, and recommended a series of products including content sponsorships and search-engine marketing, along with the creation of content that can be syndicated for placement on various online sites. One of Captura’s clients, the U.S. federal government, adapted the syndication strategy in order to market its official Spanish-language portal, GobiernoUSA.gov, by creating integrated, syndicated content on Univision.com.
Their growing prevalence aside, Korzenny says that right now, the tactics used to lure Hispanics are still more abundant than creative. “Some of my research shows that Hispanics are on the forefront of using social media. What that’s telling me is that marketers who use social media will do better,” he says. “They need to know how to set up a presence on a social network site, to lure people and create momentum. It requires a lot more than meets the eye.”