Spanish Lessons


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 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.

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