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Latinos And Lucre; The Race Is On To Win America's Hispanic Consumers
By Malcolm Beith
22 November 2004
Four Latinos--a Dominican, a Mexican, a Cuban and an Argentine--walk up to the bar. Each asks for the best beer in the house in his own colloquial Spanish, and the bartender--the maestro de idiomas, or master of languages--serves up Heinekens. No, this isn't the beginning of a bad joke; it's one of the hottest Hispanic ads of the year, lauded as a masterpiece in marketing circles for its ability to appeal directly to distinct Latino subgroups in the United States. "It celebrates the differences," says Tony Ruiz of the New York-based Vidal Partnership, the ad agency that produced the spot. "It gives consumers a chance to see themselves, and connect on a higher level."
Prior to the 2000 U.S. Census, Hispanic marketing was little more than an afterthought to most of corporate America. "When companies considered Latinos, they thought, 'Sombreros and no money'," says Isabel Valdes, a California-based Hispanic marketing expert. But over the past four years, corporate America has come to realize both the diversity and power of Hispanic consumers--and the need to connect with them in more sophisticated ways. The stereotypical Latino may still be the poor Mexican immigrant. But in reality, Latino consumers now range from Argentine investment bankers in New York to Nicaraguan salesmen in Alabama; from English-speaking, teenage Cuban mall rats in Florida to Mexican NASCAR dads in Kansas. "The sheer growth of the market is an undeniable, in-your-face message," says Rochelle Newman-Carrasco, head of a Los Angeles Hispanic advertising agency called Enlace Communications.
The numbers speak for themselves: America's 39 million Latinos spent nearly $700 billion last year and are the fastest-growing consumer group in the country. By 2008, Hispanic consumer spending is expected to top $1 trillion, according to the University of Georgia's Selig Center for Economic Growth. Faced with these astounding figures, the U.S. business community has made unprecedented overtures toward Latinos since 2000, changing the way the mainstream United States sees its largest minority--and itself--in the process. "The sleeping giant ain't sleeping no more," says Valdes.
For more than two decades, Hispanic marketing consisted mainly of U.S. ad agencies translating their mass-market, English-language ads and TV spots into Spanish. But U.S. businesses now realize they need creative strategies aimed at specific Latino subgroups. To do this, they've turned to Hispanic ad agencies that employ what Valdes calls "in-culture" marketing techniques. That means using key values and cultural traits--family, music and food, for instance--to connect with Puerto Ricans who live along America's East Coast, or Mexicans in the American Southwest. The broad-brush approach hasn't entirely disappeared; the use of Latino celebrities to tout products has become commonplace. In the past year, both Kmart and Hershey's have successfully teamed up with Mexican singer Thalia to peddle clothes and chocolate.
Ironically, language isn't such a key issue any more. In a 2002 Pew Hispanic Center poll of third-generation U.S. Latinos, 78 percent of the respondents said English was their primary language. "It doesn't matter whether you deliver the message in English or Spanish," says Ruiz. "You could even do it in French or Chinese, as long as it appeals to the heart and mind of the Hispanic consumer."
Hispanics--who originate from 19 Spanish-speaking countries, plus Puerto Rico--naturally share common linguistic and cultural traits. But marketers nowadays favor highly targeted campaigns. Chivas Regal, the spirits company, uses salsa music in Florida promotional shows to appeal to Cuban-Americans but switches to merengue to target Dominicans in New York. Instead of relying on the neutral "universal" or "Walter Cronkite" Spanish commonly found on Spanish-language television and most nationwide Hispanic ads, companies like Sprint PCS, Toyota and Heineken, among others, now often use regional accents and slang, depending on where their target audience both lives and comes from. "It makes it come home to the consumer, who thinks, 'These people are like me'," says Manuel E. Machado, president of the Association of Hispanic Advertising Agencies. Take Heineken's "Blackout" ad that aired in the northeastern United States in August 2003. In it, two Dominicans--speaking in distinct regional accents--stumble through their New York apartment during the blackout while trying to decide what to make room for in their cooler--milk or Heineken? The cerveza , of course. "It was a great spot," says Machado. "They reached their regional market. In the eyes of many experts, Heineken's "Maestro de Idiomas" ad was even better, appealing to four separate sub-groups with one spot.
Such innovation will only become more commonplace as research exploring Hispanic consumer trends grows in sophistication. One eye-opener is this: Hispanics now spend more time online per week than any other American group. Hispanic e-spending, which hit $8.1 billion last year, has prompted companies like AOL and Microsoft to invest more heavily in their Hispanic marketing initiatives. Automakers are likewise fine-tuning their Spanish-language sales and customer-service sites. Steady increases in viewership of Spanish-language television networks like Univision have helped boost Hispanic TV advertising, while sales of leading Spanish-language magazines People en Espanol and Latina fueled a 24 percent rise in Hispanic print-media ad revenue in 2003. "We can no longer be ignored as just part of the melting pot," says Machado. "From Congress to migrant workers, we are an important part of the American infrastructure. We are everyday people." Corporate America obviously agrees.