With 2007 looming just on the horizon, many questions are being asked about how much Hispanic-focused online advertising is going to grow, what type of advertising is going to dominate, and what the hot ad-categories will be, among others. In anticipation of the coming year, Portada ® got in touch with three major Hispanic online media buyers to put together the following roundtable discussion about what is in store for online publishers and media-buyers alike in the coming year.
Q: How much do you expect Hispanic-focused web advertising to grow (%) in 2007?
Matias Perel (Founder/President: Latin3): We expect Hispanic-focused advertising to drastically grow and even double in 2007. Part of this growth (approximately 30%) will come from companies that already spend on web advertising whilst the largest growth is expected to come from new advertisers: US Hispanic Divisions of Fortune 500 companies that currently allocate the bulk of their advertising budgets to traditional advertising but are now becoming more and more aware of the increased online presence of Hispanics.
Marla Skiko (Media Buyer: Tapestry): I expect double digit growth. I would think at least 10-15%
What type of advertising (banner, keyword, buttons, e-mail marketing, rich media) do you see growing the most?
Nacho Hernandez (CEO/Founder: iHispanic): Search Engine Marketing. Keep in mind that the definition for Search Engine Marketing (or SEM) according to SEMPO.org is “The act of marketing a web site via search engines, whether this be improving rank in organic listings, purchasing paid listings or a combination of these and other search engine-related activities.” In other words Search Engine Optimization (SEO) plus Paid Search or also known as pay per click.
Paid search is a different measure. iHispanic Marketing Group estimates that $884 million will be spent on paid search directly or indirectly to U.S. Hispanics in 2006. And $30 million will be spent in Spanish-Only Paid Search or less than 1% of total Ad Spend to U.S. Hispanic Market in 2006. We believe that for the U.S. Hispanic market 2007, the rate of growth will be slower than the average for English only keywords and a bit more accelerated for Spanish keywords because it had a slow lift off during the last 5 years. In other words, Spanish paid search has just begun to get traction.
Q: Which model of advertising do you expect to dominate (CPM (Cost Per Impression), CPA (Cost per Action) CPC (Cost per Click))?
Matias Perel: We foresee that CPM will continue to be the prevalent advertising model for a while due to the common problem of scarce accountability. Unfortunately, the online market is still not mature enough to move on to more sophisticated models such as CPA. Because the traditional agencies do not understand interactive that well, and on the client side, they are still used to the old model. However, we are confident that as the market matures and Internet becomes more accountable, CPA models will not only grow over time but will also impact on other media.
Marla Skiko: I think we'll see more CPA success metrics as marketers demand more ROI accountability across media vehicles and particularly online.
Q: What sort of advertising will witness the most growth between Spanish-language, English-language, or bi-lingual advertising aimed at Hispanics?
Matias Perel: Traditionally, ad-campaigns targeting Hispanics were developed in Spanish-language only. Recently, however, there has been a major shift in terms of Hispanics’ preferred language. According to the latest research (by Emarketer and AOL), the majority of Hispanics online are English-dominant (52%) or bilingual (27%). Only 21% of online Hispanics choose Spanish as their preferred language. This is due to several reasons or attitudes reinforced over time. The preference of English or bilingual content over Spanish has been fueled by the emergence of youth-targeted sites such as elhood.com, voymusic.com, and sitv.com which are global communities or social networks that offer content in a mix of English and Spanish. All the above indicates that the largest growth of online advertising targeted to Hispanics will be seen in English and bilingual advertisements that deliver culturally relevant messages and cultural cues - combining culture, geography, country of origin, and acculturation level - to this target market in their language of choice.
Q: What Ad-categories (e.g. Consumer Packaged Goods, Entertainment, Automotive etc...) do you think will experience the most growth?
Matias Perel (Founder/President: Latin3): Traditional ad categories such as Consumer packaged goods have been cautious to enter this market. However, they are now realizing that the best way to learn about the consumer is by building an online marketing strategy.
Given that the largest spenders in the Hispanic marketplace are automotive manufacturers, we believe there will be significant growth in this segment. Many corporations have been busy determining their general market CRM and online strategies. As the Hispanic market comes of age and advertisers develop and feel comfortable with their Hispanic brand presence, investment levels and ROI, we will see a move to relationship marketing and retention just as in the general market. It’s truly the next CRM frontier which has its own set of nuances and intricacies.
Marla Skiko (Media Buyer: Tapestry): I see growth coming from Packaged goods, retail and auto as well as many other categories as more advertisers recognize the opportunity and the growth in penetration and content offerings.
Q: What are the main challenges in the current Hispanic online advertising marketplace?
Matias Perel (Founder/President: Latin3): One of the biggest challenges, especially for traditional advertising agencies, is to acknowledge the fact that as the Hispanic segment continues to expand their use of the Internet, it has come to adopt many of the online behavior patterns and preferences that before could only be attributed to the overall US market.
It is no news that Hispanics use the Internet as a form of empowerment. What is truly revealing is that Hispanics no longer go online just to communicate with family and friends but also for education, entertainment and to research products and services. As their online habits continue to change and resemble those of the general markets, it will become evident that in order to attract particular sub-segments within this market (i.e. Hispanic youth) advertisers will have to pay closer attention to what these groups are doing. Particularly, to attract the young Hispanic consumers, advertisers will need to start thinking about creating marketing campaigns around social network sites such as Myspace and Facebok but with a culturally relevant twist, perhaps targeting with music or other Hispanic teen “hot buttons” not covered by general market strategies.