The Growth of the Hispanic Digital Media Market
As Hispanic Digital Media is growing and gaining in complexity, Portada is increasing its coverage of this fascinating space and recently interviewed Luis Cabrera, who leads interactive advertising initiatives at Bravo, one of the main agencies in the Hispanic market.
Portada: How much growth year on year do you see in the Hispanic digital media market per category (Auto, pharma, Financial, Alcoholic Beverages etc.)
Luis Cabrera: There are several ways to look at this, one good way to forecast these numbers is first to foretell the total US Hispanic online advertising spending.
One way to figure out this magic number is by using the proportion between US Hispanic online advertising to overall US online advertising, which is usually less than 1%. If we follow that path, we can expect that US online advertising in 2007 will close at $165 million and 2008 will hit the $200 million mark. These numbers are based on eMarketer, March 2006, TNS, HispanTelligence and Ad Age's Hispanic Fact Pack.
Another way to look at this is by finding out the percentage that the US Hispanic online advertising has represented from the total US Hispanic advertising throughout the previous years and forecasting the growth trends for the upcoming years. By extrapolating past growth rates conservatively, we can expect that 2007 will close at $150 million and in 2008 we will see something like $180 million in investing.
And finally, a more optimistic, and still conservative, way to look at this is by determining that investment will keep a steady growth pace of 30 something percent. This throws near $175 millions in 2007 and near $230 million in 2008.
Portada: How does Hispanic advertising investment line up with general market ad investment?
Luis Cabrera: The Hispanic market is undeniably disproportionately represented in comparison with the general market. We are facing the same disproportions as in traditional offline US Hispanic advertising. While US Hispanics represent nearly 10% of all US Internet users, ad spending is not even 1% of the total online US advertising. And even within US Hispanic Marketing: Why does a medium that can reach 56% of all Latinos in a permanent and interactive way receives only 3% of the total US Hispanic spending? This number should be at least double to be at par with the non-Hispanic market. Furthermore, most of my colleagues, inside and outside of the Hispanic market, agree this number should be at least a good 10% of the total. I think that's the difference between supporting and integrating.
The good news though, is that US Hispanic online advertising has been growing year after year at a faster rate than non-Hispanic online advertising, so I'm optimistic we'll get there, lento pero seguro!
Portada: Which Hispanic Online Advertising Categories do you see growing the most?
Luis Cabrera: Regarding the growth on each of the categories, my feeling is that the strongest categories will remain the same: Retailers, Automotives, Telcos, Pharma and Financial Services.
The categories showed a lot of movements in 2007, some clients changed agencies, some others got their first Hispanic agency and some others just integrated better their online experiences with their offline advertising. All these will definitely impact the landscape in 2008:
Auto: Automotive has always been a strong and very competitive category. As manufacturers continue developing their Spanish language sites and specific "latino mini-sites," we will see more and more advertising coming in this direction. There are a few that haven't jumped yet into the wagon, so I would expect to see the whole family together in 2008.
Retail: Big retailers like Wal-Mart and Target have the power to make this market even more interesting. We've seen some "warm-up exercises" this year and I guess they will start jogging during this 2007 holiday season and start running in 2008. Best Buy just released its fully functional Spanish website, so it won't be a surprise to see a lot of activity in their category. Other retailers like Walgreen's, Duane Reade and CVS will surely catch up and start playing seriously next year. Another interesting category to watch is the fast food industry. We saw probably the most interesting activity from McDonalds, and there was some activity from Burger King and KFC. Let see what next year looks like in this category.
Consumer Products and Food and Beverages: This is probably the category that is embracing video the most. On one hand we have partnerships like Unilever with Univision to create online novelas, and Procter & Gamble with Yahoo-Telemundo to have exclusive sponsorships in their Digital Video channels. On the other hand, we have other big players like Unilever and Wrigley's using video to enrich their online experiences. So it wouldn't be a surprise to see some of the other players like Kraft, Heineken, Budweiser, Miller, etc. to revamp their offering with video as well.
Financial Services: This is another hot category. We've seen a lot of advertising from insurance companies like Allstate and StateFarm and we are waiting response from the rest of the players. Banks and Credit Cards issuers like Wamu, Wells Fargo and Bank of America were also very active, but I think this is just the tip of the iceberg in this category as most of the banks started defining more clearly their Hispanic offering and strategy in 2007.
Pharma: Many pharmaceuticals have found in the online space a perfect place to offer resources and information to Hispanics. Many product pages have been created, and tons of content have been generated, and they have been promoting them online aggressively. AstraZeneca, Glaxo SmithKline and Novartis head the list. We are anxious to see what others like Wyeth and Johnson&Johnson have to offer in 2008.
Telcos: With US Hispanics over indexing in the usage of cell phones, it's no surprise that players like Verizon were very active this year. While other players, like AT&T (Cingular), showed some activity, we expect to see a dramatic growth in this category. And finally we have satellite and cable operators and their bundles, where I cannot see a clear winner in the US Hispanic online market: Time Warner? Dish? Direct TV? Verizon?
Portada: What do you think is the best approach to target Hispanics online?
In order to understand and predict what's next in terms of US Hispanic online advertising, we need to first understand and analyze what the clients are doing to have an online dialogue with this consumer. The norm is that before a company starts advertising online to US Hispanics, they make sure they have a relevant offering by either:
a. Fully or partially translating their websites
b. Creating a mini-site to promote a specific product of their portfolio in a relevant way.
c. Partnering with a publisher and creating sweepstakes, homepage takeovers and/or splash pages in their portals.
The right approach? All of the above, implemented concurrently.
Portada: Could you please elaborate on this?
Luis Cabrera: The most successful advertisers have fully translated their corporate or transactional websites providing users language options and ensuring that they offer the same user experience in both languages. There are number of cases in which Bilingual Latinos and even the Spanish dominants Latinos rather navigate the English website, to "make sure they are getting the same deal" and/or because they feel that the English website is more updated. There is nothing more frustrating than clicking the "Español" button and see an entire different website (Is this complete? Why is this different?).
Portada: Can you provide an example?
Luis Cabrera: This could be the case for auto manufacturers; their "main" websites should be equally operational in both languages. Let's remember that when it comes to high ticketed products, the decision is taken by more than one person in the household. You should be telling the same story to Mom, Dad who might be Spanish Dominant and the kiddo, which could be English dominant. So lesson 1: Provide language options, not user experience options.
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