Hispanic Targeting: Why Spanish-Language Ads Deliver Higher ROI
What: Data is confirming that investing in Hispanic audiences pays off if it is done right: A recent Nielsen study found that ads delivered in Spanish outperform campaigns aimed at the general public in terms of ROI.
Why It Matters: Hispanics represent a huge opportunity for marketers with 57 million people adding up to $1.3 trillion in spending power. But with such large numbers comes complexity, and a struggle to form a complete picture of Hispanic consumers.
In a recent report, Nielsen shed light on the Hispanic consumer, sharing that about 83% of U.S. adults in Hispanic TV households speak some level of Spanish in the home, with 27% speaking only Spanish and 57% speaking both languages. The audience measurement firm found that ads delivered in Spanish outperform campaigns aimed at the general public in terms of ROI: 54% of Spanish language TV campaigns perform in line with or ahead of English language campaigns.
While the general public and Hispanic Americans should not be viewed through the same lens, the report was encouraging for those looking for effective ways to engage Hispanic consumers and reinforced many marketers’ argument that investing in Hispanic consumer targeting is well worth the effort.
As encouraging as this type of data is for multicultural marketers, it also reinforces that brands must stay committed to understanding the cultural nuances that shape Hispanic behavior.
‘Right to Win’ Key to Higher ROI
In the study, Nielsen looked at the return on investment (ROI) from a wide variety of brands’ Spanish-language campaigns against market averages. Looking at 50 projects with clients in many categories, the research discovered “five key levers to driving higher ROI on Spanish-language TV.” The analysts even provided data that revealed the drivers of “high ROI” versus “low ROI” campaigns.
One of the most interesting findings from the Nielsen study is that brands that Hispanics purchase more frequently generated a higher ROI across Spanish language TV. Mebrulin Francisco, Senior Partner, Director of Marketing Analytics at GroupM asserted that “where we see higher performing campaigns, it goes back to whether you have the ‘right to win.’”
Francisco explained that one of the most important elements of delivering these types of ROIs is determining which brand in the portfolio makes sense to pursue “because it’s not about population size, it’s about their pocket size,” an argument that is supported by the data collected on brands that are popular with Hispanics.
“This is critical learning to the industry,” Francisco elaborated: “We tend to say Hispanic populations are growing, and that this is why you should invest, but we see high performance because we had reason to believe that putting money there made sense.” Knowing which brands to leverage is key to generating successful Spanish-language campaigns. In the end, Francisco said, “it should be less about the population because maybe a product doesn’t have owned authenticity to win with a Hispanic audience.”
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Marketers: Offline Media Key to Consumer Journey
Another important aspect of the most successful Hispanic-targeted campaigns is the medium involved: cross-channel plans are “always more effective than a single medium plan,” Gloria Constanza, partner, chief contact strategist at Dex-P said.
All of our General Market counterparts are paying more and more attention to the Hispanic market and making that a priority since they are seeing that this is where their growth opportunity exists.
And while “digital is more efficient in affecting the bottom of the funnel,” Constanza added that offline media’s role in conversion is strong: “There are many attribution models that clearly indicate that the function of offline media at the consumer journey mapping process is very strong at driving the upper funnel, thereby being responsible for the conversion step of the funnel.”
Breaking Down Sales Essential to Painting Complete Picture of Hispanics
Marian Lozano, Associate Media Director at Zubi Advertising, asserted that by now, most brands they encounter "understand that one size does not fit all when it comes to speaking to Hispanic consumers," but asserts that this is the direct result of their efforts to educate clients on the complexity of Hispanic consumers. Lozano explained that she and her colleagues are “constantly helping clients understand the differences between the different Hispanic segments and groups.”
This has paid off. “All of our General Market counterparts are paying more and more attention to the Hispanic market and making that a priority since they are seeing that this is where their growth opportunity exists,” Lozano affirmed.
Constanza of Dex-P affirmed that in her experience, “the Spanish targeted efforts have always delivered much higher and attractive ROI.” Her team often tests the dual language approach for targeting both acculturated and unacculturated Hispanics. “Through evaluations of sales and their tracking study, we continuously see that Spanish-language over-performs the English-targeted Hispanic initiative YOY,” she said.
For many data providers, the way you can pick up the Hispanic sales is making inferences based on first and last name, where they live, and density data. Even with an incomplete picture, we are still seeing how they are responding, so imagine if we had the full picture.
But Francisco of GroupM argued that the “biggest challenge today is how sales are broken down by ethnicity,” which she described as “a tall order" because "they know they are selling but they don’t know whom they are selling to.” Francisco warned that relying on Home Scan, Nielsen and panels to give inferences without taking a look at the methodologies implemented is dangerous.
The good thing is that campaigns will only become more effective as more effective methodologies are discovered: “For many data providers, the way you can pick up the Hispanic sales is making inferences based on first and last name, where they live, and density data. Even with an incomplete picture, we are still seeing how they are responding, so imagine if we had the full picture," Francisco said.
With Hispanic Targeting, Good Things Come to Those Who Wait
For brands looking to strike gold with Hispanic consumers, patience is a virtue. To make the most of this demographic, they must understand that “you can’t expect results to come in in a year,” Francisco said.
Constanza echoed that sentiment, stating that while it is important to determine which brands have the ‘right to win’ is important, “we also cannot forget that Latinos will be the main driver of many businesses in the years to come.” When immediate results don’t come in, “they should not stop their Hispanic program – instead, they need to continue to optimize it until they find the right approach.”
Francisco added: “When it comes to multicultural, people think if it doesn’t work in a year, it doesn’t work at all, but you have to build brand equity and build a relationship with a consumer.” This is important when one considers that just reaching Hispanics is one thing, while truly engaging with them in a meaningful way is another.
Unfortunately, letting a machine spill data for you without the proper mining and interpretations can lead to a missed target.
Constanza elaborated: “In an era of advanced technology and a tsunami of available data, today it is easier to target Hispanics in the language that is more rational to them.” But to truly connect with Hispanics' “heart and emotions” will require that marketers must invest in acquiring “extreme expertise and inherent knowledge of this complex audience.”
Because it is not just about the data, but it is the interpretations of the data and the insight to which it leads you. In addition to finding Hispanics where they will be open to your messaging, Constanza emphasized the importance of “staying culturally relevant and uncovering those unique triggers that allow a brand to foster deep connections with Latinos.”
While studies like that released by Nielsen in February are useful in confirming or dispelling common assumptions about Hispanic consumers, the real trick is deciphering the meaning behind the numbers. “Unfortunately, letting a machine spill data for you without the proper mining and interpretations can lead to a missed target,” Constanza said.