12 predictions by Portada’s editorial team
1. Census Results will vindicate Marketing to Hispanics
The 2010 Census Results will be completely digested by September 2011. A major part of our Fifth Annual Hispanic Digital and Print Media Conference on September 22, 2011 will be devoted to analyze the implications of the census results. We expect the results to make the case for marketing to Hispanics even stronger. For an in depth analysis of what we expect to happen and how much the resuls will impact Hispanic marketing budgets , read our recently published Special Census Preview Supplement.
2. Emerging Hispanic Markets will be increasingly important
Smaller Markets, which traditionally have not been under the radar screen of many advertisers will increase in importance as their Hispanic population (and purchasing) power skyrockets. The Census results will highlight growth in states such as Arizona, Colorado, Georgia, Washington and Utah. Portada’s Emerging Hispanic Markets Forum, on September 21 2011, will be bringing together major NYC based agencies and marketing executives with media executives and agency executives of markets with a skyrocketing Hispanic population.
3. Spanish will continue to be the predominant Language spoken among Hispanics
The majority of the growth of the Hispanic population will come from U.S. born Hispanics. However, the use of the Spanish-language will increase, mostly because second and third generation Hispanics are increasingly interested in their roots and in learning the language of their ancestors.
4. The “O”(wned) and “E”(arned) in the “POEM” matrix will increase
The Paid, Owned and Earned Media (POEM) matrix provides different ways for marketers to connect with consumers. In 2011 marketers will put even more emphasis on “owned” and “earned” media through content marketing (see the Texas Department of Transportation Mini Telenovelas effort) and social networking initiatives (see for example General Mills’ Que Rica Vida site).
5. Media Properties will ride the Brand Integration Trend and Expand into the Agency Business
Media companies will ride the wave towards increased owned and earned media by profiting from brand integration efforts like GM, T-Mobile and Domino’s Pizza. in Univision’s “Eva Luna” telenovela. In addition, media properties will increasingly act as agencies by advising clients on how to work on their owned and earned media projects. Larger media properties will also buy media for clients in other media properties. See for instance the way Hearst brands itself as “Hearst Media Solutions” or Meredith’s integrated marketing unit which provides corporations and brands with custom marketing solutions.
6. Newspaper Companies will stay (and boom again)
Despite all the the doom saying, often coming from the newspapers own ranks, the decline in print advertising will bottom out in 2011. Successful newspaper publishers will have repositioned themselves as mayor content players and masters of the local advertising business. There will be less and stronger newspapers. Print will be a viable medium in its own right.
7. Online Advertising will increasingly be a (Commodity) Trading Business
The share of online advertising in the overall advertising pie will continue to increase, particularly in the Hispanic market. Latin Online Adnetworks will continue to thrive. However, the business will be more and more a commodity business where buyers, mostly agencies will buy a certain amount of impressions/clicks through ads targeted to a very specific audience. Agency and online traders will increasingly be data crunchers and mathematicians.
8. Broadcast Media Reigns
Hispanic Broadcast Media will continue to be the main ad vehicle in the market (e.g. see Kohl’s recent TV and Radio Campaign). The sheer audience numbers the major broadcast networks reach can not easily be matched by other media types. There will also be more competition in the Hispanic TV market with the entrance of new players and the strengthening of companies such as V-Me, which recently became a Nielsen rated network. Web TV, although not a major factor yet will also increase the competition.
9. General Market Agency Shops will get more Hispanic Business
The Total Market Approach will continue to gain ground. Proponents of the Total Market approach argue that in order to effectively evaluate ROI and optimize spend, sales allocation and media consumption patterns for Hispanics should be assessed versus the general market. General market agencies will obtain more accounts targeting the Hispanic market and incorporate them into their general (total) market assignments This is what happened in 2010 with the Home Depot account, which went from Vidal to the Richards Group (Richards Lerma). In addition, general market agencies can also profit from media buying efficiencies by consolidating Hispanic buying into “total” market buying.
10. Social Networks as Ad Vehicles? The Jury still will be out
Despite Facebook expected 2010 revenues of more than $500 million it is not clear yet whether advertising placed in online ad networks works well. As our contributor Marcelo Salup says in a recent column (It’s Social but is it Media yet?): “In two different polls I conducted, barely 15% of all respondents reported clicking on any ad in a social network. The very size of the respondent base (less than 100 people) is, by itself a sign of the consumer interaction. Anecdotically, most of my friends and acquaintances also report low interaction with straight advertising in social sites. Historically, CTR’s (click through rates) have been sliding so that today we probably do not see even a 1% CTR across the board.” Regarding the brand interaction capability of social networks, Salup adds. “I don’t think any advertiser has really cracked the code yet. For every dyed-in-the-wool fan there seems to be 2 inane boring ones and another one that just wants to tell the company “you suck”. Evidently, some companies are doing well: Coca Cola, Nike, Ferrari… but go deeper into the walls and you’ll see that easily 25%-30% of the comments are really negative.”
11. Mobile Advertising Becomes a Factor
The expansion of smartphones is buyoing mobile advertising. This has an important implication for the Hispanic market as the Hispanic smartphone growth rate is outpacing that of the general market.
Mobile Advertising will surpass the $2 billion mark in 2011. Google will widen its lead even more making almost two thirds of the markets revenues , with the next-closest competitor, Apple, coming in below of 10% of total revenue (our projection based on IDC 2010 figures). While Apps are an advertising vehicle, also in the Hispanic market, it won’t be where the majority of money will be coming from in mobile advertising. We also expect the mobile coupon business to increase significantly.
12. Local online Advertising will Boom
Local Advertising will increase in importance, buyoed by Interactive Media. Borrell Associates predicts that Local Online Advertising will increase by 18% from $13.6 billion in 2010. New technologies such as the evolution of local search, mobile advertising and group buying (e.g. Groupon) will increase the effectiveness of local advertising. Traditional media players (newspaper, yellow page publishers, TV – see Univisions effort earlier this year) will fight for a bigger slice of the growing market against new players such as social buying plaforms and social networks.