The 2010 U.S. Census results are expected to validate Hispanic marketing and reflect a Hispanic population of more than 50 million. Major corporations are expected to increase the demand of research services to understand the Hispanic consumer. Or will that not be the case? There is no clear consensus among the experts serving this market. “I think the pending release of U.S. Hispanic Census population counts will generate some well-deserved attention from a multicultural standpoint, but the short-term effect on the industry as a whole will not be as impactful as many of us would like to see”, says Martin Cerda Founder and Research Director of Miami based Encuesta, Inc. According to Cerda, “the reasons for this are complex and unfortunate. Our nation and its business leaders continue to be driven by ethnocentric ideas and a short-term business orientation”.
Raul Lopez, President of Phoenix Multicultural, is more optimistic. Lopez believes that 2011 will be a boom year for Hispanic marketing and research. “Most smart companies are already aware and addressing the Hispanic market at least to some degree, but when CEOs and CMOs see those Census numbers they are going to want to pour more money into this “new” opportunity”.
Lopez adds that the fact that the Hispanic market is very segmented should not scare corporations away from the market.
“The numbers are so large now that even segmented, the market is very attractive. The less acculturated segments by itself contain roughly 20 million people. There are probably about 15-20 million bicultural, mostly younger Hispanics. Research can help corporate America target these segments and communicate with them more effectively.”
Encuesta's Cerda notes that the main challenge continues to be how to translate interest in the U.S. Hispanic population at the C-suite down to the marketing and research department levels. “Of course, there is the ever increasing competitive landscape between brands, and therefore limited time and resources available to develop effective brand strategies for niche sub-groups of the marketplace. Also relevant, our research industry is in an unprecedented state of flux and that unfortunately has made it difficult to understand consumers as a whole and give the Latino consumer the attention they deserve. “
MEASURING MEDIA'S ROI
Of crucial importance to the development of the Hispanic media and advertising sector is how ROI on media expenditures (advertising) is measured. Both agencies and corporations think that there is a lot of room of improvement for ROI measurement Gonzalo del Fa, Managing Director at MEC:Bravo in New York, tells Portada that the main challenge for the Hispanic research industry is to measure Media ROI correctly. “Because of the lack of standardization, everyone is working on his own standard solution”, says Mark Stockdale, director of Hispanic marketing at TMobile, where he oversees all of T-Mobile's U.S. Hispanic marketing efforts.
According to Stockdale, researchers need to make sure that they capture the Hispanic market. “Online panels are not the panacea. They automatically skew the sample towards the more acculturated sector of the Hispanic population”, he adds. “If you are offering a staple good product to the Hispanic market you should know right away that you often are only reaching a more assimilated acculturated sample of the Hispanic market via an online panel.
“The general market is relying more and more on online panels. In the Hispanic market you need to apply other ways to capture the market rather than just online,” Stockdale concludes.
Another significant issue are the costs of research: To obtain a correct picture of the Hispanic market in the form of a representative cross section, research companies will end up having to spend more resources than for a similar general market product. They will then have to transfer these additional costs to research buyers through higher prices. Raul Lopez of Phoenix Research notes that lot of rapid response and lower cost research options that are available in the general market still can't be done in the Hispanic market via an online methodology. “I believe we'll get there, but for many key industries that heavily target the Hispanic market, like telecom, and Consumer Packaged Goods, the sooner this happens the better”, Lopez adds. Encuesta's Cerda seems to point to a similar issue when he says that one of the big concerns that he has is when research is “done in the name of being expedient which sometimes leads to improper conclusions about the Latino consumer. This creates a cycle of “false starts” that has impacted the possible growth of the U.S. Hispanic marketing and advertising industry for many years. For example, sampling among a representative mix of unacculturated, partially acculturated, and fully acculturated Hispanics is not as easy as it seems. Using the right research provider and set of research tools can make a big difference in the strategic development and successful launch of initiatives aimed at the Latino consumer.”
Another challenge, T-Mobile's Stockdale highlights is that because of a lack of standardization every research company is working on his own standard solution which makes it difficult to compare different findings. “There are no two researchers that have the same definition of the Hispanic market”