What: 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 percent of U.S. adults in Hispanic TV households speak some level of Spanish in the home, with 27 percent speaking only Spanish and 57 percent speaking both languages. The audience measurement firm also found that ads delivered in Spanish outperform campaigns aimed at the general public in terms of ROI: 54 percent of Spanish language TV campaigns perform in line with or ahead of English language campaigns.
While it would be misleading to view the general public and Hispanic Americans 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 smart. But it’s only smart if it comes with a commitment to understanding the cultural nuances that shape Hispanic behavior.
‘Right to Win’ Key to Higher ROI
In the study, Nielsen compared the returns on investment (ROI) from a wide variety of brands’ Spanish-language campaigns to 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. To explain this, 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 looking past the sheer number of Hispanics to determine which brand in the portfolio Hispanics are connecting with, “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.” Being able to identify the brands to leverage is key to generating successful Spanish-language campaigns, Francisco said, because “maybe a product doesn’t have owned authenticity to win with a Hispanic audience.”
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Marketers: Offline Media Key in Consumer Journey
Brands must devote significant energy to understanding where and how customers prefer to shop, as people now use a wide variety of platforms when comparing products and ultimately making purchases. For that reason, cross-channel plans are “always more effective than a single medium plan,” Gloria Constanza, partner, chief contact strategist at Dex-P said.
And while Constanza asserted that “digital is more efficient in affecting the bottom of the funnel,” she 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.” A successful Hispanic marketing strategy will take these factors into account and reach people at all stages of their shopping journey.
Education, Development of New Methodologies Contribute to ROI
Marian Lozano, Associate Media Director at Zubi Advertising, said that by now, most brands they work with “understand that one size does not fit all when it comes to speaking to Hispanic consumers,” but that this is the direct result of their efforts to educate clients. 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 added that in her experience, “the Spanish-language targeted efforts have always delivered much higher and attractive ROI.” To inform strategy, 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.
But there are still many obstacles to effectively targeting Hispanics: 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 draw conclusions without taking a look at the methodologies implemented is dangerous.
The good thing is that campaigns will only perform better as more effective methodologies for breaking down consumer behavior 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 identify and prioritize the brands that are currently connecting with Hispanic consumers, “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.
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 truly connecting with “heart and emotions” will require that marketers invest in acquiring a much more “extreme expertise and inherent knowledge of this complex audience.”
Because it is not just about the data, but how the data is gathered and interpreted, and the insight it provides. In addition to reaching 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 data from reports like Nielsen’s is useful in loosely 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.