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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.

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 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.

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 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.

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 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.

 

What: Despite the fact that Hispanics have adopted e-commerce at a faster pace than the general market, marketers are struggling to effectively target the demographic on e-commerce platforms and lack effective measurement tools for conversion and attribution.
Why It Matters: Hispanics as a whole represent $1.5 trillion in annual spending power, but few companies have proactively targeted them in the e-commerce realm. As shoppers increasingly head online to make purchases, some in the industry are predicting a “Hispanic targeting renaissance.”

Today there are 55 million Hispanics with $1.5 trillion in annual spending power in the United States. They skew younger than your average demographic (80 percent are Millennials or younger), are digitally savvy and love shopping online after comparing prices and doing their research.

E-commerce in general is picking up steam across the country as people abandon physical stores in favor of the convenience of shopping online. According to a according to a report from the Grocery Manufacturers Association, in 2018, online sales of CPG products will hit $35 billion, up from $8 billion in 2013. And a Univision study found that Hispanics are a driving force in the adoption of online grocery shopping: 50 percent of Hispanic shoppers (and 60 percent of Millennial Hispanics) have bought a grocery item online in the past year, versus 40 percent of the general US market.

Now, marketers must untangle the behavior and preferences of an increasingly diverse demographic, and master the art of attribution and conversion across a purchasing journey that can involve multiple devices on and offline.

Get Ready for a Hispanic E-Commerce Renaissance

Lee Vann, the founder and director of Hispanic marketing agency Capture Group, emphasized that marketers should not be surprised that Hispanics are active on e-commerce sites, “as they tend to be more active across most Internet activities.” The surprising thing is that until now, “few companies have proactively targeted Hispanics via e-commerce, despite a clear opportunity,” Vann said.

Vann suggested that we may be on the brink of a Hispanic e-commerce renaissance, as retailers like Amazon increase their offerings for Hispanics. As the big players throw their hats in the ring, Vann suggested that we should “look to others to follow.”

Few companies have proactively targeted Hispanics via e-commerce, despite a clear opportunity.

Katie Thomas, a Regional Manager at Bush Brothers, asserted that “large retailers are doing a better job of segmenting stores based on demographics (Latino, African American, etc.),” but that “it is one thing to identify these stores but another to actually market different products in these stores to meet consumer’s needs.” According to Thomas, “the retailers that are doing this will win in the marketplace.”

E-Commerce a ‘Double-Edged Sword’ for Attribution and Conversion Models 

Some would assume that the increasing popularity of e-commerce among Hispanics means that marketers should have a wealth of data points from which to collect insight on their preferences and behavior. But Vann warned that “e-commerce can be a double edged sword when it comes to attribution and conversion models.”

Cookies, for example, are one of the most popular tools for tracking consumers’ purchasing journey. However, data has revealed that they are not always effective. According to Nielson OCR Norms, 58 percent of cookie-based measurement is overstated, targeting in cookie-based measurement is only 65 percent effective, and 12 percent of conversions are missed with cookie-based measurement.

Brands shouldn’t be timid to drive consumers to e-commerce sites with cultural relevant and/or in-language advertising.

What’s more, in a world where shoppers often start their journey online and end it offline or on a different device, it’s hard to know whether the people looking at products online are actually buying. Last-click attribution models ignore the fact that many shoppers follow a windy path involving different devices and visits to physical stores before making an online purchase. “Marketers must look across the Omnichannel path to purchase and ensure they capture the impact of the digital channel on sales that may have started online but ended offline,” Vann said.

Marketing strategist and consultant Daniel Villaroel emphasized that in this case, brands must take on the responsibility of experimenting until they get it right: “Optimization is always the responsibility of the brands to maximize sales.  It behooves them to see what works and what doesn’t work.”

He continued: “Brands shouldn’t be timid to drive consumers to e-commerce sites with cultural relevant and/or in-language advertising.” He added that instead of worrying about which language Hispanics are more comfortable speaking, brands should “test, see what works and optimize.”

Brands Struggling to Implement Measurement Tools Effectively 

It isn’t that brands are lacking measurement tools — it’s that they themselves are not confident that they are using them correctly.

Bush Brothers’ Thomas admitted that brands are still grappling with some of the most basic aspects of understanding Hispanic consumer behavior. “Bush uses measurement tools on our key brands but we have not done a good job of utilizing these when it comes to the Hispanic Shopper,” Thomas said.

While location-based data is an effective tool for getting Hispanics inside a physical store, brands need more when it comes to e-commerce since they must put extra effort into understanding what specific products Hispanics want. Thomas elaborated: “Large retailers are doing a better job of segmenting stores based on demographics (Latino, African American, etc.), but it is one thing to identify these stores and another to actually market different products to meet consumer’s needs,” said Thomas.

This turns into a complicated task when one considers that Hispanic shopping patterns vary greatly based on factors like age and assimilation level. According to a recent report from ThinkNow Research, nearly a quarter of Bicultural Hispanics say they would go to another store to purchase their favored brand, while only 18 percent of less acculturated Hispanics said the same. That seven-point difference cannot be ignored when marketers are developing Hispanic e-commerce targeting campaigns.

For some marketers, it may start with accepting what they don’t know. Think Hispanics are more loyal across the board? Think again. The same report by ThinkNow Research found that less acculturated Hispanics — those that have not fully assimilated into American culture —  are no more brand loyal than other segments. Bicultural Hispanics — those who are generally first  or second-generation Americans who identify with both the U.S. culture and their Hispanic heritage — are considered more loyal across several CPG categories.

Targeting: ‘Not Doing Anything is the Primary Issue’

tech.infocustechnologiesOne thing is certain: this is a hugely powerful demographic, and retailers and brands must find a way to capitalize on the fact that Hispanics are making e-commerce a regular feature in their shopping routines.

According to Villarroel, “not doing anything is the primary issue,” and that despite the fact that we are in the age of digital, brands are not delivering “micro-targeted content that’s meaningful,” and “sometimes content is still served up as a one size fits all.” This means that retailers must aid brands in forming an accurate picture of the people visiting their e-commerce sites.

The savviest marketers will make Hispanic e-commerce part of their long term plans and ensure that their products are presented in a culturally relevant way.

Vann added that to connect with this attractive demographic, brands will have to come ready with “Spanish language product information and meta data, culturally relevant imaging and messaging, and proactive marketing to drive sales.”

Brands looking to drive Hispanic e-commerce sales must start with forming a more complete picture of Hispanics, not just as consumers, but as people whose different experiences and cultures give shape to their decisions. “The savviest marketers will make Hispanic e-commerce part of their long term plans and ensure that their products are presented in a culturally relevant way,” Villarroel said.

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