The U.S. Hispanic Digital Market: Why Brands and Marketers Should Follow the ‘Smart Money’
Earlier this year, smart money investors WPP, Verizon, and AwesomenessTV (owned by DreamWorks Animation, Verizon and Hearst Corp.) joined venture-capital firm Upfront Ventures (the largest investor in Maker Studios, now owned by Disney) in a $27 million dollar bet on digital media upstart targeting Latino youth, Mitú. This brings the total raise to date to $43 million for the four-year-old media brand that delivers some 2 billion monthly video views across multiple platforms; the largest global digital reach of any company targeting Hispanic youth.
Beyond Mitú’s impressive numbers, or what some might say is just the latest in YouTube MCN land grabs, smart money investors clearly recognize the opportunity for growth that this vastly underserved and largely untapped consumer market can deliver. Still, most brands and marketers don’t have a clear strategy for reaching this audience; they may have taken notice, but have yet to take action and may not fully understand that digital is the big opportunity.
Hispanic consumers (one of three rising groups of “super” consumers) are not only the fastest-growing demo in the U.S., they’re also digital trendsetters, leading the explosive growth in device ownership and online usage. To better understand the opportunity and what works (and what doesn’t) let’s look at just a few of the highlights.
The Market
It’s big. $1.5 Trillion (with a big “T”) big. From one trillion dollars in buying power in 2010 to $1.5 trillion in 2015 (a 50% increase in just five years). If it were a country, it would be the 11th largest economy in the world; that’s tough to ignore.
It’s growing. Fast. Hispanic are not only the largest minority group in the U.S. (55.4 million in 2014), but also the fastest growing; a projected 163% increase in population between 2010 and 2050, making up 30% of the total population by July 1, 2050. As EthniFacts so boldly stated in its white paper analyzing the census data, “The Hispanic Century Is Here.”.
It’s young. About one-third (17.9 million) of the U.S. Hispanic population is younger than 18, and about a quarter (14.6 million) are Millennials (ages 18 to 33 in 2014), according to Pew Research Center.
Why Digital Matters
Leaders in the adoption of new devices. Nearly three of four (72%) Hispanics reported owning smartphones as of late 2013 (close to 10% higher than the average) and about half (49%) planned to upgrade or replace their mobile device in the next six months (compared with only 30% of non-Hispanics) and are twice as likely to upgrade their tablets (15%) in this same time, as reported by Nielsen.
Most time spent online and in apps. Every month, according to Nielsen, Hispanics browse or use apps on their smartphones 13% more than other Americans and, a recent Google Consumer Survey found, are 1.5x more likely to buy mobile apps and digital media than non-Hispanics.
Most digital video consumed. The average Hispanic spends more than eight hours each month watching video online — which is over 90 minutes longer than the U.S. average, according to a Nielsen report. A staggering 10 million Hispanics watch an average of 6 hours of digital video each month on smartphones — 39% more than the rest of the U.S.
Most time shopping online. Specific Media and SMG Multicultural found that not only did Hispanics spend 83% more time online vs. non-Hispanics, but they also spend nearly four times longer shopping on the web or in apps and over-index in a number of key digital behaviors.
Most receptive to brands on social. The 2015 Ad Age Hispanic Fact Pack found that 25% of Hispanics agree that social media is an great way to share products they like with people vs. 22.5% of non-Hispanics. Also, 22.6% of Hispanics vs. 21.9% of non-Hispanics agree that they like to follow their favorite brands.
Most social and most “likely to share”. As Univision explained: “Culturally, Hispanics are particularly well connected in their personal lives with broad, influential networks of friends and family, and the same connectivity rings true in the digital world. They share 5x more often than non-Hispanics via social media, and the content they share is 35% more likely to be clicked on by others. With 79% of online Hispanics reporting they have a presence on social media sites, their scale combined with their engagement is unparalleled.”
Most underserved and untapped. According to Nielsen’s Latina Power Shift Report, 62% of Hispanic women would like to see more content created “Latinas like me” and more than half (56%) wish there was more digital content in Spanish. Relative to the general market, there is significantly less digital content being created for U.S. Hispanics. These are the opportunities that should have every marketer sitting up and taking notice.
How To Win
Be where they live — video, social and mobile. Smartphones have quickly becoming the “first screen” for this group and digital video watching on mobile reigns supreme. Hispanics are more likely to visit sites like YouTube versus non-Hispanics (81% vs. 69%) in search of authentic, immersive and culturally relevant content experiences, presenting a massive opportunity for smart marketers and brands to fill this void.
Speak culture first. Culture is the new language. Knowing how and when to deliver Spanish language content is still very important, but cultural relevance is what really drives influence and engagement. Another smart money investor, Russell Simmons and his new agency, ADHD, which targets another largely “overlooked and underserved” audience, hip-hop culture, has set out to do just that.
Understand the similarities (and differences). You can’t be everything to everyone. Many of the key behavioral traits of the “mainstream” align closely to general Hispanic cultural characterics, however, it’s important to also understand the differences, the nuances, of each distinct audience segment. “Hispanics” (a label created by the U.S. Census Bureau in the 70s; who later added “Latino” to confuse things even more) have family ties to many different countries across Spanish speaking Latin America and their identities are rooted in those cultures, which vary greatly from country to country. Cultural intelligence is crucial to truly understanding and reaching this audience in a meaningful way.
Create Spanish and English (and sometimes Spanglish) content. This is a diverse, and mostly bilingual, audience that consumes the majority of their media in English. Taking a one-language-fits-all approach or simply repurposing ads and content in Spanish isn’t nearly enough (and can sometimes result in hilarious missteps like the “Got Milk?” campaign mistranslation to “Are you lactating?”). Marketers that understand the context of their audience, the acculturation curve, and can deliver authentic content relevant to when, where and how they choose to engage culturally will win big.
And finally, use trusted faces and voices. It’s worth saying one last time: culture is the new language. The most authentic and engaging brand stories now come from passionate people — real people — that drive real business results. Brands should be focused on authenticity, cultural relevance and who is delivering the message over the language it’s being delivered in. Your audience wants to see themselves reflected in creative and hear from people like them who share the same values and interests. Partnering with influencers to create amazing, relevant, authentic content who can reach and mobilize your audience in a non-disruptive way is an extremely powerful way to do this. And don’t forget, they also have incredible reach; the top 50 influencers in the Hispanic world have a combined reach of nearly 400 million — premium content creation, massive reach, influence and brand advocacy, all in one place.
In summary, U.S. Hispanics are way ahead of the curve when it comes to digital. They are mobile-dominant, over-index in digital video consumption and other key digital behaviors and are leaders in the adoption of new devices. But despite the facts, these “super” consumers continue to be vastly underserved and the opportunities to reach them where they “live” remain largely untapped.
In the years to come, this perpetually connected group will only continue to grow both in numbers and buying power. Brands and marketers who recognize that this is part of the “mainstream” and no longer a “niche”, understand the cultural and behavioral nuances and where and how to reach them will be rewarded with an incredibly loyal and fast growing power segment of the U.S. consumer market. If you’re not already, follow the smart money.
Have questions, comments or does your brand need help reaching this important audience in a meaningful way? Drop me a note: merv@heysway.com or send me a Snap (swaythem)! I’d love to hear from you.
Merv Bailey, Founder & CEO, SWAY (www.heysway.com)
About SWAY
SWAY connects brands with influential creators and engaged audiences in Latin America and the U.S. with capabilities across owned, paid and earned media. We partner with the world’s most recognizable brands to create and execute cross-platform campaigns backed by our digital stars, research, measurement, and insight-driven strategy.
