Internet Marketing, Digital Entertainment Key to $900 Billion Latino Spending
A few years ago, the suggestion of using the Internet or digital entertainment to reach the Latino market would have been met with laughs or even scoffs.
But that before the enormous surge in the number of Latinos going online, before the boom in rich media content such as streaming music, video and digital music downloads, and before the full realization that Latino youth are quickly becoming the dominant force in the U.S. marketplace.
It boils down to a numbers game and Latino youth win hands down. Of the 45 million (and growing) Latinos living in the United States, the U.S. Census Bureau reports that over half are under the age of 27 and one-third are under the age of 18. And this is just the beginning of the story. From July 2000 to July 2006, Latinos were by far the fastest growing minority segment in the United States, representing half the nation¡¯s entire population growth. And the population surge shows no signs of slowing down.
It only takes looking at trends such as the skyrocketing popularity of the Reggaeton music genre to recognize the power Latino youth wield. Suddenly, being Latino is "in", and everything Latino is "hot" þu from music, to dress, to attitude. With the latest statistics showing that 18 million Latinos are now online, that they spend 9.2 hours online per week, and that they are more likely than their non-Latino counterparts to download music and mobile content, listen to streaming music and watch streaming video, the message to marketers is clear: Latinos are a force to be reckoned with. If your company wants to get a share of the $900 billion pot of cash that represents the annual disposal income for this market sector, you better think music, think technology, think Internet. What's more, you better think fast þu before someone else beats you to the punch.
Why are Hispanics Going Online?
Over the past five years, the number of Hispanics with Internet access has skyrocketed, sending companies such as AOL on a quest to find out what's behind the sudden increase. The Internet access provider discovered that while lower prices and more widespread broadband access play an important role in the surge, "empowerment" is the overriding factor.
More so then their general population counterparts, AOL found that Hispanics view the Internet as the equalizer to achieving the American Dream. As a result, Hispanics have embraced the technology and tools offered by the Internet-using it as a research vehicle to do comparison shopping on everything from automobiles to travel, as a communication tool that enables them to keep in touch with loved ones, and as an entertainment portal that gives them never-ending access to streaming music, online radio stations, music downloads and games.
"There's a heavy focus right away on rich media," Peter E. Blacker, who served as VP, International and US Hispanic Marketing for AOL, noted at a conference on Latino marketing. "Hispanics are very techie and immediately zoom in on entertainment such as music downloads and watching music videos. Gaming is also very popular."
Marketing Online
When marketing to Latinos online, industry experts say that best practice advertising rules such as researching your target audience, selecting the right portals, and delivering targeted, compelling messages apply.
But they say it's also crucial that marketers focus on content that resonates culturally with Hispanics - and this doesn't just mean providing a bilingual site. In fact, studies have shown that many Hispanic youth actually prefer English over Spanish, but that they often look for bilingual sites as clues that the marketer is speaking to them. To address this, "Spanglish", the mixing of English and Spanish words on the same site, is starting to grow in popularity.
Because music and entertainment play such a central role among Hispanic youth, savvy marketers are turning to digital entertainment such as music downloads, ringtones and games as incentive tools. They are also paying close attention to the subtleties of specific regions in the country and tailoring their marketing to reflect the population base there þu such as recognizing that an ad should have a different feel when targeting Los Angeles, which is heavily populated with Mexicans, versus Miami, which has a high Cuban population.
Taking Action
With the Latino population in the U.S. now comprising nearly 15% of the entire population and a growth rate that is far outpacing every other population segment, industry experts say marketers can no longer afford to discount the Latino sector-a reality being played out at Fortune 500 companies, where the move is on to replace complacent marketing mangers with those who understand the power this minority segment wields.
The good news is that the opportunity is staggering, and the target marketþuwhile insistent on being communicated to in a way that's meaningful and personal to them-is very willing, even eager, to let their money do the talking.
Latinos: At A Glance
As a percentage base, Latinos still lag behind African Americans and whites in terms of their Internet use. A March 2007 study by Pew Hispanic Center reported that 67% of Latinos, compared to 77% of African Americans, and 86% of whites age 18-29 use the Internet. For the 30-41 age group, the percentages came in at 61%, 77%, and 85% respectively. But when you consider that there are twice as many Latinos under the age of 40 as whites, the numbers quickly skew in their favor.
* 18 million Latinos online
* Latinos stay online longer (9.2 hours per week vs. 8 per week general population
* Online Latinos are younger than general population (56% are 18-35 vs 34% of general population
* 55% of online Latinos listen to music online vs. 41% general population >
* 37% of online Latinos download music vs. 25% general population
Latino Demographics
Below are statistics regarding the U.S. Latino population provided by the U.S. Census Bureau.
* Largest minority population in U.S. (44.3 million as of July 1, 2006
* $1 trillion estimated annual spending power by 2010
* Largest % of young people: 34% under age of 18, more than one-half under age 27
* Fastest growing minority segment in U.S. (From 2000 ¨C 2006, Latinos represented one-half of entire U.S. population growth
About the Author
Barry Schaffer is president of Promotional Currency, LLC, the leading aggregator of digital content for promotional marketing purposes. Combining cutting edge promotional strategies and proprietary financial models, PC offers brand partners the first one-stop source for all online and wireless digital content promotions. As a full turnkey service, PC combines digital music, ringtones, games and other digital content with delivery, hosting, management, co-branding and risk underwriting services to produce a fixed-price model for wired and wireless promotions of all sizes and budgets. (www.promotionalcurrency.com)
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