It’s The Allocation, Stupid
By Wilson Camelo
We sometimes don’t realize the obvious until someone points it out, as James Carville famously did during the 1992 presidential election, saying, “It’s the economy, stupid.” This is often the case with budgeting for Hispanic marketing.
Have you said any of these lines or one similar following a pitch by an agency or Spanish-language media executive?
“I don’t have a Hispanic marketing budget.”
“Marketing to Hispanics isn’t in our plan.”
“Call me in a few months to see if we have any budget left to do Hispanic marketing.”
“We’ll try to include Hispanic marketing budgets in next year’s budget”
If so, then please allow me to point out the obvious: You do have a Hispanic marketing budget; you may just be spending it in the wrong places. The question comes down to proper allocation of marketing budgets based on your current and future customer base.
To allocate budgets properly, however, requires an honest look at and understanding of who your actual customer is today and who it will be in the future. Again, sounds obvious, right? Yet, many marketers don’t know — or perhaps don’t want to know — and often resort to going by who their customer was yesterday to make budget allocation decisions for today and for tomorrow.
I’m reminded of an indoor water park I pitched in the past whose marketing director said they weren’t budgeting for Hispanics because, “Hispanics aren’t our target market.” Pressed a bit further on who is the target, the marketing person indicated it was families within a 40-mile radius of their location, an area that includes five of the state’s largest cities, each with at least 30% Hispanic populations, and some as high as 45%. Not to mention the fact Hispanics have larger families than any other demographic in that area and are 10 years younger on average. So, in essence, they’re content to spend 100% of their marketing budget trying to target an older population that has smaller families.
Here are some practical tips to ensure you’re maximizing your marketing budgets:
1. Allocate proportional to your customer base, not a census number. If you spend 15% on the Hispanic market because Uncle Sam says that’s the percentage of Hispanics there are in the U.S., the good news is you are probably ahead of your competitors. The bad news is you are likely not maximizing your reach.
2. Test market. If you’re not ready to take a full plunge, try testing a Hispanic marketing program in one geographical area or across one product line.
3. But, dip more than your toe in the water. If you do decide to test market, invest properly and do a legitimate test. Don’t do one or two small or short-term activities and then blame the market for a lack of response.
4. Research the cost of Spanish-language marketing. You might be pleasantly surprised at the reach and frequency you can obtain, not to mention ROI, through the Spanish-language media at a fraction of the cost of the general market media.
5. Yes, you are likely reaching some of us via general market, but don’t waste the opportunity. While research is clear that Hispanics respond at a high rate to Spanish-language commercials and place affinity on those brands that cater to us, many Hispanics do consume general market media. However, don’t assume your message is connecting with us just because we saw your spot. Even in English, commercials need to be culturally relevant and appeal to Hispanics in ways that may differ greatly than the general market. Why? Because marketing to Hispanic is not about appealing to a language preference, but rather it’s about speaking our culture. There is a big difference between being bilingual and bi-cultural.
6. Go beyond topical spending. Some companies have budgets for Hispanic Heritage Month or are perhaps eyeing the 2010 World Cup, but tactical approaches will only yield you modest returns. This is a relationship-building demographic that is brand loyal where sustained approaches are most effective.
Story courtesy of MediaPost’s Engage:Hispanics