Wooing the Hispanic Market
Jan 1, 2006, By:Bridget McCrea, Response Magazine
Reaching out to the U.S. Hispanic market may take a little more elbow grease and a different approach than many DRTV marketers are accustomed to, but for Savvier LP of Carlsbad, Calif., the extra effort is well worth it. Since late 2004, the company has been selling its 6-Second Abs program to the Latino community via long-form on Spanish-language stations like Univision and Telemundo.
"The Hispanic population represents a big customer base that we weren't reaching through our English-language media," says Stu Turner, Savvier's product manager, "so we decided to reach out to it."
To make that vision a reality, the company re-dubbed its existing show and created a Spanish voiceover for it. The 6-Second Abs manual and video were both translated into Spanish, and a new SKU was created for that product at the warehouse level. Savvier also hired a media buyer that specialized in Spanish-language shows, and two different telemarketing companies to handle the calls.
It didn't take long for Savvier to figure out that Spanish-language long-term inventory is hard to come by, but the company stuck with its new strategy as a way to augment its current sales channels, which included DRTV and retail. "We're in Wal-Mart, which has a good percentage of Hispanic customers," says Turner, who calls Savvier's Hispanic strategy effective and worthwhile. "This was another way for us to reach them, while building up awareness in the community. It's worked out great."
As the U.S. Hispanic population burgeons, and as marketers learn how to fulfill this demographic's wants and needs, DRTV is becoming an increasingly popular medium for reaching out to it. Recent data supports the trend: the 43-million-strong U.S. Latino population has an annual average household income of about $40,000 and the combined buying power of more than $700 billion (a number that's expected to pass $1 trillion by 2008).
Making up 14 percent of the U.S. population, Hispanics are younger in age (65 percent are under 35, compared to 45 percent for non-Hispanics) and tend to watch more television than the rest of the nation. According to Nielsen, Hispanics spend 25.4 hours per week watching TV, compared to 17.8 for non-Hispanics. They also spend 17 hours per week listening to the radio, compared to 14.75 hours for non-Hispanics.
"These factors, combined with the exposure from articles, magazines, statistical reports, increased number of Spanish networks, radio station programming, shows syndicated, celebrity spokespeople and overall increased visibility is drawing more and more attention to the market," says Nicole Ali, international sales manager for Toronto-based Northern Response. "It would be foolish to ignore the potential right in front of our eyes."
The fact that the Hispanic market is not only culturally diverse but also geographically dispersed makes reaching it a challenge. Traditionally concentrated in cities like Miami, New York, Los Angeles, Chicago, Houston and Dallas, the Hispanic population has, during the past 10 years, migrated into smaller markets. For example, the Latino community has grown more than 400 percent in North Carolina.
"That migration has presented challenges for DR advertisers, who now have to factor those smaller markets into their overall strategy," says Sam Pagan, partner at New York-based Hispanic marketing services firm Grupo PYR. "As a result, we've seen the media infrastructure follow that group as it moves into those new markets."
Taking the Plunge
As Savvier found out, making the move into the Hispanic market isn't always easy, nor are the rules clear-cut. As the Hispanic media buyer for shows such as Body By Jake's AbScissor and Cardio Cruiser, Dual Action Cleanse, PrudentChoice and Mission Health Center, Nadia Ashrafian, CEO at Mission Viejo, Calif.-based Capital Media Inc., says a lack of Spanish-language call centers is a key challenge.
"We definitely need more call centers to support the growth of this market," says Ashrafian. "Our traditional call centers are trying to figure out the U.S. Hispanic market, but they're not anywhere close to performing in it at this point."
Jim Brennan, president at Baltimore-based Brennan Response, says marketers reaching out to the Hispanic consumer must be able to apply DRTV basics to the "sensibilities of the Hispanic community." Understand that within that community, for instance, that there are different cultures and generations, each of which comes with its own buying habits and preferences.
"This community is made up of people from many different countries and cultures," says Brennan. "For the DRTV to work effectively, you must be aware of where your product is — and if it exists at all in the awareness of these communities, and to what degree — and figure out the best way to approach them within the context of their culture."
Adriana Eiriz, managing director at Vivar in Los Angeles, advises marketers to start by analyzing the feasibility of the products or services that they want to position in the Hispanic market. Questions that should be asked include: Is this product culturally relevant? Is the target market interested in it? Does the market need it? After the answers are analyzed, marketers can then prioritize their communication and messages to meet the market's needs.
Next, create a strategic plan that addresses critical issues like whether existing, English creative can be adapted via voiceover, or if it needs to be developed from scratch for the new audience. Base media plans on an initial two-week test, advises Eiriz, who says marketers should then shift resources to the highest-performing media outlets. And don't be afraid to tweak the show and/or media plan as needed. "If your sales fall off after going well," she says, "you can be sure that the problem lies in either the media plan, the creative or the backend."
Right now, all signs point to a strong U.S. Hispanic DRTV market, based mainly on the population's size, age, buying power and television-watching habits. While media avails aren't always easy to secure within the Spanish-language market, and support services aren't yet up to speed on this demographic, few would argue that the opportunities for marketers with useful, quality products and services are many.
"This is a booming market with a growing population," says Toni Erickson Knight, founder and CEO at Los Angeles-based WorldLink (and member of the Response Editorial Advisory Board), which represents more than 30 Spanish language media outlets in the U.S. and Latin America. "These factors will lead to an increasing number of marketers making an investment in the Hispanic market."
Knight expects technologies like video-on-demand (VOD), interactive commerce and wireless to help ease the dearth of Hispanic media inventory over the next few years. "As you add more channels, you create more inventory," says Knight. "As the media landscape changes with the evolution of new technologies, there will be new ways for marketers to connect with Hispanic consumers in the U.S."
Brennan sees "growth at every level" within the market, and says the media's reaction to the growing Latino population will benefit DR marketers looking to tap this demographic. As proof, he points to Clear Channel's recent announcement that 25 percent of its channels would be converted to the Hispanic format.
"Any company that wants to be successful is thinking Hispanic at some level right now," says Brennan. "No business that wants to stay in business can ignore the growth of this population."
TV as a Major Information Source for Hispanics
Hispanic Americans are two to three times more likely than the general population to turn to television as their primary source for entertainment-related information, according to a new GfK NOP "Hispanic OmniTel Media and Entertainment Study." The survey also found that Hispanics prefer to watch news magazines and sitcoms over other primetime television formats.
Asked what they considered to be the best source of information on a variety of leisure activities, the majority of Hispanic Americans cited television as their preferred media source. Nearly two-thirds (64 percent) said they rely on television to learn about new movies coming to theaters, and nearly half (48 percent) said they turn to TV to learn about upcoming concerts and sporting events.
Hispanics are three times more likely than other Americans to use television as an information source when making travel plans (30 percent vs. 10 percent) or deciding to go to a concert or sporting event (48 percent vs. 16 percent).
The fact that Hispanics see TV as a reliable source of information is good news for DRTV marketers looking to reach this demographic.
"Marketers, particularly those in the media and entertainment industry, must be mindful of the critical role that TV plays in the marketing mix when looking to target Hispanic Americans," says Bruce Barr, vice president, omnibus services for GfK NOP. "While some Hispanic Americans do turn to other media for information, there is a far less established 'word-of-mouth' network for gathering information on mainstream American leisure activities, especially among the less acculturated Hispanics. Television fills this void when it comes to making entertainment-related decisions."
Why Break Into the Lucrative Hispanic DRTV Market?
By Susan Pensabene and Michael Saray
Marketers that have successful direct response television (DRTV) programs confined to the Anglo marketplace might be missing a massive opportunity for profitable expansion. While recreating a successful Anglo campaign in the Hispanic market takes work, for the right product or service it is well worth the effort.
The Hispanic audience represents the largest minority group in the U.S. with 43 million (and counting) — 14.6 percent of the population. This segment has demonstrated tremendous spending power, with income growing four times faster than the U.S. average. Hispanic households also tend to be larger — 3.5 persons vs. 2.5 persons for the total market.
Hispanics have unique characteristics that make them an important segment, particularly for direct marketers. They tend to be family-and community-oriented. Family is an important responsibility and spending leisure time with family is part of the Hispanic lifestyle. While Hispanics are typically not as aware of financial tools and investments, they are keenly interested in learning how to protect and to provide a better future for their families. Hispanics are also known to be brand conscious and once they find a brand they prefer, they are loyal.
Why Target Hispanics With Television?
There are several unique aspects of the Hispanic DRTV marketplace that make it attractive to direct marketers. For one, television today is a clutter-free landscape for Hispanics. Spanish television networks and stations are much less saturated with DRTV ads than their English counterparts. Therefore, your message will have a much better chance of standing out in the Spanish arena as opposed to the English.
Spanish television is also much less fragmented. There are far fewer Spanish television channels, which translates into a higher concentration of potential viewers on any given Spanish station.
Hispanics tend to value advertising and are typically more receptive to commercials and less cynical about the content of advertising than a non-Hispanic audience. Hispanics actually rely on Spanish-language commercials as valuable sources of information and are open to receiving a multitude of marketing messages.
What about viewing habits? Hispanics spend an average of 11 more hours per week watching television as compared with non-Hispanics. The Hispanic viewer becomes more involved with both programming and commercials and is less likely to flip channels while watching Spanish television. Hispanics tend to watch television with family and friends and are more likely to watch an entire program, including the commercials — and even discuss them. Plus, the typical response tool of DRTV, the 800 number, is the preferred response channel for Hispanics.
These aspects work in a direct marketer's favor in terms of response and return on investment.
When planning a Hispanic DRTV effort, it is important to understand the key role that language plays in establishing trust and motivating Hispanic viewers to take action.
About 90 percent of U.S. Hispanics speak Spanish in the home, and the vast majority of Hispanics are more inclined to purchase brands that are advertised in Spanish. According to a Roslow Research Group study, Spanish-language commercials (as compared to English-language commercials) are 61-percent more effective at increasing awareness, 57-percent more effective in message comprehension, and nearly four-and-a-half times more persuasive. Even among bilingual Hispanics, Spanish-language commercials are 3.4 times more effective.
In addition to literally speaking the Spanish language, it is essential to "speak the culture" when communicating with a Hispanic audience. A simple translation of an English marketing message will not only fail, it may be damaging. To connect with and persuade action, you must understand the traditions of Hispanic culture, which may not necessarily sync up with "mainstream society" or the "American Dream."
To gain share of wallet within the Hispanic community, one must gain share of heart. The most effective approach, therefore, is to foster cultural relevance while using the audience's native language.
It is also important to create continuity across all touch points — telemarketing, fulfillment materials, Web site and all avenues of customer service must be presented in Spanish. If the offer is made in Spanish, then your whole infrastructure must work in Spanish. If not, a strong initial response can quickly turn into unqualified leads or dissatisfied customers.
When you consider that Hispanic DRTV performs today much like English DRTV performed in the golden days of the 1980s, the opportunities are virtually limitless. Those that approach the market by leveraging traditional direct marketing strategies and tactics will be the ones to create a win-win for Hispanic consumer and brand alike.
Susan Pensabene is president of a Hoboken, N.J., media company with a specialty in per-inquiry and Hispanic DRTV. She can be reached at (201) 418-0050 or email@example.com. Michael Saray is president of a full-service direct marketing agency specializing in the Hispanic market and can be reached at (212) 277-8027 or firstname.lastname@example.org.
Cooper Provides Back-End Insights
With three call centers in Monterey and Guadalajara, Mexico, Houston-based Hispanic Teleservices works with a wide variety of DRTV firms looking to get their piece of the U.S. Hispanic pie. Their experience is that the majority of companies investing in Spanish-language DRTV do not yet have the backend infrastructure to support their campaigns.
Response spoke with Kit Cooper, Hispanic Teleservices' president, to find out what's been going on in the marketplace over the last year, what challenges marketers are facing in their quest to reach the Hispanic market and what opportunities lie ahead.
Response: What key trends are you seeing in the U.S. Hispanic market?
Kit Cooper, Hispanic Teleservices: Language trends have come to the forefront of the industry with a research study by Roslow this year indicating continued preference for communication in Spanish among U.S. Hispanics in the future. The study challenges the assumption that the use of Spanish will decrease in coming years as succeeding generations of Hispanics are born and grow up in this country. The research indicates that the number of Spanish-dominant and bilingual Latinos will increase by 45 percent over the next two decades, with the number of Spanish-speakers growing 12.4 million above today's population of Spanish-speakers in the U.S. This will have an impact on the future use of DRTV in that the language will continue to shift over time.
Response: Are you seeing more demand for Hispanic telemarketing services?
Cooper: The demand for our services continues to grow, although I can't say how much is attributable to the success of DRTV for our clients versus a medium like direct mail. However, I know that marketers are obviously getting returns in the overall channels because we're continuing to see growth. The language preference trends of the next decades will obviously make the Spanish-content channels that much more important.
Response: What challenges do marketers face on the back end?
Cooper: A lot of companies have been struggling with creating the call center capacity and specialized infrastructure to support the DR initiatives. It's hard to get the full return on that channel if you don't have the proper infrastructure to handle the inbound sales calls, and it starts from the very basics of having the bilingual reps to handle the calls and an overall infrastructure that's localized to that particular market. Companies are starting to realize that they can maximize their DR by having a partner in Mexico, for example. If U.S. Hispanic callers are being handled by a university-educated, bilingual workforce in a scalable hiring environment there, then service levels are going to be reliable and will be an absolute improvement over anything that a marketer could source domestically.
Response: What factors should be considered when choosing a telemarketing firm?
Cooper: Training of TSRs is very important. The training operation should be localized to the market so that the agents handling inbound Spanish calls receive training on the unique purchasing behaviors and service expectations of that market. They also need to emphasize family betterment and educational themes. Look for a company whose operations are localized and whose reps are using a neutral business dialect or vocabulary. Equally as important is the calibration of spoken English and Spanish, since our experience is that about 40 percent of the calls that go through the Spanish phone tree will involve English.
Response: What do you see ahead for this market?
Cooper: The use of Spanish-language TV will definitely continue to be a key advertising dollar source for companies getting into this market. Studies show that the number of U.S. Hispanics will increase, and some people question whether we'll be targeting that market through English-language or Spanish-language media. Ultimately, we'll have some segments that acculturate to the mainstream U.S. market losing an interest and the ability to speak Spanish, however we also think that the number of Americans that prefer to communicate in Spanish will continue to increase over the next 50 years.