Baltimore misses the Hispanic mark[et] - Part I

July 3, 12:37 AMBaltimore Hispanic Business ExaminerElianne Ramos

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[This article originally appeared on Elianne's Blog: www.speakhispanic.com]

On a stroll around Highlandtown, you might just get the feeling of having stepped into a different country: a country where the signs in store windows say “abierto” instead of “open”, where the scent of achiote and cilantro seems to call your name from the nearby restaurants, where the liveliest conversations are carried in Spanish. It’s a fact: Hispanics, the latest in a stream of immigrants dating back to the 1730s, have come to find a safe harbor in the city of Baltimore. Unlike other states, where the growing Latino community is generally viewed as a menace, this city has proven to be an ideal place for Latinos to exchange their daily sweat for a decent, peaceful living: a tight-knit community where the windows are always open, the tortillas are always warm and the breeze ululates to the beat of bachata and quebradita music.

According to Census statistics, Hispanics are the second largest minority in Maryland, representing about 6.3% of the population... and these numbers are expected to have a least doubled by 2010. All of which begs the question: How is it possible that, of the 100+ ad and marketing services agencies in the area, there's barely any offering to target this booming market?

To an extent, this follows that most commonplace of marketing trends: Hispanic marketing is usually at the ‘bottom of the totem pole’ when it comes to marketing organizations’ priorities, especially in this type of economy. According to the 2008 Right Spend Study II by the Association of Hispanic Advertising Agencies, overall Hispanic advertising spending in the US is historically short of the recommend 8 percent investment that the AHAA recommends to advertising agencies. The norm invested is usually around 3%, and that goes only for the brands that actually invest ANYTHING in the market.

While this certainly seems to be the case here in Maryland, I believe that the answer definitely has more than one layer:

1- The down economy. As the economy continues to sour, companies question all costs that do not have a clear payback. This means that the budget for multicultural marketing, including Hispanic, is the first one that gets cut – if it was ever in place to begin with. Now, conventional wisdom may tell you that this may be the sensible thing to do. But the truth is that right now, chances are that NONE of your competitors are targeting Hispanics. Which means, in essence, that this may be your chance to make the biggest impact. Smart companies know that investing into new markets is one of the best ways to gain market share. When the economy bounces back, the companies who are visionary enough to target Hispanics now, will have a new share of brand-loyal customers.

2- Ignorance. Some marketers simply don’t get multicultural marketing. They don’t understand it and they see no value in it. Since they can’t speak Spanish but are able to reach other ethnic markets in English, they stick their head in the sand and pretend the market’s not even there. They are not alone: in a recent national study by the ANA (Association of National Advertisers), four out of five advertising firms couldn’t say they understood where multicultural marketing efforts fit in their “overall marketing mix.”

3 - TMI [too much information]. This may seem counter to the point I made above, but it’s actually a quite similar situation, in the ‘sticking-your-head-in-the-sand’ sense. Given the avalanche of information available about the Hispanic market, and guided by their pre-conceptions about it, many agencies prefer not to even get involved. They simply don’t know what to do with the information that's available and, perhaps unconsciously, don’t think the market is really worth the effort. Unable to do transform their insights into action, they go back to recommending the same old, ‘safe’ strategies to their clients.

4- A dominant but ill-informed perception that immigrant families are mostly undocumented aliens working menial jobs. This is misinformation at its best. According to data from the 2000 Census, the Baltimore and Washington metropolitan areas are first and second in the nation in household income for Hispanics. Hispanics in those two cities earn a median household income of $60,170 - which far outpaces those in cities with higher concentrations of Hispanics, such as New York and Los Angeles. Furthermore, when it comes to spending – and partially due to their larger families – Hispanics' spending levels on groceries, telecommunication products, clothing, and children’s goods rank higher among Hispanic households than non-Hispanic households.

5- Lack of appropriate media vehicles. This is a sad reality, and it may only apply to Baltimore: with very few Spanish media outlets in Baltimore –aside from the Spanish radio station El Zol 99.1 and the biweekly Latin Opinion newspaper— agencies are left with very little choices to reach Hispanics.

6- Fear that it may be too expensive. When learning that, for this market, one size does not fit all, many companies decide that trying to target the market would be an expensive proposition. That is simply not true. In reality, you don't need to jump in with a full-blown communications plan to begin speaking to the Hispanic community. You can do it with small steps, perhaps investing in a grassroots program that involves them or doing a more comprehensive campaign targeting a section of the population or a ‘test’ market. Just remember that even if you start small, you need to show your long term commitment.

The bottom line is, Hispanics are a segment of the population that no company can afford to overlook. This is a ripe business opportunity for ad agencies handling local and national brands to get into the market. The key is to get into it early so as to make sure your message can reach Hispanics ‘while the iron is hot’ - meaning while this young demographic is at their peak of consumption - and still lacks any bias about traditionally "general market" brands. Hispanics are generally brand-loyal, so this may be your only chance in time to gain their loyalty for life.

A study released this week by the Nielsen Company, a leading global marketing, consumer and media measurement company, projects that the three consumer categories that will be driving the packaged goods trends by 2020 are baby-boomers, multi-cultural, and low-income consumers. Doug Anderson, the senior vice president of Global Research and Development for the company, talked about the consequences of ignoring these three categories, and did so ever-so-eloquently: “Those who keep doing what they’re doing today will be left behind.”

So if you still think salsa is just that red sauce you put in your nacho chips, or that the Macarena is all there is to Latin music, it’s time for your ad agency to get acquainted with the Hispanic market. Who knows, perhaps your agency might get actual bragging rights for being the first in Maryland to target Hispanics, opening a whole new line of revenue for itself. Perhaps one of your brands will become the next sensation in the Hispanic world. And perhaps - if you do it right - this market will, in return, decide to show you how to dance a mean bachata.

Agree? Disagree? Your comments are encouraged. Please add them below or send them to eramos@elianneramos.com

Don't miss the 2nd installment of this story, where some of the top Marketing experts in the area [Hispanic or otherwise], weigh in on the current and future state of the industry. Right here on Hispanic Business Examiner!

© 2009 Elianne Ramos. All Rights Reserved.