Lost in Translation
By: Alexandra Wharton
The Hispanic market is a huge opportunity, but the complexities have prevented marketers from fully capitalizing on the space.
Ten years ago, Jaime lived outside Managua, Nicaragua, worked in a shoe factory and took college classes. The then-35-year-old did not own a car and shared a house, a TV and a stereo with his parents, along with his brother and sister- in-law. Both Jaime and his brother helped his parents pay the rent, and the rest of Jaime's paycheck went toward saving for a move to the United States.
Now Jaime lives in Daly City, Calif. He works as a bookkeeper in San Francisco and rents a house with his girlfriend, Aura, and her 12-year-old son, Juan. Together they share a car, own a TV, a computer, a stereo and cell phones.
They got on the Internet five years ago and Jaime spends about two hours a day online, surfing the Web and doing email. Aura has difficulty reading and does not use the computer at all, but her son spends about an hour a day playing computer games.
Jaime reads news about Nicaragua at the La Prensa website and reads U.S. national and local news in Spanish at the Univision and StarMedia sites. He also regularly reads the Latino Channel on AOL, especially for entertainment and sports news.
The La Prensa site also helps keep him up to date with his favorite baseball team, El Boer, as well as delivering news about his other hobbies - following the Brazilian soccer team and seeing what's happening in the boxing arena. To follow news about his new local sports teams - the San Francisco Giants and the 49ers, he watches TV. He also uses the Spanish version of Western Union's website, geared for U.S.- based Hispanics, to check exchange rates, but he goes to the physical location to send money back home.
For his past two trips to Nicaragua, Jaime bought plane tickets at Expedia.com, a site he visits often to check prices. As time passes, he says he feels more comfortable with the security of purchasing online, but he has only bought plane tickets from the Web so far because he likes the experience of shopping in a brick-andmortar store so he can check the quality of products and walk around.
Because of the financial opportunities in the United States, many of Jaime's relatives also now live here. Jaime feels that he is living the American dream. He does not know that he is quickly becoming a marketer's dream. As a 45-year-old bilingual male with a combined household income of more than $50,000 - 8 percent of it disposable - Jaime and his household are part of a U.S. demographic with a purchasing power that dwarfs all other minority groups.
By 2007, the Selig Center for Economic Growth projects that disposable income in the Hispanic market will approach $1 trillion, which represents 9.4 percent of all disposable income in the United States.
Hispanics in America
Understanding the untapped opportunity of Hispanics online requires knowing more about the U.S. Hispanic population. And these days, there is no shortage of research, reports and studies examining this group.
In 2002 the U.S. Census Bureau announced that Hispanics are the largest minority in the United States with 13.4 percent of the population - or 38.8 million people. By 2020, Latinos are projected to be 21 percent of the population, and a third of them will be under age 18, which is another highly desirable segment for marketers.
But it's not just the size of this group, it's how much money they are making and where they are spending it. Hispanics are increasingly the major driving force behind revenue growth in consumer product and service markets, a $690 billion market that has attracted the attention of online marketers and retailers.
And while the median income for American households increased just 6 percent between 1996 and 2001, the median income of Hispanic households rose by 20 percent, from $27,977 to $33,565, during the same period. As of 2002, 31 percent of U.S. Hispanic households had an income of $50,000 or more, according to Scarborough Research and Arbitron.
So, as the Hispanic population is making more money, larger numbers of Hispanics are also getting online. Market researcher Centris found that the number of Hispanic online households in 2003 was 5.5 million.
A study by AOL/Roper reported that Hispanics go online 13.8 hours per week at work and 9.5 hours at home, compared with 8.4 hours at home for the general online population.
Hispanics Internet users tend to be younger than the overall population. Research from comScore Media Metrix shows that 60 percent of Hispanics online were 34 years old or younger, compared to 50 percent of the total Internet user population.
As Hispanics get greater Internet access, they are also starting to shop online more. According to Scarborough Research and Arbitron, 33 percent of online Hispanic adults made at least one purchase in 2002. Although that is significantly lower than the 56 percent of all Internet users who bought something online in 2002, as estimated by eMarketer, it is still increasing year-over-year. Still, according to Scarborough Research and Arbitron, only 13 percent of Hispanics purchased something online 10 or more times.
When U.S. Hispanic adults get involved in e-commerce it's typically travel and banking, according to the AOL/Roper U.S. Hispanic Cyberstudy. Also, Hispanics tend to consume more types of entertainment, including purchasing tickets, than Internet users overall.
The study also found that Hispanics engage in online communications and other forms of communications at a high rate. A study by the UCLA Center for Communication Policy reports that substantially more Hispanic users than non-Hispanics consider the Internet an extremely important source of information - 44 percent versus 32 percent.
An Untapped Market
Considering the growing purchasing power of Hispanics, the higher-thanaverage amount of time they spend online and the categories that they spend in, there is a surprising lack of affiliate programs aimed at Hispanics.
Geoffrey Gonzalez, president of Ahorre Marketing, a Hispanic marketing services company, agrees. "I think it is a tremendous opportunity," he says, but adds that the programs are "pretty much nonexistent."
In September 2000, affiliate consultant Shawn Collins wrote about the potential of the affiliate marketing industry for Hispanics in Latin America in an article on ClickZ.com, "Brave New Affiliate World."
Collins admits that the market has not taken off as he projected. "I thought it was about to explode five years ago, but it never happened," Collins says. "The Hispanic market is a very underserved area for sure."
Linda Woods, president and CEO of Partner Centric, agrees. "We have been waiting for this to happen; I think a lot of money is being left on the table," she says.
There are many theories as to why the online marketing community has yet to seize this seemingly huge opportunity. Continued on Page 2...
Tags:
hispanics, language, spanish, english, bilingual, culture, expedia, san francisco giants, western union, univision, managua nicaragua, starmedia, aol, email, 49ers, brazilian soccer team, playing computer games, parents, boxing arena, share a car, own a car, watches tv, latino channel, delivering news, favorite baseball team, hispanic market,
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