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Tuesday, July 24, 2012

Spanish Language TV and Hispanic Marketing

Article I, Section 2 of the United States Constitution requires that a census or enumeration of the population of our country be taken every 10 years. Congress uses the census figures to apportion seats in the House of Representatives, which then affects the makeup of our electoral college.

In most of my lifetime, the biggest interest coming out of the census is watching New York, Pennsylvania and Ohio lose House seats and Florida, Texas, and California pick them up. A shift to the Sunbelt has been evident over the last few census tabulations and states such as Utah will also likely pick up more House seats in the decades to come.

Marketers would often look at the Statistical Abstract that comes from the U.S. Census and study trends plus sometimes put together amusing little factoids such as number of flush toilets per primary residence in America.  But after the 2010 census data was released, more action seemed to come out of it than ever before.

Over the last few months, if you have been paying attention, the marketing and media world seems to have something of a California gold rush mentality toward the growing Hispanic population in the United States. For more than 20 years, demographers and futurists have reported on the growth of the US Hispanic population but not a great deal was done about it. Some of the soft drinks and McDonald’s, in particular, got in early and were rewarded for their foresight. But, many marketers and media conglomerates held back.  Some marketers that I know well basically said that yes the market was growing but Spanish language TV and radio did not work. A couple even mentioned measurement problems, which I always found a bit specious especially in Nielsen metered TV markets. Others said that young Hispanics watched Anglo TV so they could be reached as well in English language settings.

Now, things are changing and fast. The current Hispanic population in the U.S. is close to 52 million. By the time we hit 2050, it will be 133 million at current projections. Marketing wise, the average age of Hispanics in the US is 27 while it is 42 for non-ethnics. That has a boatload of appeal for lots of categories. Most important, purchasing power is about $1 trillion dollars, which would place the US Hispanic market in the top 12 of global national GDP’s. One source even said that it would soar to $1.5 trillion by 2015. That seems a bit high to me if the current level is at $1 trillion. But, let us not quibble. The spending is huge, growing, and very real.

The media business is taking notice and moving very fast. For the last three decades, Univision has dominated Spanish language TV in the U.S.  It has the stunning capability of reaching 97% of all US Hispanics. In the last year, they have added three new channels to their stable and remain the big player in Spanish language viewing. Working with Disney (ABC) they will roll out a 24-hour Spanish language cable news network in 2013.

Comcast, a huge media player, has big plans as well. When they purchased 51% of NBC Universal, they became parents of Telemundo, long the #2 player in Spanish language programming. Telemundo will now have many more hours of originally produced programming going forward. Comcast is also going to launch a unique niche player—Baby First America that will focus on that burgeoning demographic, the Latin Baby. It will be targeted at very young children and their parents and try to help the youngsters develop verbal, mental and motor skills.

Rupert Murdoch is not standing around watching either. Mundo Fox is ramping up which will consist of 60 local stations in the US that will cover three quarters of Hispanic households. People laughed when Murdoch took on the “Big Three” in 1986 and launched Fox. The Fox people have a proven track record of reaching young adults.

To me, overhanging all of this is a unique situation for young Hispanic adults in the US. If you are bilingual, as many are, you have MORE viewing options than other Americans. With several new Spanish language networks coming on board your choices will only grow. So, will these key emerging consumers gravitate toward more Spanish language fare? Or, will they follow the rule that “content is king” and watch the best programming available to them regardless of language?  To me, this has always been why advertising to the Hispanic market has been so tricky. The younger and better-educated Hispanics shift comfortably from English to Spanish language TV and back again. How much emphasis do you put on each has never been easy. And, will the flood of new Spanish language entries not increase Spanish language viewing much at all but merely lower shares for the entrenched top rated players?

The market is too big to ignore for sizable brands and will only get significantly larger. As more players in the brand world and media world pile in to this gold rush, there will likely be some big winners and some sour losers.

Tread carefully!

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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