Cuban Americans

Hispanics Getting Connected

Posted December 29, 2004 by publisher in Cuban Americans.

Hispanic Business

After a slow start, the Internet is emerging as an increasingly important advertising medium for companies that want to reach the U.S. Hispanic market.

The Internet Advertising Bureau’s Hispanic Committee, comprising executives from companies such as Univision and Yahoo!, estimates that U.S. online advertising to Hispanics will reach $75 million this year, up 67 percent from 2003. Advertisers spent just $10 million in 2002, the bureau estimates.

Committee Chairman Peter Blacker, vice-president of multicultural and international advertising for AOL Media Networks, sees strong growth in 2005 as well. “I think the market is trending to well above $100 million for next year,” he says. “We’re seeing in our space right now sort of the go-go years of the ‘90s.”

Such optimism is based on growth factors ranging from greater Internet access among Hispanics and the climbing population to new online-marketing strategies. Although significant challenges remain, such as a dearth of Hispanic-oriented online content, marketing executives say it is becoming easier to pitch the medium to advertisers.

“No longer are [clients] saying, ‘Why should I be spending money online to reach Hispanics?’ Now they’re saying, ‘How do I do it?’ ” says Liz Sarachek, executive director of sales for Yahoo! U.S. Hispanic.

A strong selling point is the number of Hispanics who are going online at home. According to the 2004 AOL/RoperASW U.S. Hispanic Cyberstudy, 20 percent of U.S. Hispanic Internet users have been online at home for less than six months, compared with just 6 percent of general at-home Internet users. A separate report by Synovate predicts that by 2010, 62 percent of U.S. Hispanics will have access to the Internet at home – up from 45 percent this year.

Besides being a fast-growing Internet market, Hispanics also are spending slightly more time online than the general market. A 2003 study by the UCLA Center for Communication Policy determined that Hispanics spend 11.6 hours per week online, compared with 11.0 hours among non-Hispanics. The difference is greater at home, where Hispanics spend 9.8 hours per week online while non-Hispanics spend just 8.1 hours on the Internet, the study found.

Another factor cited for the increase in Hispanic Internet advertising is the “fresh” market. Albert Ferrer, vice-president and director of online and direct marketing for The Vidal Partnership in New York, says many Hispanics – particularly new immigrants – have not been saturated by marketing, and often pay close attention to advertising to learn about American culture.

Advertising agencies value the medium because it allows them to track results precisel. For example, they can measure the number of viewers as well as the number that take action in response to an ad. “It’s much easier online to say it works or it doesn’t work,” Mr. Ferrer says. “That direct-marketing, if you will, orientation of the medium really allows the marketer to invest very wisely.”

But since the growth has been so rapid, mistakes are still being made. For example, marketing executives recall seeing Spanish-language advertisements supported only by English-language Web sites. “You have to have a place [for consumers on the Internet] to go before you start advertising,” Mr. Ferrer says.

Another miscalculation, Mr. Ferrer says, is to assume that Hispanic Internet users will spend time at unsophisticated Web sites. In fact, he says, Hispanics expect advanced features such as broadband, interactivity, and animation.

AOL uses Internet technology in an attempt to reach the Hispanic market. In addition to its recent introduction of a $299 fully bilingual computer geared mainly toward Internet use, the company employs “welcome screens” that identify the user as a Hispanic, allowing advertisers to target them with appropriate content.

A lingering question facing marketers is whether Hispanic-oriented Internet ads need to be part of an integrated advertising campaign. An advertising executive who says they do is Monica Gadsby, CEO and managing director for Tapestry, part of Starcom Mediavest Group. “It’s not going to be a medium that can carry [a campaign] on its own,” she says.

But Sean Baker, head of new-business development for direct and interactive marketing at Dieste Harmel & Partners, says that while they may work best as part of a “holistic” campaign, “if you have a particular client who doesn’t have a lot of money to spend and does want to make a significant impact, the interactive space is still a good place to do that.”

Another question is whether Hispanic online advertising should be in Spanish. Mr. Baker says Hispanics who have been online for years are generally comfortable with English-language content. Mr. Ferrer notes some users still prefer Spanish, although he says that for advertisers, using the right tone and imagery is as important as the language.

Still, companies continue to struggle to make their Internet sites profitable – balancing costs with ad revenue. Earlier this year, CNN en Español removed all news from its site because it was not financially viable. The site now essentially provides information on CNN programming.

But Mr. Baker says demand is driving continued efforts, and he believes the gap between general-market Internet sites and Hispanic sites is narrowing. “It has been slowly developing,” he says, “but I think that within the next 12 to 18 months we’re going to see an explosion of new sites.”

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