English remains the language of choice among the children and grandchildren of Hispanic immigrants, a new analysis of census data shows.

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Advertisers spent an estimated $3.1 billion in 2004 to market their products to U.S. Hispanics, up 11 percent from last year, according to U.S. Hispanic Media Markets Report, released by Hispanic Business Inc.

The report predicts that Hispanic market advertising expenditures in the U.S. will reach $3.6 billion by 2007. Spanish-language radio is predicted to garner the largest percentage of growth by 2007—gaining 21 percent.

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It is 8:30 p.m. and it’s time for commercials on prime-time television. A Target ad flashes on the screen. A family digs through their stockings, about to open presents, to a danceable tune that sounds like “Joy to the World,” but you can’t quite understand it.

That’s because it’s in Spanish.

Marketers increasingly are going beyond foreign language TV stations to reach a diverse customer base. Target Corp., General Motors Corp. and Major League Baseball have all recently aired ads in Spanish on network television. Locally, the Wayne County Community College District ran a recruitment ad in the general market in Spanish with English subtitles and another in English with Arabic subtitles.

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Southern Methodist University’s Cox School of Business may be the only university in Texas, and one of a few in the country, to include an Hispanic Marketing course in its MBA curriculum. Despite the phenomenal growth of the Hispanic market to over 40 million and a buying power approaching $700 billion, all too often marketing executives are not prepared to make effective decisions that are based on factual information about Hispanics. The course is intended for corporate executives and business majors who are likely to have a role in making marketing decisions related to Hispanic consumers. Business schools may begin to follow suit, but out front on this effort is SMU’s Cox School of Business.

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Hispanic attitudes survey probes the differences between Hispanics who consider themselves white and those who say they are of some other race.

Hispanics who view themselves as white are more likely to be better educated, earn more, register to vote and vote Republican…

Regional differences

…in California, only 42 percent of U.S.-born Mexican-Americans identified themselves as white, compared with 63 percent of their ethnic counterparts in Texas.

For instance, 81 percent of Puerto Ricans living on the island identified themselves as white in the 2000 census, while only 46 percent of those living on the U.S. mainland did so. And among Cubans, those living in Florida were much more likely to say they were white than those living in California.

Latin American culture

In many Latin American countries, race is a flexible concept and can change with a person’s status in society. Historical and contemporary evidence shows that a Latin American strain of racism favors lighter-skinned over darker-skinned people, but as an old Caribbean proverb says, “Money bleaches.”

U.S. Hispanics

In the United States, Hispanics are an ethnic group made up of people of different races, often mixed, and from a variety of ancestral homelands. In the 2000 census, they mainly selected two racial categories to describe themselves. Forty-eight percent identified themselves as white, and 42 percent chose “some other race.”

Hispanics who perceive themselves as white appear to feel that their place in American society is more secure, the report found.

…Hispanics who said they were white were more likely to describe themselves as American than those who said they were of some other race.

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The explosive increase in the U.S. Hispanic population coupled with its increasing purchasing power has advertisers jockeying for a larger market share of this largely untapped market. Overall advertising spending increased by more than 45 percent since 2000 while spending in the top 10 DMAs experienced an increase of only 26 percent, suggesting that advertisers are targeting smaller markets such as Atlanta and Denver in an attempt to increase their advertising reach. HispanTelligence estimates that Hispanic market advertising expenditures will increase to about $3.65 billion by 2007.

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Advertisers spent an estimated $2.79 billion in 2003 to market their products to U.S. Hispanics, a 13-percent increase from last year.

HispanTelligence estimates that Hispanic market advertising expenditures will surpass the $3 billion mark by 2005.

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From my hometown’s Baltimore Sun:

The Hispanic market alone in the United States will see its annual buying power grow from about $686 million currently to more than $1 trillion by 2009, said Jeffrey M. Humphreys, an economic forecaster at the University of Georgia.

“By 2009, the buying power of Hispanics in this country will exceed the economy of Canada,” he said. “It’s going to represent an increasing portion of your new customers. And since Hispanic, black and Asian households in the United States significantly lag behind whites in homeownership, the potential is even greater.”

Surette predicts Hispanic homeownership rates will quickly top the 50 percent mark from about 47 percent currently.

“Nearly a third of all the growth between now and 2010 is going to come from Latino-headed households,” he said. “Almost 90 percent [of Hispanics surveyed] want to become homeowners.”

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It’s no secret that the Hispanic population boom has gotten our attention. There are 39.9 million Hispanics in the United States. Census officials estimate that this figure will rise to fifty million by 2007.

According to the The Selig Center for Economic Growth, Hispanic buying power for 2002 was totaled at 580 billion with a predicted compound annual growth rate of 8.7 (The standard rate of growth for non-Hispanics is 4.8 percent). The center’s study predicts that by the year 2007, Hispanics dollar power will rise to 926.1 billion. Why are so many tax preparers and accountants are missing the boat when it comes to this market segment?

To understand the answer to that question, look to the statistics. The Kaiser Family Foundation reports that more than half of all adult Hispanics living in the United States today are immigrants, and another fifth are the U.S born children of immigrants. The number of foreign- born Hispanics in the U.S has more than tripled in the last two decades. A recent study by Strategic Research Corporation forecasts that by 2020, one of every five U.S. residents will be of Hispanic origin.

The Hispanic population boom is a fairly recent phenomen. Accordingly, there is a lack of both experience and information about culture, language, and marketing issues specific to what is now the largest minority group in the U.S. While accoutants are interested in growing their Hispanic client base, many lack the knowledge of how to do so effectively.

The Hispanic market is actually broken into four separate categories.

1. The new immigrant: Less than five years in the U.S with little or no English skills.
2. The transisitional immigrant: Less than ten years, still Spanish dominant but more acclimated and speaks better English.
3. The acclimated Hispanic: ten plus years in the U.S.
4. U.S born Hispanic/second or third generation.
Hispanics that fall into category three and four are usually served by the standard marketing strategies employed by most companies. Categories one and two however, remain incredibly underserved. The reason is that most companies who want to market to Hispanics typically have their media materials translated into Spanish. Unfortunately, this tactic will not work in to reach Hispanics in the first two categories.

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Hispanic consumers are the fastest growing ethnic group, with over 10 million Hispanic households in the United States today. Companies have recognized the influence of this growing market and Simmons, an Experian Company, is providing a way to understand the unique characteristics of these consumers by announcing the release of its Hispanic Cohorts(tm), the first Hispanic household-based segmentation system available.

Now available in the spring 2004 National Hispanic Consumer Survey (NHSC), Hispanic Cohorts(tm) identifies 19 distinctive and diverse consumer segments within the American Hispanic community. Hispanic Cohorts(tm) collectively offers marketers, agencies and advertisers the ability to understand the demographics, lifestyles, attitudes and behavioral characteristics of the Hispanic consumer.

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By outward investment appearances, the purchase by Spanish financial giant BBVA of Texas-based Laredo National Bancshares for $850 million this year was a typical bank acquisition.

Financially, the deal weighed in at about three times book value and 16 times earnings. But strategically the transaction represented much more. With the purchase, BBVA gained 35 branches in South Texas and 110,000 new customers – more than 93,000 of whom are Hispanic. And that connection to a historically under-served market, which experts project will have growing influence and affluence, was just the latest in a string of deals by global financial giants all seeking to get a foothold in the market.

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Impressed by the financial success of films such as Frida and A Day Without a Mexican, a growing number of U.S. production companies and distributors are gearing their efforts toward English-speaking Hispanics.

The potential market is enormous: The nation’s largest and fastest-growing minority makes up 40 percent of opening-weekend moviegoers, according to Arenas Entertainment, a leading Hispanic film producer and distributor in Los Angeles.

More attractive still is the market’s high proportion of English-speaking youth. Independent film companies believe they can target this segment of the Hispanic audience without losing the mainstream market.

“We found that 55 percent, almost 60 percent, of what is considered the Hispanic market consumes American TV in English. That’s a huge number because, in the end, that’s the young audience and the audience that really carries the money,” says Alvaro Garnica, film division director at Plural Entertainment, a Miami-based entertainment production subsidiary of Spanish media giant Prisa.

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Industry figures vary, but HispanTelligence® estimates Hispanics spent nearly $35 billion in 2002 on new and used vehicles and repairs, accounting for nearly 8 percent of the market. J.D. Power and Associates has estimated that by 2020, fueled by growing purchasing power, Hispanics’ share of the auto market could grow to 13 percent.

That potential has a growing number of automakers stepping up efforts in everything from marketing to dealer diversity. “Hispanic Americans can no longer be considered a niche market,” says Lonnie Miller, director of analytical solutions for auto industry consulting firm R. L. Polk & Co. “Hispanics are growing, both in numbers and consumer influence. Automotive manufacturers are taking notice and delivering products that appeal in all the traditional ways – design, price, performance and utility.”

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The lender is Hipotecaria Nacional, one of several Mexican mortgage firms that have followed millions of workers across the border.

Industry officials say immigrants’ dollars might help finance the flourishing Mexican mortgage market and provide them with a place back home. It is also a new way for Mexico to funnel part of the $13 billion yearly flow of remittances into tangible investments.

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One in five babies born in the United States is Hispanic. Hispanics are 33 percent more likely to buy toys than non-Hispanics. Growth in the population of Hispanic kids younger than 9 is expected to outpace non-Hispanics by 23 percent by 2010.

Adding it all up, Hispanic families are a natural market for toys.

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