The demographic surge among Latinos in the United States in recent years has been nothing short of remarkable. This community has not only grown in numbers but has also become a pivotal force in shaping the nation’s cultural and economic landscape. Their population growth rate outpaces that of many other ethnic groups, making Latinos a prominent and influential demographic within the country.
It is also expected that the younger population of the United States will predominantly be of Hispanic heritage, as they represent the group with the highest demographic growth in terms of reproduction. This trend is set to make them the largest demographic group among the youth population.
The growth of the Latino population in the United States has brought with it a significant shift in advertising and marketing strategies, with a growing focus on targeting the Latino community. This shift aims to capture a broader and more diverse audience of potential buyers and consumers across various industries.
Recognizing the economic and cultural influence of Latinos, businesses and advertisers are increasingly tailoring their campaigns to resonate with this demographic, acknowledging their unique needs, preferences, and values. As a result, the marketing landscape in the United States is evolving to embrace the rich tapestry of the Latino community, reflecting a commitment to inclusivity and diversity in the marketplace.
Advertising growth focused on Hispanics
Thanks to the increasingly larger population of Latinos in the United States, more and more companies are focusing on creating advertising and marketing campaigns centered around multiculturalism, particularly targeting Hispanic individuals. According to these five characteristics, we can clearly observe the growth that this trend has experienced in recent years.
This demographic shift underscores the importance of recognizing and engaging with the diverse cultural landscape of America, as businesses adapt and tailor their strategies to cater to the evolving needs and preferences of the Hispanic community, contributing to the ongoing transformation of the nation’s marketing and advertising landscape.
1. Evolution and Growth of Multicultural Advertising Investment
As a result of several violent racial events in 2020 and an increased awareness in the marketing community of the high ROI that multicultural advertising can produce, multicultural advertising grew at rates of close to 10% in 2020, 2021, and 2022 and is expected to grow at a rate of between 2 to 3 times higher than the overall U.S. advertising market growth rate until 2027. Portada calculates the growth estimates of overall multicultural advertising with a 50% weight of a survey of 200 brand marketers and a 50% weight of the growth expectations and market views of more than 20 interviewed multicultural advertising buyers at brands and agencies.
2. Breakdown of Advertising Expenditures
In 2020 and 2021, most advertising expense growth in minority-owned and multiculturally-targeted media went into African American media properties as Madison Avenue made sweeping commitments to support Black owned businesses and media networks following the 2020 murders of George Floyd and other Black Americans. Large media buying agencies and an increasing number of national advertisers are committed to devoting between 1.5% to 5% of their budgets to support minority-owned and minority-targeted media. Starting in 2022, Hispanic-targeted media, and to a lesser extent Asian American targeted media, increasingly profited from this trend.
3. Hispanic Advertising Market Growth
In addition, to the trends explained in the charts on the prior page, which will add incremental investment volume to Hispanic advertising, endemic Hispanic advertising is going to grow at least twice the rate of the overall U.S. advertising market growth in upcoming years due to advertisers increasingly realizing higher ROI by marketing to the undersaturated Hispanic consumer (particularly in Spanish).
4. Hispanic Advertising Volume Breakdown: Language
Spanish-language content and media will continue to drive approximately 75% of Hispanic-targeted advertising. Portada estimates that approximately 90% of radio and TV advertising vehicles are in Spanish. Digital media, particularly, search and social media, which are used more by first and second-generation Hispanics, have a higher ratio of bilingual and English-language content.
5. Hispanic Advertising Volume Breakdown: Media Type
While in the overall U.S. ad market, the share of digital was almost 70% in 2022, for the Hispanic market, the ratio was closer to 60%, reflecting broadcasts (TV and radio) larger share compared to the overall U.S. advertising market. Portada expects the digital ratio in the overall Hispanic digital advertising market to grow by 1 percent annually until 2027, buoyed partly by the ascent of Hispanic-specific digital media retail media programs. Linear media (TV, radio, other) has increased its audience ratings and is expected to grow on average by 4.5% in advertising investment during the 2023-2027 period, after a COVID-induced decline in 2020.
What does this change mean for US Americans?
With the Latino community being so extensive in the United States, it has the potential to generate significant economic growth for entrepreneurs who choose to engage in marketing campaigns targeted at Latinos. This not only helps businesses increase their profits but also fosters inclusivity for Latino individuals in products and services that are essential to them but may not be readily accessible due to language barriers, lack of cultural representation, or a misalignment with the brand’s vision.
By embracing marketing strategies that resonate with the Latino demographic, companies can tap into a vibrant consumer base, bridge gaps, and better serve the diverse needs of this community, ultimately contributing to both economic prosperity and cultural integration in the U.S. market.
Indeed, many companies in the United States are adopting an inclusive approach towards Latinos, as exemplified by companies like T-Mobile, which has launched strong marketing campaigns to engage with the Hispanic community. These efforts have proven to be successful. Such initiatives not only resonate with Latino consumers but also demonstrate a commitment to diversity and cultural awareness, fostering a positive brand image and customer loyalty.
For example, Diego Osuna, the leader of Hispanic marketing strategy at T-Mobile, tells us that, “as an immigrant and sociologist with a deep understanding of the Hispanic community, I am very pleased to bring a unique perspective to this work. By promoting inclusion and understanding within our company and communities, we are driving business growth and positively impacting society as a whole.”
Mr. Osuna’s statement underscores the significance of individuals with diverse backgrounds and insights in shaping marketing strategies that resonate with multicultural audiences. It also highlights the dual benefit of such efforts, contributing to both business success and broader societal progress through inclusivity and cultural understanding.
Is there still much to do in terms of marketing?
Studying population groups by experts in culture and society is indeed crucial, particularly when it comes to crafting advertisements and marketing campaigns. This is because many advertisements can inadvertently be offensive to Latinos for various reasons, including the perpetuation of inaccurate stereotypes.
By conducting thorough research and gaining insights from experts who understand the nuances of different cultures and communities, companies can avoid potentially harmful missteps and ensure that their campaigns are respectful, inclusive, and culturally sensitive. This not only helps in building positive relationships with diverse consumer bases but also contributes to a more equitable and informed advertising landscape.
Absolutely, it’s crucial to adopt a nuanced approach when studying and targeting the Latino community, recognizing the tremendous diversity within this group. Latinos come from various countries, backgrounds, and cultures, each with its own unique traditions, values, and sensitivities. Treating them as a monolithic entity can lead to the risk of offending some while not resonating with others.´
Understanding these cultural intricacies and differences is essential for crafting effective and culturally sensitive marketing campaigns. It’s also important for companies to engage with members of the Latino community directly, seek feedback, and ensure that their campaigns are respectful and inclusive while avoiding cultural generalizations or misappropriations.
Absolutely, understanding Hispanics and dispelling harmful stereotypes is essential for addressing biases and prejudices that negatively impact the community. Stereotypes, such as the hyper sexualization of women, assumptions about work ethic, or the perpetuation of harmful generalizations about Latino men, can be not only offensive but also damaging to individuals and communities.
By promoting accurate and respectful portrayals of Hispanics in media, advertising, and society at large, we can help challenge these stereotypes and encourage a more inclusive and empathetic perspective. This, in turn, can contribute to greater understanding, reduced prejudice, and a more equitable society where all individuals are recognized and valued for their unique qualities and contributions.
Creating advertising that highlights a different, more accurate portrayal of Latinos and is well-received by the Latino community can indeed help break down the negative stereotypes associated with the Latino community in the United States. Positive and authentic representation in marketing and media can challenge misconceptions and foster a more inclusive and diverse cultural landscape. By showcasing the rich diversity, achievements, and contributions of Latinos in various aspects of life, companies and advertisers not only build stronger connections with this demographic but also play a vital role in shaping a more fair and accepting society where everyone is seen for their true worth, regardless of their background or ethnicity.
Source: Portada. Insights report.
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