After almost three decades supporting Hispanic marketing efforts, both on the client side directing Hispanic Marketing for Coca-Cola North America and on the agency side as founder and CEO of MarketVision working with Fortune 500 companies, I’ve seen some major corporate and brand shifts regarding how multicultural marketing is approached.
A recent Forbes article, “The Promise And Reality Of ‘Total Market’ And How CMOs Need To Address It,” describes the “swift, shocking and devastating” shift of “large percentages of ethnic ad business to general-market agencies within the past decade.” That shift is one of the most drastic I’ve seen in my career. The irony is that this blending of Multicultural into the Total Market at the peril of targeted efforts has come at a time when the Hispanic market has burgeoned and represents a huge opportunity for every brand in almost every category.
Hispanics are younger and continue to drive population growth. Hispanics have 19.8 more years of effective buying power than do non-Hispanic whites. Latinos account for $2 million in cumulative lifetime spend vs. non-Hispanic whites at $1.6 and African Americans at $1.3. Hispanics are also the most valuable grocery shoppers with an average monthly spend of $361 vs Total US at $331. Hispanics 25-34 top the shopper spend at $391 monthly. Total purchasing power of the Hispanic segment is now $1.3 trillion.
Reducing dedicated marketing dollars and focus makes little to no sense. This is not the first time the industry has shifted from concerted efforts with full Hispanic departments or Centers of Excellence and dedicated agencies to “inclusionary” total-market scenarios. As a matter of fact, I’ve witnessed this four times in my career, and each time it did not work, for many of the same reasons outlined in this article.
Here are two of the main reasons this model is flawed.
First, senior management at company meetings and conferences “talk the talk” from the main stage touting the importance of multicultural consumers to the company’s bottom line and the need for diversity and inclusion. I know because as CEO of a marketing agency, I’ve been in those meetings! But, when all is said and done, there simply is no real accountability for winning with multicultural segments or for inclusion; that is rarely part of management team members’ annual review. This model only works if there is a champion keeping the Hispanic segment top of mind throughout the entire planning process, strategy to execution… and that is extremely rare.
Second, in an effort to streamline and create efficiencies, corporations find that the easy fix is to eliminate multicultural departments and agencies, never considering the short- or long-term effects. Having watched the pendulum swing back and forth several times, I can tell you that the outcome of a blended effort has always been the same — market share declines. Latinos and African Americans are savvy consumers and shoppers who continue to embrace their culture, in spite of what many marketers think and believe. They can see right through campaigns that are simply translated, retrofitted or peppered with multicultural talent. Multicultural consumers crave and are attracted to brands that present an authentic view of their reality, offering products and scenarios that are relevant and compelling.
As Federico Subervi, former director of the Center for the Study of Latino Media and Markets at Texas State University, has said, “You can reach people through a common language, but you get to their heart through their culture.” The real bottom line is this: CULTURE is the key to winning with Latinos and Latinos are key to winning the TOTAL MARKET. The lack of cultural fluency that exists in “Total Market” shops and in corporate ranks is the reason this model will fail once again. Cultural expertise throughout the planning process, from strategy to execution, is the way to ensure a meaningful brand connection.