Experts debate the best way to build Hispanic marketing talent.
May 31, 2006
By Samar Farah
The debate over whether to reach out to U.S. Hispanics is just about over. Most savvy marketers know that the Hispanic market is bigger, younger and increasing its buying power faster than any other minority group in the United States. What’s just beginning, however, is the discussion over why marketers are doing such a poor job of targeting this group.
Consider these numbers: More than 100 of the top 250 television and print advertisers spend less than 1 percent of their budget targeting the Hispanic market. Some industries, such as pharmaceuticals and fragrances, continue to ignore the Hispanic consumer completely with their messaging. And when it comes to selling their brand to U.S. Latinos, only 20 percent of companies are "getting it right," according to Si Change Consulting.
Although CMOs may be more eager than ever to reach out to Hispanics, many are discouraged by the results of their efforts and unsure how to proceed. Many have taken the quick route to the Hispanic community, hiring a couple of Latino marketers or a Hispanic agency. Unfortunately, the resulting output frequently is all tactic and no strategy.
When companies want to market to a multicultural audience, "then they’re suddenly in a rush to hire people with the right surname," says Wanla Cheng, president of Asia Link Consulting Group. Practitioners and consultants agree that someone immersed in the Hispanic culture—either as an immigrant or a second- or third-generation American—can be a font of insight. Nevertheless, most consultants don’t believe that it takes a Latino to market to one.
Rudy Rodriguez, director of multicultural marketing for General Mills, has a staff of five specializing in the Hispanic segment. Asked about his criteria for hiring, he says that passion for the segment and leadership far outweigh cultural background and even language skills. "There are some people on my staff who are becoming great experts in Hispanic marketing, and they are not Hispanic and don’t speak Spanish," he says.
Ricardo Alvarez, vice president of the U.S. Marketing to Hispanics and Latin American practices at Zyman Group, agrees. "It’s critical that Hispanic marketing efforts are staffed with Hispanic market experts," he says. "Whether or not they are Hispanic is not as important as whether they understand the segment and the marketplace."
Other experts agree that when surname or cultural background becomes the main factor behind staffing efforts, companies run the risk of recruiting employees that know a lot about Latino tastes and traditions and only a little about the nuts and bolts of marketing. These hires in turn have trouble winning the trust and confidence of their more capable peers. Or, just as often, a company will hire a talented marketer of Hispanic descent but fail to support the effort—and the talent—financially.
Either way, Hispanic marketers can quickly become marginalized, leaving the CMO with an under-staffed, under-funded effort that hurts the entire marketing team. "Hispanic employees get frustrated because they start to get the sense that they were just hired as window dressing to check off the diversity box, and they’re not really being given the opportunity to market, and it causes all sorts of tension," says Rochelle Newman-Carrasco, president of Enlace Communications, an ad agency specializing in the Latino market.
Unfortunately, critics of such corporate practices also bemoan the small pool of marketers with Hispanic expertise. "I’m trying to scour the 50 states for talent," says Alvarez. "We’ve talked to 40 to 60 of the best of the best and it is scary the level of talent that is out there."
Some companies are filling the gap by bringing in Latino talent from outside the United States, which can be a risky approach, says Chiqui Cartagena, author of "Latino Boom." CMOs should not assume that a marketer who has worked in another Spanish-language region is prepared to capture the essence of the U.S. Hispanic community. "Having experience in Latin American markets is not necessarily good enough," says Cartagena, who also launched the Spanish version of TV Guide.
Together or Separate?
At most companies, Hispanic marketing efforts live under a separate banner, such as "multicultural marketing" or "Hispanic marketing." These are typically centralized groups that collaborate across brands or business units.
That’s pretty much the picture at companies such as General Mills, where Rodriguez oversees a group of five Hispanic marketers. Some observers argue for a more decentralized tack in which every member of the marketing team, regardless of responsibility and function, should have a stake in reaching this important segment. Others, however, think such an approach could actually hurt Hispanic marketing efforts.
"In an ideal world, Hispanic marketing would be fully integrated into marketing," says Newman. "[But] we don’t live in an ideal world, and when you say it should just be part of marketing, it doesn’t get proper attention or budgeting. It helps to have a champion for it and a dedicated voice."
Manny Gonzalez doesn’t think it’s an either-or situation. The former senior manager of multicultural marketing for Diageo (he recently joined Zyman Group as a managing consultant) helped grow brands including Johnnie Walker and Hennesey Cognac among U.S. Hispanics before being transferred to work full time on the Johnny Walker brand. Gonzalez believes a centralized team makes sense for a company that is still in the early stages of expanding its brand into the Hispanic market.
"If you’re trying to market to the Hispanic consumer and you have no history with that consumer, then it makes sense to establish a centralized group whose entire focus is that consumer," he explains. "You don’t want to affect the ongoing business of the brand team, because they have a [larger] mission to accomplish."
The problem is when this setup becomes permanent. "A centralized ethnic marketing department shouldn’t be seen as something that lives forever," he says. As brand recognition increases among Hispanic consumers, the Hispanic marketing efforts should be folded into the larger marketing team, he advises.
At General Mills, Rodriguez’s centralized team handles corporate projects while different divisions, functions and brands have their own Hispanic specialists who report back to Rodriguez on a dotted line. Those Hispanic representatives scattered throughout the organization also cycle through rotations in the multicultural marketing department—a corporate twist on the idea of cultural exchanges. "We expose brand marketers to Hispanic customs, cultures and traditions," he says. "And while they are with us, their management skills are a huge asset."
The Agency Debate
Not every company has the resources to hire Hispanic marketing specialists. "Our internal department is very small – myself and an assistant," says Barbara Ponce, director of Hispanic, Asian and African American marketing for Honda. With that kind of support, it’s little surprise that Ponce would refer to her Hispanic agency of record—La Agencia de Orci—as an extension of her Hispanic marketing department.
"They know the market better than anyone," she says. "They live and breathe Hispanic, they move throughout the culture."
Alex Lopez Negrete is the president and founder of Lopez Negrete Communications, which—like de Orci—is one of the top 10 Hispanic agencies in the United States. He describes the evolving role of the Hispanic agency like this: "We’ve become ad hoc segment managers, tour guides and teachers on how to do business in that segment. Advertising is just one component. Most Hispanic agencies are fully integrated shops with promotions, public relations, communication channel management."
Some consultants flinch at this level of corporate reliance on Hispanic agencies. They argue that Hispanic marketers look too often to agencies, in effect handing over their message to creative directors and giving them full reign, in part because Hispanic marketing efforts are understaffed and in part because companies are insecure about their own insights into the Hispanic culture.
"There is this shroud of mystery surrounding Hispanic marketing," says Alvarez. "There’s this ‘Just trust us on this, we’re Hispanic’ mentality." He and others warn companies that ethnic agencies are often not up to par when it comes to measuring the marketplace and ROI. Negrete counters that his firm has a bigger research department than any other agency its size "because of the resources our clients need us to bring them." Is there room for more rigor in that research? "Absolutely," he says.
Peeling Back the Layers
As some companies grow their sophistication in targeting Hispanics, they are developing a better understanding of the complexity and diversity of the Latino community. Agencies and consultants distinguish between New York and West Coast Hispanics, between Northeast Cubans and Floridian Cubans. To manage such nuances, companies often end up grouping Hispanics according to language preference.
Joe Paz, head of multicultural marketing for Verizon, admits that his company’s measurement systems have improved over the many years that Verizon has been targeting Hispanics. As recently as three years ago, the company assumed that customers with Latino surnames preferred communicating in Spanish. Verizon now keeps a record of customers’ language preference based on their calls to the multilingual help center. "We’ve gotten better with our data and keeping track of who is English-dominant vs. Spanish-dominant," says Paz. "That’s a big evolution for us."
Some observers say companies should spend less time worrying about consumers’ language preference and more time distinguishing between different levels of acculturation—an oversight that they believe leads brands to ignore a giant portion of U.S. Hispanics. The theory of acculturation, which has firmly replaced the notion of assimilation, maintains that Hispanic immigrants integrate into American culture while still embracing many aspects of their original culture, including the Spanish language. When marketing to Hispanics, it makes more sense, according to this theory, to distinguish between generations of Hispanics than between language preference.
Gonzalez and others say that Spanish-language media giants such as television network Univision and research centers like Nielson’s steer marketers toward Spanish-language-dominant Hispanics—in other words, the portion of U.S. Hispanics who are recent immigrants or fall into low-income brackets. Honda, for example, does all of its Hispanic advertising in Spanish, whether for print, radio, Internet, brochures or TV.
Spanish-language media companies are naturally less interested in playing up U.S. Hispanics who are bilingual or even English-dominant. But according to consultants, younger, U.S.-born Hispanics who are bilingual or primarily speak English make up 60 percent of the U.S. Hispanic market and thus represent the biggest marketing opportunity.
Robert Rose left Univision to start his own Latino media company, AIM Tell-A-Vision, which is producing English-language programs targeting that younger, more acculturated Hispanic segment. "Univision and others have sold the industry on the myth that to reach Hispanics you need Spanish-language television," says Rose, AIM’s CEO. "Language, in my mind, has contributed to the stunted growth of the Hispanic market."
Dilys Tosteson Garcia, president of de Orci, believes the debate over language misses the point. "U.S. Hispanics move in and out of Spanish, and you’re really talking about a bilingual consumer," she says. "At the end of the day, [the goal is to determine] What is their media behavior? Where can I reach them cost effectively? A lot of the time that takes you back to Spanish-language TV and print, because it continues to be more cost-effective."
For companies such as General Mills, efforts to get better at Hispanic marketing extend beyond the consumer into the entire organization. Rodriquez, in addition to overseeing the multicultural marketing team, leads a corporate multicultural center of excellence that functions as a kind of internal consultancy, gathering best practices, data and strategy recommendations for all minority segments, including Hispanic. General Mills also runs a Hispanic support network for all its Latino employees, which includes a panel of Latino employees who evaluate ideas on behalf of the brand teams, providing initial feedback on new Latino products and marketing ideas.
These initiatives make Hispanic marketing much more strategic than tactical at General Mills, says Rodriguez. "It appears in our annual strategic plan that we draft with the chairman and the CEO," he says. "So there’s a very visible, high-level commitment."
Source: CMO Magazine
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