In Search of an Identity: A Look at U.S. Hispanic Marketing in 2007

Hispanic Market Research

Hispanic marketers have finally gotten their long-awaited paradigm shift.

In the December issue of HispanicBusiness, I introduced the concept of the Hispanic Marketing Paradigm, a strategic framework created by U.S. marketers that has helped define Hispanic marketing for over thirty years. At the center of this framework is the belief that Hispanics are culturally and linguistically different from the Anglo population, and that these differences are effective drivers for the Hispanic marketing industry.

On September 20, 2006, the Association of Hispanic Advertising Agencies (AHAA) unveiled a new business model challenging the conventional way of thinking about Hispanic marketing. Carl Kravetz, the current Chair of AHAA, had this to say, “We have allowed the Hispanic advertising industry to be dragged into a Spanish versus English debate … and can no longer allow language—the Spanish language to be precise—to be the primary reason to market to Hispanics.”

Language alone, so it seems…

View original post 632 more words

Redefining the U.S. Hispanic Consumer

Hispanic Market Research

I’ve spent most of the year discussing the demographic differences of the U.S. Latino population, outlining the behavioral diversity within this group. But what really constitutes a U.S. Latino? What are the sufficient and necessary conditions for being a U.S. Latino?

A View at Culture

Culture has long been recognized as important in explaining behavior, and differences in national culture have been suggested to be an important explanation of people’s attitudes across countries. Determining the influence of culture on consumer behavior is not easy, given that culture is a complex and broad construct that is difficult to accurately measure.

In an attempt to better understand the changing demographic landscape of the U.S. Latino population, the Association of Hispanic Advertising Agencies, last year, proposed a new marketing model that defined U.S. Latinos based on a set of cultural dimensions that are said to differ from the non-Latino population.

As discussed at…

View original post 1,567 more words

Hispanic Market Research: 2010 Census

The 2010 Census count of Hispanics was 50,478,000, compared with 49,522,000 Hispanics in the bureau’s own estimates. The count was 1.9% higher (955,000 people) than the estimated population. In 32 states, the 2010 Census count of Hispanics was at least 2% higher than the estimates; in nine states, it was at least 2% lower than the estimates. In the nine remaining states and the District of Columbia, the difference was less than 2% in either direction.

By comparison, for the total U.S. population, the 2010 Census count of 308.7 million was barely lower (about 232,000 people) than the bureau’s population estimate for April 1, 2010. Compared with results a decade ago, the national Hispanic count in the 2010 Census was closer to bureau estimates than it was in 2000. The 2000 Census count included 10% more Hispanics than the population estimates, and state-level discrepancies also were larger than in 2010.

Unlike the decennial Census, designed to be a 100% count of the U.S. population, the Census Bureau’s population estimates are annual updates of counts from the previous census based largely on birth certificates, death certificates, immigration data and other government records. The most recent published state population estimates for Hispanics were as of July 1, 2009. For this analysis, the Hispanic estimates were updated to Census Day, April 1, 2010, by extrapolating the 2009 estimates based on each state’s Hispanic population growth rate from 2008 to 2009.

The Pew Hispanic Center analysis indicates that states with large percentage differences between their Hispanic census counts and census estimates also were likely to have large percentage differences between census counts and census estimates for their total populations. This reflects the large role that Hispanics play in overall population growth. Hispanics have accounted for most of the discrepancy between 2010 Census counts and census estimates of states’ total populations.

Source: Pew Hispanic, 2011

THE EFFECTS OF ACCULTURATION ON THE COGNITIVE STRUCTURE OF FOREIGN-BORN U.S. HISPANICS

Abstract (of my dissertation)

The prevailing view among U.S. corporations and Hispanic advertising agencies is that Spanish is the “best” way to market to U.S. Hispanic consumers. This dissertation contends that this is an oversimplification. This paper applies two theories of bilingual memory—the Revised Hierarchical Model and the Conceptual Feature Model—to help examine the cognitive structure of the foreign-born U.S. Hispanic population. Cognitive structure refers to a mental framework or schema that organizes and retains learned facts. This study proposes that the cognitive structure of foreign-born U.S. Hispanics changes based on the level of acculturation. Specifically, three propositions were tested: (1) Highly-acculturated Hispanics, who tend to prefer to speak in English, are likely to have an “English-dominant” cognitive structure; (2) Moderately-acculturated (bilingual) Hispanics, who tend to be fluent in two languages (English and Spanish), are likely to possess dual cognitive structures; and (3) Low-acculturated Hispanics, who tend to be proficient in Spanish, are likely to have a “Spanish-dominant” cognitive structure. The dissertation found statistically significant differences in the cognitive structures of foreign-born U.S Hispanics across three levels of acculturation (low, moderate and high), suggesting that Spanish is not the optimal way to reach all U.S. Hispanics. These results challenge the commonly held view that foreign-born U.S. Hispanics are a monolithic group and that Spanish is the “best” way to reach them. This study has the potential to influence how organizations develop segmentation and communication strategies for the U.S. Hispanic population in the future.

Redefining the U.S. Hispanic Consumer

I’ve spent most of the year discussing the demographic differences of the U.S. Latino population, outlining the behavioral diversity within this group. But what really constitutes a U.S. Latino? What are the sufficient and necessary conditions for being a U.S. Latino?

A View at Culture

Culture has long been recognized as important in explaining behavior, and differences in national culture have been suggested to be an important explanation of people’s attitudes across countries. Determining the influence of culture on consumer behavior is not easy, given that culture is a complex and broad construct that is difficult to accurately measure.

In an attempt to better understand the changing demographic landscape of the U.S. Latino population, the Association of Hispanic Advertising Agencies, last year, proposed a new marketing model that defined U.S. Latinos based on a set of cultural dimensions that are said to differ from the non-Latino population.

As discussed at length in the February issue of In Perspective, this model centers on a set of complex, interrelated and changing cultural values: interpersonal orientation, time and space perception, spirituality, and gender perception. In addition, it proposes that language, acculturation, socio-economics and ethnic pride are contextual factors, which no longer define the U.S. Latino population.

The components of this cultural model, which paint a homogenous face on U.S. Latinos, have been borrowed from various studies published over forty years ago. Central to this model is Hofstede’s cultural orientation model.

Hofstede’s Framework

Geert Hofstede conducted perhaps the most comprehensive study of how values in the workplace are influenced by culture. From 1967 to 1973, while working at IBM as a psychologist, Hofstede collected and analyzed data from over 100,000 individuals from forty countries. From those results, and later additions, Hofstede developed a model that identified four primary dimensions to differentiate cultures—power distance, individualism, masculinity, and uncertainty avoidance. He later added a fifth dimension, long-term outlook, not covered in this issue.

Power Distance Index (PDI) focuses on the degree of equality or inequality between people in a given country. A score that is high in PDI indicates that inequalities of power and wealth have been allowed to exist within the society. These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens, like India (77).

Contrary to popular belief, across Spanish-speaking countries, the PDI scores varied tremendously: Guatemala (95), Panama (95), Mexico (81), Ecuador (78), Venezuela, (73), Colombia (67), Peru (64), Chile (63), Uruguay (61), Argentina (49), Spain (42), and Costa Rica (35). This trend suggests that there is great variation within Spanish-speaking countries.

A low PDI score indicates a society that de-emphasizes the differences between citizen’s power and wealth, in which case, equality and opportunity for everyone is promoted on a national basis. The United States has a PDI score of 40. (See Table 1 for the full list of countries across the five cultural dimensions).

Individualism (IDV) focuses on the degree to which a society reinforces individual or collective achievement and interpersonal relationships. A high ranking in individualism indicates that individuality and individual rights are paramount in that society. Individuals in these societies may tend to form a larger number of looser relationships. The United States has a PDI score of 90, for instance.

A low individualism ranking typifies societies of a more collectivist nature with close ties between individuals. These cultures reinforce extended and collective families, where everyone takes a level of responsibility for fellow members of their group.

Again, across, Spanish-speaking countries, the PDI scores varied considerably: Spain (51), Argentina (46), Uruguay (36), Mexico (30), Chile (23), Peru (16), Costa Rica (15), Colombia (13), Venezuela (12), Panama (11), Ecuador (8) and Guatemala (6).

Masculinity (MAS) focuses on the degree to which a country reinforces the traditional masculine work role, control, and power. A high masculinity ranking reflects a country that experiences a high degree of gender differentiation. In these cultures, males dominate a significant portion of the society and power structure, with females being controlled by males.

Spanish-speaking countries, on the other hand, are again quite diverse: Venezuela (72), Mexico (69), Colombia (64), Ecuador (63), Argentina (56), Panama (44), Peru (42), Spain (42), Uruguay (38), Guatemala (37), Chile (28), and Costa Rica (21).

A low masculinity ranking indicates the country has a low level of differentiation and discrimination between genders. In these cultures, females are treated equally to males in all aspects of the society. The United States yielded a MAS score of 62, and was more or less in the middle relative to the high and low scores among those countries surveyed.

Uncertainty Avoidance Index (UAI) focuses on the level of tolerance for uncertainty and ambiguity within a given society (i.e. unstructured situations). A high uncertainty avoidance ranking indicates a country’s low tolerance for uncertainty and ambiguity. This creates a rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty. High Spanish-speaking UAI countries include: Guatemala (101), Uruguay (100), Peru (87), Spain (86), Costa Rica (86), Panama (86), Chile (86), Argentina (86), Mexico (82), Colombia (80), Venezuela (76) and Ecuador (67).

A low uncertainty avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks. The United States UAI score is 46.

Analysis

In analyzing Table 1, these cultural values show variances across Spanish-speaking countries; the most surprising finding was the range of scores among the Spanish-speaking countries. In some cases, there was a 60-point differential between the top and lowest ranking Spanish-speaking countries, as shown in the Power Distance Index between Guatemala (95) and Costa Rica (35). The U.S. PDI score, incidentally, was 40, a score similar to Argentina (49), Spain (42), and Costa Rica (35).

Among the other measures, there was a 51-point differential between the top and lowest ranking Spanish-speaking countries, as shown in the Masculinity Index between Venezuela (72) and Costa Rica (21). The United States yielded a MAS score of 62, which is relatively similar to key Spanish-speaking countries, including Mexico (69).

Surprisingly, there was a 45-point differential between the top and lowest ranking Spanish-speaking countries, as shown in the Individualism Index between Spain (51) and Guatemala (6). The United States showed an IDV score of 90, which was well above the scores of the Spanish-speaking countries. This finding may suggest that the Spanish-speaking countries (collectively) and the United States may differ significantly along the individualism-collectivism continuum.

Is there a surprise to any of this?

The amount of inter-country diversity goes against everything marketers in the United States have touted about the U.S. Latino segment. After all, we have been painted to be all different from the “Anglo” population (non-Latinos) and similar to one another culturally. Interestingly, the PDI, MAS and UAI scores of the United States do not differ significantly from the scores across some of the Spanish-speaking countries. This also goes against ‘conventional wisdom’ since many of us have been told that U.S. Latinos, in general, are very different culturally from non-Latinos in the U.S.

In recent years, several studies have suggested that cultural differences in many parts of the world (like Europe) may be declining. The effects of globalization and product standardization may be contributing factors. A 2001 study conducted by Paul Gooderham and Odd Nordhaug of the Norwegian School of Economics and Business Administration explicitly challenged the work of Hofstede, whose analysis of surveys was conducted between 1967 and 1973.

Because the world has changed a great deal since then, Gooderham and Nordhaug argue that Hofstede’s study is flawed. Hofstede’s cultural dimensions model, which sampled over 100,000 IBM employees in over forty countries, do not represent the overall general population of these countries.

The biggest problem, I see, in defining the U.S. Latino population based on Hofstede’s work is that the United States hispanic population, today, is not comprised of one cultural group, but instead — many. I also share the concern that the sample that Hofstede’s work does not reflect the diversity of the populations at large today, let alone reflect the diversity of the U.S. Hispanic population.

Application to Hispanic Marketing

The billion-dollar question is whether Hofstede’s cultural dimensions can be effectively applied to the U.S. Latino population, and to what degree can this model serve as a competitive advantage for marketers conducting business inside the U.S.?

At this point in time, there is no research to suggest that these cultural dimensions are valid and that they help define U.S. Latinos. I began with the provocative, and perhaps, a somewhat philosophical question—what are the sufficient and necessary conditions for being a Latino in the United States? This is a critical question to answer. I am not sure that one must yield a specific score on Hofstede’s cultural dimensions to be a ‘Latino’ (assuming that the scale is valid and generalizable).

There are a host of other factors like acculturation that affects one’s life. But is acculturation a sufficient and necessary conditions for being a U.S. Latino? (No, not all Latinos in this country are acculturating. Think of third and fourth generation Latinos).

Perhaps, what unifies the U.S. Latino population is the perceived notion of one’s Latino ‘identity’ which resides in their mind, interpreted in their own way, expressed individually and at times, collectively. But what is it that they are expressing? Does it change? If it does, when? Is it present in all Latinos?

Perhaps, it is a sense of self that aligns itself to the Latino culture; at times, that sense of self resides in the non-Latino community. Part of one’s identity may be rooted in one’s personal history in this country, whether it is in the ‘Latino experience’ (first generation) or passed down generationally (second generation or higher).

In trying to define what makes a Latino ‘a Latino,’ we must ask ourselves the question—what are the sufficient and necessary conditions for being a Latino in the United States? There is great diversity within the U.S. Latino population. Can Hofstede’s cultural model help unify or define the U.S. Latino population? What relevance does it have in defining the U.S. Latino population? Moving into the future, what we need are new research questions which will foster new insights.

Speaking the Right Language in Hispanic Marketing

For the last forty years, U.S. Hispanic marketers have preached to corporations that the most effective way to reach the Hispanic segment is by using Spanish, and by leveraging the cultural nuances that make Hispanic consumers different from the Anglo population.

Just a few months ago, the Hispanic marketing industry announced that language alone—
English or Spanish—would no longer define Hispanic marketing. Instead, it proposed a new conceptual (not empirical) model based on the “Latino Identity,” centering on a set of complex, interrelated and changing cultural values. Surprisingly, it also claimed that language and acculturation would play a supporting role as opposed to a defining role in Hispanic marketing. But is this correct?

A central question in Hispanic marketing continues to be—what role should language and acculturation play in Hispanic marketing? The fact that the industry has proposed a new framework centering on cultural values and has explicitly said that, “language and acculturation will no longer define Hispanic marketing” requires a closer look. The implications on marketing strategy are huge.

Language: a Defining Factor for Hispanic Marketing

Undoubtedly, the role of language in culture has been a source of great debate—and controversy—for decades. Two researchers who have had a significant impact on this subject are Edward Sapir and Benjamin Lee Whorf, who brought attention to the relationship between language, thought, and culture back in the 1930s.

Although neither of them wrote what researchers have termed “the Sapir-Whorf Hypothesis,” researchers, however, agree that culture is shaped by language, which in turn shapes the way that humans categorize their thoughts about the world and their experiences. As initially expressed in The Status of Linguistics as a Science (1929) by Edward Sapir, himself:

“… the real world is to a large extent unconsciously built up on the language habits of the group. No two languages are ever sufficiently similar to be considered as representing the same social reality. The worlds in which different societies live are distinct worlds, not merely the same world with different labels attached …”

Language is central to the understanding of human thought and behavior. Ironically, Hispanic marketing has grown into a billion-dollar industry not by minimizing the importance of language, but rather by getting corporate America to believe that there are linguistic differences between U.S. Hispanics and Anglos that need to be addressed.

These differences are not minor but significant, as the Hispanic marketing industry has strongly advocated for years that organizations interesting in reaching the U.S. Hispanic population effectively: (1) develop separate marketing efforts with incremental funding, (2) capitalize on the unique (Hispanic) cultural insights, and (3) communicate their message in the so-called language of preference (Spanish), if they were to succeed.

Moving the discussion away from language doesn’t really make sense, particularly when this strategy has worked so well. So, why the sudden change?

Changing the language in Hispanic marketing was not done by mistake, but rather by necessity. Recent statistical data has shown that the U.S. Hispanic market is not only Spanish-speaking, but English-speaking also. Much of the Hispanic segment today speaks English in addition to Spanish, and the traditional way of conceptualizing the U.S. Hispanic segment no longer is congruent with the changes in the demographic landscape.

Language—whether it’s English or Spanish—should not be the only variable that is used to define Hispanic marketing, but language should continue to be a defining one. After all, language will continue to shape the reality of all Hispanics in this country, whether they speak Spanish, English, or both.

Acculturation: Measuring Change in the Hispanic Market

Acculturation deals with the social and psychological changes in which there is continuous contact and interaction between individuals from different cultures.

The acculturation framework that most academics favor today proposes that acculturation is comprised of two independent dimensions: (1) the maintenance of the culture of origin and (2) the adherence to the dominant or host culture. Cultural maintenance is defined as the extent to which individuals value and adhere to their culture of origin.

Central to this construct is the strength with which individuals value the maintenance of their cultural identity and culture of origin. This second dimension intends to capture the level to which individuals become involved and value the culture of the host country. This dimension theoretically ranges from full participation to complete rejection of the dominant culture’s values, attitudes and behaviors. These two dimensions create a theoretical framework that allows individuals to live in two worlds.

Acculturation affects the majority of U.S. Hispanics, whether they are immigrants or third generation Hispanics. Stanford University professor, Amado Padilla, examined the cultural orientation across three-generations of Hispanic adolescents. This study found that the Hispanic cultural orientation decreases across three generations, while orientation to the American cultural orientation increases linearly.

What this means is that as Hispanics acculturate, they tend to lose some of their Hispanic cultural values (but not entirely), while gaining cultural values that traditionally define the host country (e.g., the United States). This study supports the bidimensional conceptualization of acculturation, mentioned above. More importantly, however, this study supports the notion that the adherence to cultural values changes with time, and that one’s cultural orientation is rooted in two cultures, not one.

Acculturation is useful in measuring the changes that take place in the lives of U.S. Hispanics. Acculturation can help define the ‘Hispanic experience’ in the United States accurately, and minimizing its role in marketing can only help create a false sense of reality. Acculturation can help measure a market that is changing—a market that is, in fact, heterogeneous.

At the same time, bidimensional acculturation poses a threat to the current business model for Hispanic marketers because this construct helps dispel the view that Hispanics are homogeneous in language and culture. Bidimensional acculturation measures the extent to which an individual adheres to the host (Anglo) culture and the culture of origin. Changing the language in Hispanic marketing is about changing a Spanish-centric business model that no longer fits the changing cultural landscape.

Does the Shift in Rhetoric Signal a Change in Marketing Strategy?

Absolutely not. Much of the industry’s growth has been based on the popular, but over-simplistic monolinguistic and monocultural view of the U.S. Hispanic market.

Significant growth can only happen when the diversity within the U.S. Hispanic market is openly discussed, prompting marketers to broaden its strategy in targeting all U.S. Hispanics. This approach will move beyond the ‘in-language, in-culture’ approach the industry has used for so many years.

Changing the conversation in Hispanic marketing is badly needed; most of us would agree. But Spanish language is a defining factor in Hispanic marketing. English will inevitably play a larger role in the future, but it has not significantly changed the marketing landscape, thus far.

Creating a new model based on the “Latino Identity” has not solved anything. It changes the conversations, but does very little to address the changing multicultural landscape. As Yogi Bera once said, “If you come to a fork in the road, take it.” At this point, the Hispanic marketing industry is on the same path it was on. Different rhetoric. Same language.

The Next Generation of Hispanic Marketing

When we speak of the U.S. Hispanic market, which Hispanic market are we talking about? The one that established the industry thirty-years ago or the one that will shape it in the next thirty-years?

Almost everyone in the industry agrees that the composition of the U.S. Hispanic market has undergone significant changes, but few agree on its exact composition. So, let’s pull some facts from Pew Hispanic Center (Suro and Passel, 2003) to set the record straight.

Demographics of the Hispanic Market

Between 1970 and 2000, the U.S. Hispanic population grew by 25.7 million with Hispanic immigrants accounting for 45 percent of that increase, and with second-generation Hispanics accounting for 28 percent. By 2000, first-generation Hispanics, totaling 14.2 million, made up 40 percent of the Hispanic population, while second-generation Hispanics, totaling 9.9 million, amassed to 28 percent; third-generation Hispanics, totaling 11.3 million, represented 32 percent of the total U.S. Hispanic population.

Between 2010 and 2020, the U.S. Hispanic market will continue to change. By 2010, first-generation Hispanics are expected make up 38 percent of the overall Hispanic population, with second-generation Hispanics increasing to 32 percent, and with third-generation Hispanics decreasing to 30 percent. By 2020, first-generation Hispanics are projected to make up 34 percent of the Hispanic population, with second-generation Hispanics comprising 36 percent, and third-generation comprising around 30 percent of the overall Hispanic population in the country.

Chart 1 visually depicts the U.S. Hispanic market by three generational levels across three points in time—2000, 2010 and 2020. This chart shows that the U.S. Hispanic market has well defined segments, each comprised of millions of Hispanics who vary by the country in which they were born and based on how long their families had lived in the United States. So, what implications are there from such a diverse landscape?

Demographic Implications

According to the 2002 National Survey of Latinos, conducted jointly by the Pew Hispanic Center and Kaiser Family Foundation, the primary language spoken among U.S. Hispanics varies by generational level. Among first-generation Hispanics, 72 percent of Spanish-dominant Hispanics speak Spanish, 24 percent are bilingual and just 4 percent are English-dominant. There is no real surprise in these numbers, for most people. However, among second-generation Hispanics, 46 percent of U.S. Hispanics are English-dominant, 47 percent are bilingual and just 7 percent are Spanish-dominant. These numbers appear to be the inverse of first-generation Hispanics. And finally, among third-generation Hispanics, 78 percent are English-dominant, 22 percent are bilingual and 0 percent is Spanish-dominant.

What does all of this research tell us about the U.S. Hispanic market? It suggests that “the market” is not exactly a nice cohesive “market.” The U.S. Hispanic population may be best called—a segment comprised of segments. Perhaps, a defining characteristic of the U.S. Hispanic population is that there are segments within the segment and that each is different from one another. The billion dollar question is how different are they from each other and on what factors do they differ?

Equally important in this discussion is the language factor. Does language unify or divide U.S. Hispanics? Based on the data above, language does not seem to unify all Hispanics living in the United States. As a result, we can no longer say that Spanish is the primary language spoken among all U.S. Hispanics and that Spanish is the only way to reach all Hispanics segments effectively. (See Table 1).

So, if U.S. Hispanics are inherently different by language, then what defines U.S. Hispanics? Is it culture? Or should we say, cultures—in the plural? To answer these questions, we turn to a study authored by Amado Padilla and William Perez in 2000, who measured cultural orientation across three generations of U.S. Hispanic adolescents.

This study found along American cultural orientation, third-generation Hispanics had significant higher mean scores (M=81.19) than both the first- (M=74.49) and second-generation Hispanics (M=77.17). However, first- and second-generation students did not differ greatly from each other on American cultural orientation.

On Hispanic cultural orientation, first-generation Hispanics had significantly higher Hispanic cultural orientation scores (M=74.74) than did the second-generation (M=68.01) and third-generation Hispanics (62.07), which is to be expected. These findings suggest that within a few generations, most Hispanic teens exhibit a predominant American culture orientation while maintaining traces of their Hispanic cultural orientation, simultaneously.

What does all of this mean? Though the study examined Hispanic adolescents, the findings suggest that one’s orientation to the American (Anglo) culture predominates, while traces of Hispanic culture orientation remain. So, to what degree does this study apply to the other segments of the Hispanic population? Because U.S. Hispanics are exposed (to various degrees) to two cultures, it is expected that Hispanics in the United States will show differences in their Anglo and Hispanic cultural orientations based on their generational status.

Overall Implications

In the end, the future of Hispanic marketing will need to address the cultural diversity within the Hispanic population. Having said that, we do not have to wait to do something about it; the future is here. As we saw in Table 1, 60 percent of the Hispanic population in 2000 was comprised of second- and third-generation Hispanics, many of whom speak both Spanish and English or English-only. By 2010, those figures will rise to 62 percent.

The question remains whether a Spanish-language effort is enough to target the U.S. Hispanic population. Based on the data presented by Pew, the answer seems to be that more must be done. Politically, it may be the wrong question to ask, but English does reach the bilingual and English-dominant segments. The question remains—how do we target these segments; and what are their differences?

Additionally, while there are clear segments within the U.S. Hispanic segment, it is important to note that they are all self-appointed Hispanics. But what does being ‘a Latino’ mean to each of these segments? They may use the same umbrella term, but do they define it the same way? Does it mean the same thing for all U.S. Hispanics? Besides using a convenient label to self-reference, what stirs the soul of these consumers? How different are they from one another?

The billion dollar question lies in—how to effectively address the diversity within the Hispanic segment from a media and marketing perspective. I am sure there is a great deal of work that’s taking place right now to answer this matter. But who will take the lead? What will leadership look like, feel like, sound like? At this point in time, one thing is certain: the future of the U.S. Hispanic population isn’t going to look anything like it did in the past. And neither should the approach.

Language Segmentation or Language Integration?

If almost everyone in the Hispanic marketing industry agrees that the composition of the U.S. Hispanic market has undergone significant changes, why is there still so much talk on language segmentation?

A Changing Landscape

As discussed in last month’s issue, the U.S. Hispanic market is really comprised of segments. 40% of the Hispanic population is foreign-born and predominantly Spanish-speaking, while 60% is second- and third-generation and largely bilingual and English speaking only (Suro and Passel, 2003). As a result, the U.S. Hispanic demographic today is quite diverse and much different than it was in the past.

There was a study done by Pew Hispanic Center (Suro, 2004) which examined the language in which U.S. Hispanics watched the news. Surprisingly, this study showed that U.S. Hispanics did not inherently prefer their news in Spanish. In fact, among foreign-born Hispanics, 50% consumed the news in English and Spanish, with 38% watching it in Spanish only and 11% in English. Among second-generation Hispanics, 43% watched the news in both languages, with 53% watching it in English and 3% in Spanish. Among third-generation Hispanics, 25% watched the news in both languages, with the overwhelming majority (73%) watching the news in English and 2% in Spanish.

Even when tracking media preferences among foreign-born Hispanics, the shifts in language were significant. Among Hispanics who lived in the U.S. 12-years or less, almost half of Hispanics surveyed (49%) watched the news in both languages, while 46% watched the news in Spanish and 4% in English. However, among the foreign-born Hispanics who were characterized by a longer stay in the country (12-24 years), 56% of them watched the news in Spanish and English, while 31% watched the news in Spanish only and 11% in English.

This tells us that targeting the U.S. Hispanic population only in Spanish needs to be reconsidered. Based on the above data, acculturation seems to be a factor even among the foreign-born or first generation Hispanic. What’s more surprising is that even in one of the most coveted dayparts—News—not all Hispanics watched the news in their so-called language of preference, Spanish. In fact, many Hispanics, regardless of their generational status, watched the news in two languages. Research showed that among third-generation Hispanics, the overwhelming majority of Hispanics (73%) had a preference to receive their news in English.

What does all of this say about the U.S. Hispanic market in the 21^st century? First, Spanish-language may not be the defining language for the U.S. Hispanic population, but examining which language (Spanish, English or both) may be the more appropriate step in understanding the full reality of this changing demographic. Secondly, the fact that this segment is characterized by the adoption of two cultures, it is going to be imperative that Hispanic marketing professionals become more effective in measuring the cultural and linguistic duality of U.S. Hispanics.

Changes in Media Measurement

Nielsen Media Research recently announced major changes that will begin to take effect, September of this year. Hispanic television audience estimates will be produced via the National People Meter sample (NPM) instead of having them reported on a separate panel, National Hispanic People Meter (NHPM), as done for the last 15-years.

Aside from folding the Hispanic sample into the National sample, the number of respondents will increase from 1,100 to 1,500. In addition, all Spanish-language broadcast and cable networks will be reported against the base of Hispanic households and people within the NPM sample. Furthermore, the number of English-language networks reported within Hispanic homes will be expanded to include more broadcast and cable networks, a reflection of the Hispanic segment’s consumption of English-language television and the fragmentation of the English-language television industry.

Most significantly, however, language will be reported at the individual level; with the current NHPM panel, language measures were only available at the household level. This provides marketers with the unique insight on whom within the Hispanic household is influencing or shaping media consumption decisions. The language strata will be reported by three clusters: Spanish-Dominant, Spanish / English Equal and English-Dominant; these language clusters will be available on the Hispanic and English television audience data tapes.

Its Significance

The convergence of Nielsen Media Research reporting is significant. As most of us in the industry know, Hispanic media cannot be examined without considering the delivery of the General Market media effort on the Hispanic demographic. The decision to centralize reporting across two segments (Anglos and Hispanics) reinforces the trend of media convergence across language.

This trend is not short-lived. It is a trend that will define Hispanic marketing in the future. Growth of the U.S. Hispanic population will be fueled by the second-generation Hispanics, who have been projected to grow 41% from 2010 to 2020, the fastest of any Hispanic segment in the country. What’s more interesting is that 47% of second-generation Hispanics consider themselves bilingual, while 46% consider themselves English-dominant (Suro and Passel, 2003).

Fifteen years ago, Nielsen Media helped validate the Hispanic market and legitimize Hispanic marketing as a trade. Nielsen was used to show what television programs Hispanics were watching. In the end, this type of ammunition helped Hispanic media professionals rationalize the need for dedicated budgets, which was an essential factor in establishing the Hispanic marketing effort with corporate America.

But times have changes. Significantly. Today, the Hispanic market is characterized by demographic and psychographic nuances that have major implications on media consumption. The market is no longer defined by Spanish-speaking immigrants; instead, the Hispanic market is comprised of segments; segments that share a cultural and linguistic duality reflecting two cultures, while the immigrant and third-generation Hispanic segments may be more deeply rooted in one.

So, the binary approach, as suggested by the title of this issue – language segmentation or language integration? – sounds provoking, to say the least. In actuality, it may not even be the right question to ask. For one, the reality of most U.S. Hispanics is in constant flux and it does not reside in the extremes. In my view, determining the optimal approach in targeting U.S. Hispanics may be contingent on which segment of the Hispanic population we are talking about.

In closing, language segmentation will continue to be an important measure in Hispanic marketing, since targeting the Hispanic population in the future will continue to be done in multiple languages. Because bilingual Hispanics can be reached in two languages, the opportunity lies in the ability to measure the integration of the English-language and Spanish-language creative efforts. Lastly, for the English-dominant Hispanic segment, English may be the preferred language, but identifying their hot buttons (cultural, values, etc.) will only help increase the effectiveness of future marketing efforts.

If You Build It, Will They Come?

The U.S. Hispanic marketing industry has been growing at an average of 10% since 2003, as more clients are spending more money targeting this segment. But when it comes to online marketing, not all clients are online, spending only $132 million or roughly 3.5% of the total Hispanic media advertising expenditures in 2006.

Redefining the Hispanic Market

Despite the common held belief that the U.S. Hispanic market can be effectively reached by a Spanish-language marketing effort, marketers today have to deal with a different, more nuanced Hispanic marketplace.

As discussed in previous columns, the U.S. Hispanic market is culturally and linguistically diverse. 40% of the Hispanic population is foreign-born and predominantly Spanish-speaking, while 60% is second- and third-generation and largely bilingual and English speaking only (Suro and Passel, 2003). Sixty-four percent of the segment is Mexican, 15% Caribbean, 9% Central American, 8% South American, and 4% Other (Spaniard, etc.).  As we will see, the diversity in the Hispanic market composition will have significant implications on what marketers do to target U.S. Hispanics effectively in the future.

Online Marketing Findings

In 2001, the Pew Internet & American Life Project conducted a study on the Internet activities of English-speaking Hispanics in English. In the summer and fall of 2006, the Pew Hispanic Center conducted a follow-up study in English and Spanish, talking to more than 6,000 Hispanic adults regarding their online habits in the United States. The results were quite interesting.

The most important finding in this study was the online penetration of U.S. Hispanics. The study found that 56% of U.S. Hispanics use the Internet, compared to 71% of non-Hispanic whites and 60% of non-Hispanic blacks in this country.

Much of the difference in Internet usage between Hispanics and non-Hispanics is explained by socio-economic differences. These factors are often times intertwined, especially in the Hispanic foreign-born population, making it difficult to isolate one variable from another. However, the study concluded that two factors—education and language—were important in explaining the gap in Internet usage between Hispanics and non-Hispanics in the United States.

Specifically, the study showed that those who had not graduated from high school were much less likely to use the Internet regardless of their racial or ethnic background. With 40% of Hispanic adults not having completed high school, compared with approximately 10% of white adults, the study found that the low rate of high school completion among Hispanics was correlated to their relatively low use of the Internet.

In addition, only ten percent of U.S. Hispanics have a college degree, and of that small group, 89% go online. Roughly half of U.S. Hispanics (49%) have finished high school, and of those, 70% use the Internet. Conversely, 41% of Hispanics have not finished high school, and of those, 31% use the Internet.

By comparison, 28% of whites are college graduates, and of these 91% report using the Internet. Twenty percent of African Americans are college graduates, and 93% report using the Internet. About 60% of white and African American respondents are high school graduates, with 69% of the whites reporting using the Internet, and 62% of the African Americans. Only 12% of whites and 21% of African Americans have not finished high school, and their rates of Internet usage are 32% and 25% respectively.

The study also showed that language was significant in predicting a wide range of attitudes and behaviors (i.e., Internet usage). The study showed that 78% of English-dominant Hispanics and 76% of bilingual Hispanics use the Internet compared with 32% of Spanish-dominant Hispanics.

But does Internet usage vary across generational levels? Seventy-six percent of U.S. born Hispanics use the Internet versus 43% of foreign born Hispanics. Second-generation Hispanics are the most likely group to go online. Eighty percent of second-generation Hispanics use the Internet, compared to 71% of third-generation Hispanics. This finding is significant because the native born segment of the U.S. Hispanic population is projected to grow more rapidly than first-generation Hispanics, and has the potential to grow Hispanic marketing in the future.

 The Offline Hispanic Segment

Forty-four percent of the total Hispanic adult population does not use the Internet. As discussed, the offline Hispanic population is characterized by lower educational attainment and a lower likelihood to speak English. 69% of Hispanics who did not complete high school and 68% of Spanish-dominant Hispanics are offline.

Interestingly, 68% of the offline Hispanic segment is Spanish-dominant, compared to 22% who is English-dominant. 57% of the Hispanic offline segment is foreign born, compared to 24% who is U.S. born. Only 11% of Hispanic college graduates are offline versus 69% who do not have a high school degree.

Of U.S. Hispanics who do not go online, 53% say they simply “do not have access.” 18% of non-user Hispanic adults say they are “not interested in going online,” 10% say going online is “too difficult or frustrating,” 6% say it is “too expensive to get access,” and 5% say they are “too busy or do not have the time to go online.”

Implications on Hispanic Marketing

A common approach companies take in their sense making process is to attribute factors to a demographic group, applying internal attribution, which assigns causality factors within the person. I argue that companies should also identify factors external to the individual that may help explain the cause for the digital divide among the Hispanic population.

It’s important to note that education and language do not cause the lower penetration of online usage among U.S. Hispanics. They are factors that are associated to online Hispanics, which can be used to develop a profile of the Hispanic online user. These factors can be used as predictors, which help identify what characteristics are likely to explain for variances in the dependent variable.

Regarding online marketing, research has pointed to one critical factor— access—and I think, this insight is right on. I do not believe there are significant cultural issues that prevent Hispanics from getting online. If more Hispanics had access to more computers, and more companies built their online business models around Spanish-language, do you not think we would see a change in the penetration of Internet usage among older, less educated U.S Hispanics? In the end, it is largely a supply and demand issue. Companies must first address the supply problem (access) before Hispanic marketers can affect consumer demand.

I am not sure it is as easy as building an online business model in Spanish and expect Hispanics to come. But I do know this; Hispanics respond to innovation—products and services that will make life in the United States easier or better. Imagine if every online Hispanic were to show an offline Hispanic friend or relative how easy it is to use the Internet, and if companies were to partially subsidize computers, would you not see a world of difference in how many Hispanics go online?

Reducing the digital divide in the U.S. Hispanic market will require a digital revolution—on two fronts. Companies must first address the issue of access, before we can expect to see a significant increase in the number of Hispanics online. In the end, companies that are willing to take a leap of faith with this demographic and are the least path-dependent may find themselves alone in this endeavor … but then again, is that a bad thing?

In Search of an Identity: A Look at U.S. Hispanic Marketing in 2007

Hispanic marketers have finally gotten their long-awaited paradigm shift.

In the December issue of HispanicBusiness, I introduced the concept of the Hispanic Marketing Paradigm, a strategic framework created by U.S. marketers that has helped define Hispanic marketing for over thirty years. At the center of this framework is the belief that Hispanics are culturally and linguistically different from the Anglo population, and that these differences are effective drivers for the Hispanic marketing industry.

On September 20, 2006, the Association of Hispanic Advertising Agencies (AHAA) unveiled a new business model challenging the conventional way of thinking about Hispanic marketing. Carl Kravetz, the current Chair of AHAA, had this to say, “We have allowed the Hispanic advertising industry to be dragged into a Spanish versus English debate … and can no longer allow language—the Spanish language to be precise—to be the primary reason to market to Hispanics.”

Language alone, so it seems, will no longer define Hispanic marketing. Instead, AHAA has proposed a conceptual model based on the “Latino Identity,” which centers on a set of complex, interrelated and changing cultural values: interpersonal orientation, time and space perception, spirituality, and gender perception. What makes this model unique is that language (and acculturation) are no longer at the core. Additionally, the metaphor that characterizes the new approach is based on a beating heart with each atria representing one of these four values. These values, in turn, are broken down into several cultural dimensions.

Undoubtedly, the new Latino Identity puts a new face to Hispanic marketing, shifting the conversation from language to other cultural aspects that represent the U.S. Hispanic segment more holistically. Because Spanish is no longer the only way to reach Hispanics in the United States, the Hispanic marketing industry has created a broader approach—a culture-centric approach—that it hopes can better serve them in the new millennium.

It is fitting that the new language in Hispanic marketing is no longer Spanish. Ethnic identity, whether we’re talking about U.S. Hispanics or other ethnic groups, is socially constructed, defined not only by the individual, but also by whom society thinks he/she is.

To the Hispanic marketing industry, the social construction of their identity is what makes the Latino Identity Project most salient. It will serve as a foundation for how it conceptualizes the future, for how it develops new marketing strategies, and for how it instills a renewed sense of excitement among new and existing clients. Ultimately, this model hopes to serve as a growth engine for the industry, both in the short- and long-term.

The question everyone will be asking is—how well will this new model serve Hispanic marketers? What affect will it have on corporate America and spending? The answers to these questions may prove disappointing.

First of all, this newly constructed model is hardly new or innovative. Much of the thinking around the Latino Identity Project is based on the research of Phinney, Padilla, Triandis, Tajfel and other leading academics over the last forty years. Nevertheless, the model is hardly groundbreaking, nor does it provide Hispanic marketers with anything that they didn’t already know or haven’t used in the past.

Secondly, the Latino Identity is a descriptive model and does not explain how or why the identity of Latinos change over time, a much more useful research topic for Hispanic marketers. What is lacking in Hispanic marketing today is objective research that examines the intra-group variances of the Hispanic segment. This type of research could spawn some interesting and possibly new strategic approaches in targeting U.S. Hispanics.

Lastly, one of the biggest problems of the model is its structure. It suggests that language and acculturation play a “supporting role” in shaping the Latino cultural identity. This assumption is worth questioning. Acculturation is a long-lasting, powerful force which affects Hispanics across generations. In actuality, changes in acculturation and language are key factors that shape the Hispanic-American experience.

The viability of this model is not based on its internal validity. It is, after all, a conceptual model and it must be treated as such. Its success in leading Hispanic marketing into the future will depend on how effectively it addresses the changing U.S. multicultural landscape, not on how effective it is in further differentiating Hispanics from the Anglo population.

Under the new approach, Spanish-language no longer appears to be the holy grail of Hispanic marketing. That’s a good thing. But let’s not forget that without language, it’s almost impossible to talk about culture. And without culture, we cannot talk about a segment that is growing in complexity and sophistication. Strategic innovation in Hispanic marketing will require that the Hispanic marketing industry take a close look at itself more frequently than it did this time around.