IMV13 : Marketing to Hispanics

The following is a transcript for IMV13 : Marketing to Hispanics. The original podcast is located here.

Announcer:

Welcome to the Internet Marketing Voodoo podcast brought to you by MindComet. And now, here's your host, Ted Murphy.

Ted Murphy:

Welcome to Internet Marketing Voodoo, Episode 13. I’m your host Ted Murphy and with me today is Nacho Hernandez, Founder and CEO of the iHispanic Marketing Group. Welcome to the show today, Nacho.

Nacho Hernandez:

Thank you very much, Ted.

Ted Murphy:

Nacho, that's an interesting name you've got there…

Nacho Hernandez:

That's a nickname. That's a typical nickname for all Ignacios. And there's another nickname for Ignacios which is Ignatius, but I don't go by that one, so I just go by Nacho.

Ted Murphy:

I like Nacho. I like cheese with my nachos.

Nacho Hernandez:

Yup, me too.

Ted Murphy:

So, Nacho, when it comes to being Hispanic how many different cultures are there?

Nacho Hernandez:

That's a great question, because there's actually about 21 Latin American countries that make up being a Hispanic. But for US Hispanics, it could be, you know, those that are Spanish-dominant or those who only speak English. And then it could be Mexicans, which in the US are 67% of them, Puerto Ricans 9%, Cubans, or any of those 21 different countries of origin, which may have different values, customs, behaviors, attitudes, who knows? You know, they might even know your brand or may not.

Ted Murphy:

It almost sounds like you would need multi-cultural marketing within the Hispanic community – is that correct?

Nacho Hernandez:

Yes, that's correct. And a good example of that is, for example, a kite. In Spanish, the word "kite" could be cometa, barilete, papalote, papagayo, volantin, maranhao, chiringas … I mean, all of these words mean the same thing, so which one is the correct one? And I believe it's each company's job to figure that one out, rather than back off from what is likely a significant opportunity.

Ted Murphy:

And your group in particular, the iHispanic Marketing Group, you guys go a lot of online marketing to Hispanic groups. Particularly, you do a lot of search engine marketing – is that correct?

Nacho Hernandez:

That's correct.

Ted Murphy:

What are the favorite places for Hispanics to go online, what are they doing, and what kind of search engines are they using?

Nacho Hernandez:

They usually go online from home. But what's interesting for US Hispanics is that they connect from work more than the general population. When it comes to Latin America, for example, they are a little bit different than the US Hispanic - although they have the same roots, they are more likely to connect less from home and more from work, but also a lot from Internet cafes. And that's almost like, part of the culture. So, when you look at these statistics of where they're connecting from, it's not just to see… Ok, where is it most likely to see where are these users connecting from? But also, what can I do to try to catch this user and try to, like, market other things, for example - I'm thinking out loud - if I'm Coca-Cola brand, perhaps I would like to advertise at these Internet cafes, and instead of having them you know, pay for some coffee, maybe they want to pay for some Coca-Cola, and then, I don't know, maybe I'll sponsor that Internet café, and then right before they go online they see an ad or something like that. So, there's a lot of opportunity here and this is where if you know where the user is connecting from, maybe you can advertise, or take benefit from that.

Ted Murphy:

We talked about where they are connecting from - where are they connecting to? What are some hot destinations for these consumers and are they following the same trends as the rest of America?

Nacho Hernandez:

Yes they are. In terms of online usage, email is number one and search is number two. The most popular search engine among US Hispanic and Latin Americans is Google, by far. We also asked them, "OK, we know this is the first place you connect from, but which one do you find the most relevant in terms of best search experience?" And 75% said Google number one, 14.7% said Yahoo and 4.2% said MSN. So, you can see that 76 percent is really taking a lot of power about Google and says a lot. And they also like to get news and do online shopping as well. For US Hispanics, they are very close - it's the third most popular thing to do online - is shopping. But for Latin Americans, it's not. And that could be due to a couple things. Number one is that there's not as many e-commerce Web sites in Latin America. Number two, is that logistics systems are not correctly in place in both functionality for systems and also for carriers, for UPS, FedEx. They don't have the same routes, the don't have the same infrastructure, to say. So even though that's there, they do online shopping, I mean, hot places in Latin America is like Mercado Libre which is an Ebay associate. For the US, Amazon and Ebay as well are among the top ten places of destination for shopping.

Ted Murphy:

Are these guys actually creating Latino-specific or Spanish language versions of these sites or are those sites still in English? What's the preference for Hispanics when they're surfing both US Hispanics and then also Latin American Hispanics?

Nacho Hernandez:

That's a great question. Amazon is not. Ebay is. For example, eBay has Mercado Libre for Latin America and it's probably one of the top three places – destinations – for shopping. Amazon is not, everything's primarily in English but we can also talk about the language preference for Web surfing as well. And it's quite different the way US Hispanics do it rather than Latin Americans. US Hispanics say that… 71 percent said that they prefer Web sites in English

Ted Murphy:

Wow, I wouldn't have thought that.

Nacho Hernandez:

Yeah and we were very surprised with that information as well. 19% of those said both languages about the same, and 8% said language makes no difference. Only 3% said they prefer Web sites in Spanish only. And that tells you a lot especially because the US Hispanic consumer that goes online is perfectly bilingual. And it's that user that has a lot of purchasing power. And this is why we believe US Hispanics will be spending over $7 billion in e-commerce this year.

When it comes to Latin America, it's a completely different story. 56% said they prefer Web sites in Spanish. And 29 said both languages about the same. Twelve percent said language makes no difference – I enjoy any Web site. Only 4% said they prefer Web sites in English only, so it's like almost a reverse of what the US Hispanic consumer does.

Ted Murphy:

I would assume that those same preferences carry over to search engine utilization in terms of languages?

Nacho Hernandez:

Yes and no. It changes slightly different because in a study done by a Hispanic marketing group named GMI – Global Marketing Insight. We asked them "If you search in Spanish, which would you find most relevant?" And 53% said an English listing. But 19% said a Spanish listing and 28% said it doesn't matter, Spanish or English. So as you can see, that 73% reduces to 53%. So, we also believe that if you do a Spanish ad when a searcher is doing a Spanish query, you're most likely to see a higher conversion rate, and that's very important when what you want is a higher return on investment.

When it comes to Latin America we said, "If you search in Spanish which would you find most relevant?" 75% said a Spanish listing and 24% said Spanish or English, doesn't matter. So again, you can see the clear differences between the US Hispanic and Latin American users although they have the same cultural background.

Ted Murphy:

And when it comes to search engines, what exactly are Hispanics searching for now? What's hot? What's the in thing?

Nacho Hernandez:

Well, mostly it's Web sites and information, that's 90% most popular. The next thing for US Hispanics is products. The next thing for Latin Americans is images. Images is very, very popular and music is hot as well for US Hispanics and Latin Americans. Unfortunately, maps is not very popular in Latin America because... It is for US Hispanics in general population here, because you have MapQuest, Yahoo maps, Google maps and other sources that allow you to play around with these functionalities. It also tells you where Latin America is going to grow to and, you know, eventually that will be a really important place for advertising as well.

Ted Murphy:

What about blogging and some of the community sites? Are you seeing any interest there?

Nacho Hernandez:

Yes, blogs are pretty interesting for US Hispanics. Actually, we saw more interest from US Hispanics than the general population for blogs and that was about 27% compared to about 19% of the general population for the US Hispanic. And Latin America showed about 17% interest in blogs, so there you have some comparisons.

Ted Murphy:

Very interesting. Well why don't we do this, Nacho? Why don't we take a call from our voice line? Just a quick note to our listeners, you can always call in to our toll-free number – that's 866-206-4461. And we'll take a quick call here and see if Nacho can help us out with this one.

Caller:

This is T.J. in San Antonio. I have a financial planning business, and there's a large Hispanic population in San Antonio. And I'd like to know what are some tips on how to reach them and market to them online?

Ted Murphy:

Nacho?

Nacho Hernandez:

Yes, well, San Antonio has a high population of Hispanics. And I think you have a great opportunity to target your users using local search marketing tactics. And you will find that keywords in Spanish are going to be about 90 percent cheaper than that of keywords in English. So I think you can find a higher return on investment of you money if you do a targeted PPC campaign for just, you know, the San Antonio region. We know that when it comes to targeting Hispanics, marketers take a local approach, most likely, so this could be definitely a good opportunity for you to do.

Ted Murphy:

Speaking of approaches and how you market to these groups, in what ways are marketers segmenting this vast population of Hispanics? How should I segment my marketing so that I'm taking advantage of all those different cultures that you mentioned at the beginning of the show?

Nacho Hernandez:

Most marketers are segmenting in a geographical way. So there selecting a place like, for example, this caller that wanted the San Antonio region. The second most preferred way is by language preference. So you've got you know, first-generation Hispanics, second-generation Hispanics, you've got the cultured and uncultured, so they try to identify these types of segments by language preference. And that makes it a little bit easier because you can find, you know, Spanish radio shows, you can find Spanish TV shows only, and when it comes to the Web, you really have to go bilingual. It really depends what you're objectives are. The third most common way is by income – to segment the Hispanic market. Then by country of origin, that's – as we talked about – there's about 21 different cultures. And culture level, we just talked about that. Education, and then there are other formats that they use.

Ted Murphy:

What do you think is the biggest barrier to marketers that are looking to start targeting Hispanics? I think everybody by now has recognized that the Hispanic population possesses a huge amount of spending power and a huge amount of opportunity for marketers. Where do you start? How do you know the best way to jump into this market?

Nacho Hernandez:

That's an excellent question. We did a study with Marketing Profs, iHispanic Marketing Group. We surveyed about 1,026 decision makers and marketers. And we asked them "What do you think are the biggest barriers of targeting the Hispanic market?" And the number one answer by almost 60% said hiring and training bilingual customer service staff. That's really interesting because we did a case study with a company called Viajeros.com, and when they added call center capabilities their sales increased 54 percent– they have 54% more buyers and have 37% higher conversion just by doing that. So, if you invest on it, I mean, you can definitely see a return.

The second thing that they said is a barrier, they said, reaching the market segment --translation cost. There's good news and bad news. I mean, yes it is expensive to do, but you have to look at it as an asset rather than an expense. The other thing you can do as well if you're going to start through an online strategy is that you don't have to translate the entire Web site. You can do it by segment. Let's say you translate 5 or 10% of your Web pages. And then, to make sure you have a higher chance of conversion, then translate those pages - your form, or your lead generation, or your shopping cart process – translate that as well. And see how that is converting for you. If you see a good return on investment, then go back again and then translate another 10 or 20% of the Web pages. And keep on monitoring that and making sure that's going through well for you. Statistically we found out from this question was that senior management is not convinced for return on investment. We really don't understand this. I mean, you've got great Web analytics software out there, for example, Google Analytics now gives it away for free!

Ted Murphy:

We love Google Analytics.

Nacho Hernandez:

Yeah exactly, we use that too. And it's great – it's very powerful information. I mean, you can see exactly what's going on with your site from entry to finish. There's really no excuse for senior management to say that, in my opinion.

Ted Murphy:

Nacho, I understand that you're the conference chair responsible for organizing the first Search Engine Strategies Latino in Miami, Florida this summer. Can you tell us more about it? How will marketers, and business owners, web publishers, etc... How are they going to benefit from a show that provides information on the Latino market?

Nacho Hernandez:

Well thank you. Yes, this is going to be a very exciting show that's happening. Incisive Media added it to it's listing of shows – they've got about, I think, 50 of them now. So they were very interested in growing in to this market segment.

It's going to be very useful because, you have to picture that there are five different groups of attendance that will be benefiting from SES Latino. Number one is US Hispanic companies that want to target US Hispanics, for example. That could be, I don't know, I'm thinking maybe, La Opinion, for example, a newspaper from primarily in the Los Angeles, California region. But they pretty much distribute all over the US.

Then you've got US American companies that want to target US Hispanics. For example, car makers are very popular, like Ford, General Motors. These are the type of companies that may want to come to SES Latino.

Third, you've got both US Hispanic and American companies that want to target Latin America as well as their own markets. And then you've got Latin American companies that want to target their own markets. Or, Latin American companies what want to target their markets plus the US Hispanic and American markets.

So you've got these five different groups of attendance that we will be reaching there. You've also got US Hispanic advertising agencies that I think is a great opportunity for them to come because history has shown that, you know, they have not been getting as much Internet budget lately, you know, in the past years because they've been focusing more on TV, radio, and other types of media. But now that they're learning that search engine marketing is a $14 billion business and it's really attractive, you know, they've got to get educated on this. This is not like some SKU they can add to, you know, their product list and start offering. If they do something like that, you know, they're going to hurt the industry, in reality. Because, search engine marketing takes a lot of commitment. Learning, and getting educated, and making sure that your client is getting, you know, really high return on investment.

And this is why, you know, in the general population, or the general advertising industry, you've got a new branch of search engine marketing firms that was able to take over this industry. And advertising agencies got to a point where they didn't really know what else to do except to start buying some of these SEM firms. So we'll see what's going to happen. But I think the first step for advertising agencies to target both US Hispanic consumers and Latin America is to get educated. And I think SES Latino is a great opportunity for this.

Ted Murphy:

Well hopefully our listeners got a brief education today. What are the top three things that you'd like to leave our listeners with in terms of tips for marketing to a Latino market?

Nacho Hernandez:

The number one thing is that they need to have realistic objective strategy and not always compare the Hispanic market with the general market. That's number one.

Number two is the top executives and marketing managers must be committed to the market. I mean, this is not just for a test here and there. And the entire process needs to have commitment, I mean, let's say that you do translate some of your Web site, and you do some of that part of the process. But then what happens when you're ready to close the sale? Do you have the right people, systems, and infrastructure? Are you setting aside enough resources for, you know, making sure that you have the highest return? And when it comes to the Hispanic market, you really need to know that it's not a "one size fits all." Use, you know, cost-per-click programs, do search engine optimization, organically. And do anything that you can but do it, you know, in a unique way. This is what we like to say to our clients, you know, we don't just target to Hispanics, we target as Hispanics. And I think that's very important.

Ted Murphy:

Our listeners can download the "Top Ten Things to Know When Marketing to Hispanics" from our Web site at Internetmarketingvoodoo.com. Nacho, it's been a pleasure having you on the show today. I really appreciate all the insight that you provided. And I wish you and your firm the best of luck in the future and I hopefully we can have you back on the show again.

Nacho Hernandez:

Thank you very much Ted, I really appreciate your time

Ted Murphy:

Thank you.

Announcer:

For more information on this week's topic, visit http://www.InternetMarketingVoodoo.com. This podcast has been brought to you by MindComet, the Relationship Agency.

[End of Audio]

Marketing Resources
Download Top Ten Things to Know When Marketing to Hispanics (PDF - 676.6KB)

Listen to the Marketing to Hispanics podcast.

Contact MindComet about adding multicultural marketing campaigns into your mix.

Subscribe to the Internet Marketing Voodoo podcast in iTunes.

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Hispanic marketing, Hispanic, search engine marketing, Latino marketing