“Forward to the Past?”

By Isaac Mizrahi / SVP, Managing Director at Alma

Back in December of last year, I participated on a Latinum Group panel about the “Total Market” approach as it pertains to Hispanic Marketing. During my preparation for this event, I talked to several industry leaders, including clients, media and agencies, and reached a conclusion- “Total Market” is one of the most misunderstood “buzz” phrases in our marketplace today.

The strong advocates of “Total Market” present it as a natural evolution of the demographic changes in America, where brands no longer should focus on Hispanics as a “unique target,” but rather integrate it into one single, comprehensive (hence “Total”) platform.

While at first glance the above description may seem very reasonable, a deeper analysis easily shows some pitfalls that I consider crucial, such as:

First: The idea that one insight can be strong enough to apply to all ethnic segments.

In my experience, there are few unique and universal insights that can create differentiated and relevant communication ideas across different segments. Chances are, the broader your insight, the more generic, less differentiated it may be to ethnic groups, undermining the probability of creating relevancy above the norm. It is what we call “We All Love our Moms” type-of-insight threat.

It might be helpful to remember that one-size-fits-all global campaigns have been, by and large, dismissed by global brands after they proved to be relevant and profitable to no one. A total market approach attempts to create work that’s inclusive of all segments. But ironically it can only work by excluding ideas that appeal to the segments individually.

Market segmentation was created to achieve higher effectiveness, by addressing different target audiences knowing and respecting their own sets of expectations, idiosyncrasies, wants and values.

Second: Forgetting that in Advertising, the delivery can be as important as the insight.

One of the reasons Hispanic advertising tends to resonate more with its target audience, is because it goes beyond insights, and is more closely related to format. According to several studies, usage of the Spanish language is important, but nuances like context, style, and humor are crucial to be able to resonate with Hispanic consumers. In other words, even a strong, insight-based creative idea can flop with Hispanics if the execution doesn’t provide cultural cues that can increase empathy and affinity.

In our experience, “Total Market” is being used as an excuse to cut budgets on behalf of short-term potential synergies and efficiencies. I believe that while we all should be responsible for looking for efficiency in our day to day, we can’t ignore that brands are built and growth is achieved based on higher effectiveness. What advertisers can save in reducing Hispanic Fees and Production Budgets is a relatively small amount when compared to what can be gained by crafting a truly relevant strategy to address Hispanics. The question they should ask themselves is: how much money are we leaving on the table?

Moreover, looking at recent Nielsen studies we have seen that Bicultural/Bilingual Hispanics show stronger response (Recall, Likeability, Consideration and Purchase Intent) when exposed to a creative message developed with Hispanic relevancy (in Spanish or in English) than to a General Market message based on Universal insights.

A natural consequence of “Total Market” is the potential creation of a more sophisticated form of stereotype-based messages, where casting and the usage of generic insights (plus maybe someone saying “Hola” or another word in Spanish in an English ad) may provide a false sense of comfort to marketers, who might believe they are truly crafting a modern 21st Century messaging while they might inadvertently just be moving “forward to the past.” The irony is that most of the companies that prioritize short-term savings versus marketing effectiveness tend to think of themselves as consumer-centric organizations.

In our view, a truly Total Market approach identifies the segments with the highest growth opportunity, allocates resources to these segments based on revenue growth and builds integrated plans around targets’ attitudes and behaviors, all united by a cohesive brand positioning and high level strategy.

Companies like McDonald’s are already implementing this true version of “Total Market” by putting ethnic insights at the center of their marketing plans, by understanding when and how to effectively connect with the Hispanic target and by developing integrated plans that connect with Hispanics in Spanish and in English when necessary.

We are seeing similar results for companies with much smaller budgets, confirming that when planned and executed correctly, Hispanic Marketing strategies yield better than average returns on sales and profits in the short and long term. Recently, the Association of National Advertisers recognized Rosetta Stone for its significant results in Multicultural Marketing, all while still managing a relatively small investment when compared to the top Hispanic advertisers.

In one in-house built financial exercise, we estimated that after only 2 years, an Effectiveness-Based Hispanic Communication Strategy could boost higher profits within a range from 5% to 75%, when compared to a strategy based on synergies and efficiencies only.

We live in a marketplace that has changed significantly during the past 5 years. Marketers will have to face a scenario of slow growth and high unemployment as the norm, not the exception. As in every moment of crisis, there are those who cry and those who sell tissues. We believe that those who bet on building Hispanic Marketing programs based on the belief that Segmentation and Effectiveness pay off, will beat brands and companies that believe on the false idea that they will win their target’s hearts and minds by cutting their investment on Hispanic Marketing.