AHAA – Digital Marketing to Latinos draws interest – Spending Is Still Low.

Gone are the days of simple online advertising – banner ads and Web site sponsorships based on traditional metrics and marketing. Today, U.S. Hispanic advertising professionals at the AHAA 22nd semi-annual conference confirmed social networking, affiliate marketing, and search engine optimization are among the hot new media trends used to connect with Latinos. But are corporate marketers willing to invest more to expand into digital marketing or are dollars being shifted from traditional media spending?

According to AHAA media spending studies, Hispanic advertising budgets are on average approximately 4 percent of a company’s overall marketing budget compared to the nearly 8 percent AHAA indicates should be targeted to Latino consumers based on population and buying power alone. In 2002, U.S. digital marketing budgets were projected to reach $19 billion by 2006. Media Director Lucia Fernandez-Palacios of Dieste Harmel & Partners says she believes corporate marketers see value in interactive marketing to Hispanics but she hasn’t seen new dollars or separate budgets identified for digital campaigns…yet.
“Hispanic media has traditionally been less expensive than general market media and media budgets have been smaller,” Fernandez-Palacios says. “But as marketers begin to understand the complexities of the U.S. Hispanic consumer today, and place culturally relevant messages in English-dominant media to reach a particular segment within the Hispanic population, targeting Latinos becomes a more expensive proposition. Utilizing new media is a way to target Hispanics in a more cost efficient manner, provided it’s the best tool to reach your target consumer. Digital marketing allows you to only pay for those eyeballs you’re interested in reaching.”

Less expensive distribution, greater personalization and higher response and tracking rates are among the reasons marketers are turning to digital media. Over the past six years, digital technology has evolved into a mass reach medium, according to Mark Lopez, publisher, AOL Latino, and it is a powerful vehicle to deliver messages creatively. Yet with more than half of the Hispanic adult population online, digital marketing accounts for less than five percent of Hispanic marketing budgets, Lopez notes.

Nevertheless, he says it’s time to get creative and make digital marketing part of the overall marketing strategy to reach Latinos – a complement to traditional print and broadcast.

“Rather than discussing a media buy, we are collaborating with marketers to create ideas around passion points like music or movies,” Lopez says. “Consumers are actively engaging, requesting particular content about a subject then interacting with unique programming to receive the message. The Internet is the only medium where you can do this.”

The most important part of building a digital marketing campaign is exceptional planning and a solid foundation of knowledge, something AHAA Chair Carl Kravetz, chairman/chief strategic officer of cruz/kravetz:IDEAS, says is fundamental to successful campaigns despite the size of the budget. “Corporate marketers target Latino consumers because they anticipate a significant return on their investment in both dollars and brand loyalty,” Kravetz says. “It is the role of our Hispanic agencies to let cultural insight drive creative messaging and media plans using the most effective tools that yield the highest dividend. Integration is vital but we must ensure the Hispanic market strategy leads the digital market strategy.”

Marketers at the AHAA conference agree that content is critical. It must be relevant, engaging and have a significant purpose no matter what the delivery medium, but the opportunity to fill a void with meaningful online content, particularly in Spanish, is wide open, according to Diego Naranjo, director, marketing strategy & services for Latin3.

“Whether in English or Spanish, as a Latino I have to see myself in the creative message,” Naranjo says. “It’s what Hispanic marketers call gaining the share of heart, connecting with consumers no matter what the language. Research indicates that Latinos are searching online in English, but there is a demand for good Spanish-language content. Hispanics are online looking for fresh, engaging, meaningful content that is relevant to their Latino lifestyle and the lack of availability is forcing them to consume English-language.”

Naranjo believes, as other panelists at the conference acknowledged, that clients are likely reallocating dollars to explore the digital marketing return on investment. Lopez says it’s a critical marketing component and should be treated like radio or television. “The Internet needs to be a core component when marketers are doing media planning rather than as an add-on service at the end of the process,” Lopez says. As clients begin to take a holistic approach to marketing their products and services, the technology continues to advance, and the research validates the growing online Hispanic use and behaviors, Lopez says the dollars will follow.