Increase In US Hispanic Purchasing Power Will Lead To Shifts In Telecom Marketing Focus.

One out of every three dollars spent on telecommunications services in 2009 will come from US ethic communities, so the spending power of the Hispanic American, African American, and Asian American communities will become crucial to the survival of telecommunications providers over the next five years.

As of July 1, 2003 the total US population was estimated at 290.8 million. US Hispanics accounted for 40.5 million (with an additional 3.9 million in Puerto Rico), African Americans 34.7 million, and the Asian American population reached 12.2 million. Today, nearly one in three Americans (31.4 percent) belongs to one of these three major minority segments.

Hispanic is a term that was coined by the US Census Bureau in the 1970’s. This umbrella term was meant to replace earlier designations such as Mexican-American, or Puerto Rican-American. Officially Hispanic refers to any person residing in the US of Spanish-speaking origin. It encompasses people who are American-born with a line of ancestors that goes back hundreds of years to the conquistadors and the early Spanish settlers of the New World. It also includes recently arrived immigrants not only from nearby Mexico, but from Central and South America, as well as the Caribbean.

Hispanics represent a red hot demographic for many companies, a fact well understood by the telcos, who have historically led in advertising to the Hispanic market. Between 1990 and 2003, the Hispanic market has grown 85 percent, going from 21.9 million to 40.5 million. Today more than one in eight people in the US are of Hispanic origin, representing 13.8 percent of the total 2003 US population.

According to the Census Bureau for the two-year period ending July 2002 the Hispanic growth rate was four times that of the overall US population and about 14 times greater than the rate for non-Hispanic whites. If current trends continue, the Census Bureau estimates Hispanics could account for 15.5 percent of the population by 2010 and 18 percent by the year 2020.

The Latino population controlled $653 billion in spending power in 2003, and this number is expected to reach more than $1 trillion in 2008, according to the Selig Center for Economic Growth at the University of Georgia. Key factors accounting for this increase in US Hispanic purchasing power include continued population growth and increasing Hispanic employment and income levels. For the period of June 2002 through June 2003 the total US disposable income grew from $7.8 trillion to $8.1 trillion, a 3.6 percent increase. The US Hispanic purchasing power is growing at triple the rate of the overall US population and now represents 7.4 percent of the total US purchasing power, compared to 6.9 percent last year. More impressive, Hispanics contributed 23 percent ($65 billion) of the nation’s total purchasing power of $284 billion in 2003, while only accounting for 13.8 percent of the total US population.

Various data sources such as the Census Bureau and the Pew Hispanic Center reveal a change in the qualitative nature of the Hispanic market, pushing telecommunications service providers to adjust their marketing and sales campaigns. Latinos are not just growing in numbers, but they are altering their lifestyles, buying habits and media consumption. Perhaps the biggest shift that must be understood by marketers is the growth of the middle class English-dominant Hispanic. This growing segment of the US Latino population is defining the socioeconomic and cultural trends of the 21st century marketplace.

As the US Latino population continues to grow, ISPs, wireless service providers, and traditional phone companies will need to pay more attention to levels of acculturation and assimilation. Different levels of acculturation and assimilation directly impact how a company should market. Gone are the days when marketers could just target Hispanics on the basis of language only.

A new strategy in targeting US Hispanics is to market to them in a more bicultural manner and in English. Nearly 70 percent of the US Hispanic market is less than 35 years of age. This younger generation of Latinos, while speaking Spanish, tend to watch television and listen to radio in English. They also respond to Spanglish and to cross-over-culture artists such as Christina Aguilera, Jennifer Lopez, Shakira and Ricky Martin. Many companies are now reaching US Hispanics through both General and Hispanic marketing communications. ISPs, wireless carriers, new VoIP providers and traditional phone service providers should no longer assume that the majority of Hispanics can only be reached via Spanish-speaking marketing. Because of assimilation, Latinos are watching television programs in English, but a large portion are still listening to Spanish radio and reading Spanish-language newspapers and magazines, making marketing telecommunications services to the Hispanic population increasingly complex.

Total ethnic telecom expenditures of $94.3 billion represent nearly one third, or 32.7 percent, of all residential telecom expenditures in 2009.

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