At more than $1.4 Trillion and increasing $100 Billion per year, the current purchasing power of Hispanics in this country is not only growing in size, it is also getting younger. In 2015, 22.7MM Hispanic Americans - 42% of the total U.S. Hispanic population and 27% of all U.S. Gen Y’rs – were Hispanic Millennials. Over the past few years, as the population of Millennial-aged Hispanics and their spending clout have eclipsed older Gen Y and Baby Boomer counterparts, they have become an increasingly sought after market for leading brands and their agencies. But advertisers may be missing an important segment of this burgeoning market, the foreign-born, unacculturated “Hispennials".
The Forgotten Market
Increasingly, marketing dollars are being directed at more acculturated, bi-lingual, U.S.-born Hispanic Gen Y’rs, while diminishing levels of attention are given to unacculturated, foreign-born, Millennial-aged Hispanics. Several factors are driving this more favored status among the U.S.-born Latino segment:
- Focus on the fastest growing segment: A baby-boom of U.S.-born Hispanics in the 1990’s and 2000’s coupled with concurrent declines in immigration, especially from Mexico, have resulted in U.S.-born Latinos becoming the fastest growing and disproportionately recognized portion of the Hispanic market.
- Advertising is going mainstream: With the increased acculturation of U.S.-born Hispanics, increasing numbers of brands and agencies began mainstreaming Hispanic marketing programs into “total market” advertising.
- Simply a lack of recognition: Foreign-born Hispanics make up 40% of today’s Hispennial market and are projected to remain a significant component of the Hispanic market over the next 50 years. Despite these facts, advertisers have tended to discount immigrants coming from Latin America in their 30’s and 20’s as true Millennials possessing significant spending power.
Reconsidering the Prevailing StrategyIgnoring the foreign-born Hispennials may warrant reconsideration. From 2006 to 2015 U.S.-born Hispanics grew from 10 million to more than 17.3 million. During this same period, foreign-born Hispanic population outnumbered U.S.-born Hispanics, growing from 17.3 million to 19.9 million. Between 2015 and 2065, the Hispanic population is projected to grow from 57 million to 107 million – a net increase of 50 million, of which 29 million can be attributed to immigration.
A slowing rate of acculturation presents another reason for advertisers to focus on the foreign-born, millennial market. Acculturation is a complex process that typically takes 10-15 years. As it turns out, foreign-born Hispanics are assimilating more slowly than previous migration waves because:
- Digital technology is enabling immigrants to maintain existing ties with their origin countries
- A growing acceptance and even celebration of diversity in today’s society is reducing the incentives to assimilate associated with previous migrations. Slower assimilation rates create a larger market of unacculturated Hispennials.
Given its current and future potential, the immigrant Hispanic market remains a huge component of the Hispanic market and a critical key to unlocking its full potential.
Adopting the Right StrategiesIn many respects, targeting the unacculturated Hispanic market is less complex than engaging more bilingual or acculturated audiences. First-generation Hispanics:
- Are Spanish-language exclusive or dominant
- Tend to reside in Hispanic-dense neighborhoods
- Conduct business in Spanish and rely on Spanish media
- Are steeped in Hispanic and homeland traditions
- Buy products in which they have high familiarity
- Are entrenched within strong familial environments and community networks, maintaining family, community, church, food and other traditions as lifestyle cornerstones.
But foreign-born Hispennials are not simply a monolithic, mono-lingual market segment. Hispanics come from more than 20 countries of origin and have different backgrounds and distinctive needs. Plus, media strategies are rapidly changing and go well beyond traditional Spanish speaking TV and radio. Reaching today’s digitally connected Hispennial requires culturally relevant, content appropriate and compelling engagement strategies across digital, social and mobile channels. By adopting these strategies in combination with complementary strategies targeted at more popular bi-lingual and acculturated segments, marketers will be able to fully reap the rich rewards of reaching the total Hispennial market.
1. Immigration’s Impact on Past and Future Population Change - Chapter 2, Pew Research; September, 2015;http://www.pewhispanic.org/2015/09/28/chapter-2-immigrations-impact-on-past-and-future-u-s-population-change/
2. Percent Change in the Foreign-Born Population, by Decade, 1965-2015 and 2015-2065; Pew Research; September, 2015;http://www.pewhispanic.org/2015/09/28/modern-immigration-wave-brings-59-million-to-u-s-driving-population-growth-and-change-through-2065/ph_2015-09-28_immigration-through-2065-14/
3. Hispanic Marketing Moves Into The Mainstream; Murphy, Ian; Retail Dive, March 2015, http://www.retaildive.com/news/hispanic-marketing-moves-into-the-mainstream/373722/
4. Introducing The New (Old) Hispanic Market; Gomez, Henry; Media Post; January 2016;http://www.mediapost.com/publications/article/267727/introducing-the-new-old-hispanic-market.html
5. The Forgotten Hispanic Consumer; Villa, Jose, OpEd Contributor; Media Post; November 2015;http://www.mediapost.com/publications/article/261963/the-forgotten-hispanic-consumer.html