After a slow start, the Internet is emerging as an increasingly important advertising medium for companies that want to reach the U.S. Hispanic market.
The Internet Advertising Bureau's Hispanic Committee, comprising executives from companies such as Univision and Yahoo!, estimates that U.S. online advertising to Hispanics will reach $75 million this year, up 67 percent from 2003. Advertisers spent just $10 million in 2002, the bureau estimates.
Committee Chairman Peter Blacker, vice-president of multicultural and international advertising for AOL Media Networks, sees strong growth in 2005 as well. "I think the market is trending to well above $100 million for next year," he says. "We're seeing in our space right now sort of the go-go years of the '90s."
Such optimism is based on growth factors ranging from greater Internet access among Hispanics and the climbing population to new online-marketing strategies. Although significant challenges remain, such as a dearth of Hispanic-oriented online content, marketing executives say it is becoming easier to pitch the medium to advertisers.
"No longer are [clients] saying, 'Why should I be spending money online to reach Hispanics?' Now they're saying, 'How do I do it?' " says Liz Sarachek, executive director of sales for Yahoo! U.S. Hispanic.
A strong selling point is the number of Hispanics who are going online at home. According to the 2004 AOL/RoperASW U.S. Hispanic Cyberstudy, 20 percent of U.S. Hispanic Internet users have been online at home for less than six months, compared with just 6 percent of general at-home Internet users. A separate report by Synovate predicts that by 2010, 62 percent of U.S. Hispanics will have access to the Internet at home – up from 45 percent this year.
Besides being a fast-growing Internet market, Hispanics also are spending slightly more time online than the general market. A 2003 study by the UCLA Center for Communication Policy determined that Hispanics spend 11.6 hours per week online, compared with 11.0 hours among non-Hispanics. The difference is greater at home, where Hispanics spend 9.8 hours per week online while non-Hispanics spend just 8.1 hours on the Internet, the study found.
Another factor cited for the increase in Hispanic Internet advertising is the "fresh" market. Albert Ferrer, vice-president and director of online and direct marketing for The Vidal Partnership in New York, says many Hispanics – particularly new immigrants – have not been saturated by marketing, and often pay close attention to advertising to learn about American culture.
Advertising agencies value the medium because it allows them to track results precisel. For example, they can measure the number of viewers as well as the number that take action in response to an ad. "It's much easier online to say it works or it doesn't work," Mr. Ferrer says. "That direct-marketing, if you will, orientation of the medium really allows the marketer to invest very wisely."
But since the growth has been so rapid, mistakes are still being made. For example, marketing executives recall seeing Spanish-language advertisements supported only by English-language Web sites. "You have to have a place [for consumers on the Internet] to go before you start advertising," Mr. Ferrer says.
Another miscalculation, Mr. Ferrer says, is to assume that Hispanic Internet users will spend time at unsophisticated Web sites. In fact, he says, Hispanics expect advanced features such as broadband, interactivity, and animation.
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