Nobody tracks long-term culture trends better than Wall Street. "In 2009, an important inflection will occur when the population growth of [the] second generation will surpass the growth of first-generation immigrants. That is important because during [the decade 2000 to 2010] Hispanic media that use Spanish rather than bilingual will capture the lion's share of advertising dollars flowing toward the Latino consumer," said Leland Westerfield, a leading analyst at investment bank Nesbitt Harris, as quoted by The Wall Street Transcript. However, as "bilingualism takes hold more and more," he continues, "we will probably see a proliferation of cable networks and Internet media tailored to a more fragmented Latino population, fragmented by culture and linguistic differences among generations."
His assessment reflects national demographic projections that put the first-generation population at about 18 million by 2010, versus 30 million for second and subsequent generations – representing growth rates for the two segments since 2000 of 21 percent and 28 percent, respectively. And the gap broadens so that second and subsequent generations will represent two thirds of a 60-million-strong Hispanic population by 2020, according to data from the Pew Hispanic Center and Urban Institute. (See chart, "U.S. Hispanic Population, Actual and Projected: 1980-2020.")
Current Data May Foreshadow Shift Data from the Hispanic Business 2005 Media Markets Report show a media market still in expansion mode, but slowing. While Hispanic ad spending continues to grow at more than double the GDP rate, the 2005 ad spending growth rate of 7.4 percent – to $3.4 billion – represents a definite deceleration from 10.8 percent in 2004 and a high of 13.3 percent in 2003 (see table, "Hispanic Market Advertising Expenditures by Medium: 2005").
•Broadcasting accounted for 83.6 percent of total spending, with TV alone claiming nearly two thirds (63.2 percent) of the pie.
•Radio adds another 20.4 percent.
•Followed by newspapers (8.4 percent), Internet (2.9 percent), magazines (2.7 percent), and outdoor ads (2.4 percent).
Geographically, growth in the 10 largest Hispanic DMAs, or Designated Market Areas, amounted to only 3.8 percent. Most of the overall national growth came from second-tier markets such as Albuquerque, Atlanta, Denver, the Texas border region, and Washington, D.C. (see story, "Tale of Two Trends").
Turning Point: 2002-03
In retrospect, 2002-03 appears to have been a turning point. In 2002, Hispanic market ad spending as a proportion of total U.S. advertising expenditures peaked. And since then it has flattened, while Hispanic population and purchasing power kept growing (see table, "Hispanic Market as a Percentage of U.S. Market: 2000-05"). In other words, the Hispanic market continues its healthy expansion, but the proportion of money advertisers devote to the market overall has not kept pace.
"To come to a reasonable mar-keting approach, it's necessary to look at the use of language and its impact on Hispanic consumers," write Mr. and Ms. Korzenny. "For the marketer, staying close to the reality of U.S. Hispanic consumers is key to marketing decisions, with the understanding that both Hispanic cultural identities and the languages associated with them are in flux."
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