Advertisers Underspending on the Hispanic Market
Have you evaluated your Hispanic advertising spend lately? As we approach the biggest shopping period of the year and the corporate cycle when most ad dollars are planned for the coming year, we know that this key group of shoppers is being drastically underweighed in advertising spend by U.S. advertisers.
In 2018 U.S. Hispanic ad spend was $9.4 billion, according to Ad Age. That is only 6% of the total ad spend of $151 billion! The Hispanic population just reached 64 million people this year making it the second-largest demographic group in the U.S. or 19.5% of the total population. With that in mind, U.S. Hispanic ad spending should be in the $20 billion range.
This statistic as well as spending habits was featured in The Hispanic American Market Report by Claritas. This report highlights that Hispanic households will outspend non-Hispanic white households during their lifetime by over $538,000.
According to Simmons 2018 State of the Hispanic-American Consumer report, Hispanic households account for 10% of all discretionary spending in the United States, with annual expenditures of $215.5 billion on non-essentials in 2018, up from $163.4 billion in 2013. A key category of interest where Hispanics overspend is apparel, especially men/boys, children and shoes.
It’s interesting to note that discretionary spending by Hispanic households grew 12% in the past year while spending among non-Hispanic households grew less, at only 2%. And Hispanics are young. As of 2019, Hispanics aged 6 to 34 represent 25% of all U.S. consumers. The younger end of that range is forming its brand loyalty while the older portion has rising incomes and the potential for increased spending.
There are other key shopping behaviors marketers should note from MRI Simmons 2019:
- Hispanic shoppers are motivated by online ads at a 21% greater rate than non-Hispanics.
- Hispanic shoppers are motivated by video monitor displays at a 91% greater rate.
- Hispanics shoppers are motivated by shopping cart ads at a 76% greater rate.
- Hispanics over-index on mall trips with four or more trips in the past four weeks, or at a 63% greater rate.
Added to these shopping stats are clothing purchase data from Latin Post showing that Hispanics adopt trends sooner than non-Hispanics (43% vs. 34%) and they buy new clothing at the beginning of a season (27% vs. 19%). This demonstrates a willingness to pay for fresh and newly released apparel now instead of waiting months for it to go on sale.
Based on this conflagration of information, the Hispanic market is the perfect fit for marketers seeking younger consumers, with rising incomes, a high lifetime value, and rising spending levels. This demographic is motivated by advertising, buys the latest fashion trends, and likes to shop at the mall. It makes one wonder why more isn’t being spent on this market considering the potential results with a little more of an advertising spend.