Managing Communications across a Pan-Latin Hemisphere
By Mike Valdés-Fauli, President of JeffreyGroup
There is significant interest and excitement about the Latin hemisphere these days. Countries like Brazil and Mexico have grown quickly in recent years, and the U.S. Hispanic market represented over 50% of total population growth in the United States over the past 10 years. However, the staggering figures often overshadow some interesting facts that too often go overlooked.
All Eyes Are On Latin America
Although you’ve probably heard that Latin America is home to more than 500 million people, the population that most companies want to reach is very concentrated. Of those 500 million, 200 million are located in Brazil, which has been one of the world’s fastest-growing economies for the past four years. Another 100 million are in Mexico – where the projected economic growth rate is now exceeding Brazil’s – and another 40 million in Argentina. So those three countries comprise about 70 percent of the total population of the region. They’re also home to the largest percentage of middle‐class consumers. Although there are other stable, high‐growth markets – such as Chile, Colombia and Peru – a huge disparity still exists between the rich and the poor in many Latin American countries and sometimes the smaller markets do not represent a significant amount of revenue or investment opportunities for large multinationals.
That’s why it usually makes the most sense for companies wanting to build their brands and capitalize on the region’s opportunities to focus on increasing visibility and awareness in the markets where it will make the most impact. It’s also important to take into account the huge cross‐border flow of news, information and content, particularly in all of the Spanish‐speaking countries. People watch much of the same television programming, hear the same information, and go to the same online sites, regardless of which country they happen to be in – which even includes the U.S. where much of the Spanish‐language programming is the same as it is in Mexico.
Mexico: The Gateway to Latin America
Over the last decade, Mexico has experienced a remarkable evolution in marketing, corporate communications and public relations. In this increasingly democratic and competitive environment, consumers, the news media and the government expect not only full proficiency in communication programs but creativity and absolute transparency from the business community.
In addition to being the largest Spanish-speaking country in the world, Mexico is the most important gateway to Latin America. Companies and brands seek to win the Mexican consumer not only for the local value, but also because of impact on their reputation in the region.
When thinking about starting a communications campaign in Mexico, one of the most important things to consider is the reach and power that the Mexican media have – not only in the country and Latin America, but in the U.S. and Spain as well. The most important TV and radio networks reach more than 400 million Spanish speakers around the world. Very frequently, brands devote more of their communications and PR spending to Mexico knowing that the placement of their key messages will be instantly noticeable on regional measurement.
Given the geographical proximity with the U.S. and the relationships that tie the two countries together, the influence from the U.S. to Mexico in terms of consumer trends has historically been very important. Now, we see a major shift in the opposite direction, placing Mexico at the core of the trends being transferred to the U.S. Hispanic market.
Brazil: The Marketing Jewel of Latin America
Brazil is the world’s fifth-largest country with 200 million people located in an area of more than 3.2 million square miles. It also bears repeating that Brazil will host the 2014 World Cup and 2016 Olympics. While the physical infrastructure may have a ways to go before the country is ready for the massive influx of visitors, the media and communications industries are well established and flourishing.
Television is the most important medium in Brazil, reaching 98 percent of the population. With 60 percent penetration, the newspaper industry is very regionalized and even the biggest titles do not have large audiences; however, their readers are mostly opinion leaders, increasing the impact and influence of these outlets.
Brazilian Internet users averaged 26 hours online per month in 2011, 10 percent more than the previous year, and Facebook’s rapid ascent in the Brazilian market is certainly an interesting signal within the digital media landscape. The site became the leader in the social networking category recently, with impressive growth both in visits and engagement.
Research and analysis firm eMarketer recently reported that in 2012 Facebook reached 41 million monthly users in Brazil. Time spent online is also growing: The average visitor spent 4.8 hours per month on the site, surging from just 37 minutes in 2010.
Experience in Latin America Translates to U.S. Hispanic Marketing Success
For marketers and communicators, the Hispanic market is the most exciting opportunity to arrive in decades. It is currently the country’s largest minority group, with 51 million people comprising 16 percent of the total population. If it were a country, U.S. Hispanics would represent the second-largest Spanish-speaking nation in the world. Conservative estimates put the percentage of total population at 20 percent by 2025 and 25 percent before 2050. This trend has steadily and aggressively defied expectations and delivered enormous year-on-year growth in a variety of sectors.
As Hispanic consumers in the U.S. acculturate they become less brand loyal, yet they are still 32 percent more brand loyal than the general market. It is therefore advisable for companies to target consumers who have brand loyalty more ingrained in them from experiences in their country of origin.
Despite the fact that Hispanics currently make up nearly 16 percent of the total population, Hispanic-focused advertising only comprises 6 percent of the total national spend. There is tremendous room for growth in the advertising sector. Fortunately, marketers have more places to spend their Hispanic marketing budgets these days. In the last two years, Fox Networks launched three new Spanish-language cable channels, a new broadcast network and numerous Hispanic focused news and entertainment websites. Market leader Univision and ABC announced a new Hispanic-focused network in English that will launch in 2013.
One final takeaway is that marketing to U.S. Hispanics is not all about language, but rather the cultural connections. Consumer behavior and purchasing decisions can be driven through insights about the culture that impact a community. And it takes an expert with deep experience in Latin American countries and cultures to fully understand what’s happening in the United States now and into the future.
The Latin hemisphere is an exciting place to be doing business. It thrived during the global economic crisis and is more mature than other risky growth markets across the globe. Now’s the time to get to know your southern neighbors, if you don’t already. Chances are, they are eager to begin a conversation!