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2009Direct Selling AssociationCommunications & Internet Marketing Seminar
Engaging Hispanics Online
Jose VillaPresident, Sensis
www.sensisagency.com
Presentation Overview
• An Overview of the U.S. Hispanic Market• The Hispanic Digital Market Opportunity• Understanding the Engagement Model• Why Engagement Makes Sense for Hispanics• Engaging Hispanics – An Tactical Overview
1/27/2010 Engaging Hispanics Online: A Preview 2
THE U.S. HISPANIC MARKET: AN OVERVIEW
Engaging Hispanics Online
Current U.S. Hispanic population trends
• 44.3 million Hispanics, 14.8% of total U.S. population of 299 million
• Between 2000 and 2006:• Hispanics accounted for one-half of the nation’s growth • Hispanic growth rate (24.3%) was more than three times the
growth rate of the total population (6.1%)
• 25% of the country’s children under age 5 are Hispanic
4Source: U.S. Census Bureau, Population Estimates July 1, 2000 to July 1, 2006
Total U.S. Hispanics at a glance
5
MARKET SIZE (1)
12.7 Million Hispanics Households
11% of the Total U.S.
INCOME & CONSUMER SPENDING (2)
HispanicDisposable HH Income
HispanicConsumerSpending
HispanicDisposable Income
$68,219 $845 Bil. $890 Bil.
Source: (1) 2009 Nielsen Universe Estimates; Hispanic TV Households by Language Strata, includes Speaks Only Spanish, Mostly Spanish, Spanish and English Equally, and Mostly English (based on Persons 2+); (2) Global Insight - 2007 Hispanic Market Monitor (income reflects average); (3) Geoscape AMD 2009 Series, Census 2000, 2009 Estimates, 2014 Projections
88% of Hispanics Speak Spanish at Home (1)
The Hispanic Population Is Expected to Grow 55% from 2000 – 2014, Accounting for 48% of the Total Population Growth!
43,303,0008,537,0004,551,000
13,928,00022,678,00018,670,000
15%21%18%20%17%15%
HispanicPopulation
% Hispanic of Total
Persons 2+Children 2-11Teens 12-17Adults 18-34Adults 18-49Adults 25-54
HispanicPopulation
% Hispanicof Total
13%16%17%
200020092014
35,238,50048,628,40054,780,900
Total U.S. Hispanics at a Glance
Source: (1) 2009 Nielsen Universe Estimates; Hispanic TV Households by Language Strata, includes Speaks Only Spanish, Mostly Spanish, Spanish and English Equally, and Mostly English (based on Persons 2+); (2) Global Insight - 2007 Hispanic Market Monitor (income reflects average); (3) Geoscape AMD 2009 Series, Census 2000, 2009 Estimates, 2014 Projections
POPULATION GROWTH (3)POPULATION DEMOGRAPHICS (1)
6
Hispanics are Young
• More than 1/3 of all U.S. Hispanics are 18 or younger (half are under 26)
• Hispanic youth represent 20% of the total U.S. teen population
• In 10 years, 62% of all teens will be Hispanic
One in Four People will be Hispanic by 2050
8
*Projected Population as of July 1
ProjectionsCensus
Source: U.S. Census Bureau, 1970, 1980, 1990, and 2000 Decennial Censuses; Population Projections, July 1, 2010 to July 1, 2050
1980 2000 2020* 2040*
% Hispanic of the total population in the U. S.
Percent Change in Population by Region: 2000-06
96
Spreading to other States
• Many immigrants are bypassing traditional gateway states in the Southwest, while many U.S.-born Hispanics have left states like California.
• Children of Latin American immigrants are helping offset a decline or slower growth in the school-age population in states such as Georgia and Iowa.
10
Hispanic Origin by Type
11
Type of origin Number Percent
Total 44,252,278 100.0
Mexican 28,339,354 64.0
Puerto Rican 3,987,947 9.0
Cuban 1,520,276 3.4
Dominican 1,217,225 2.8
Central American 3,372,090 7.6
South American 2,421,297 5.5
Other Hispanic 3,394,089 7.7
Source: U.S. Census Bureau, 2006 American Community Survey
THE HISPANIC DIGITAL MARKET OPPORTUNITY
Engaging Hispanics Online
The Opportunity
The U.S. Hispanic online market:
• 24.6 million consumers • Total purchasing power of $900 billion
1/27/2010 Engaging Hispanics Online: A Preview13
Critical Mass
More than half (54%) of U.S. Hispanics use the Internet
Source: Scarborough, The Power of the Hispanic Consumer Online 2009
Rapid online growth
• Internet access among Hispanics has been increasing at a faster rate (13% since 2004) than it has among total adults in the U.S.
Source: Scarborough, The Power of the Hispanic Consumer Online 2009
Looking Ahead: Continued Online Growth
1/27/2010 Engaging Hispanics Online: A Preview16
2005
2006
2007
2008
2009
2010
2011
2012
24.6
26.2
27.8
29.4
U.S. Hispanic Internet Users
2009 2010 2011 2012
Source: eMarketer, 2008
Young Hispanic Internet Usage
60% of 18-34 year old Hispanics are online
Source: Scarborough, The Power of the Hispanic Consumer Online 2009
Broadband is the norm in the Hispanic market
• 68% of Hispanic Internet Users have a broadband connection in their household.
Source: Scarborough, The Power of the Hispanic Consumer Online 2009
The Acculturation Factor
1/27/2010 Engaging Hispanics Online: A Preview19Source: AOL Hispanic CyberStudy, 2006
Acculturation and Web Activity
• The “acculturated” segments– Mostly Acculturated Hispanics
• Most active on the Web• Longest online history on average• Prefer English online experience but
will look at Hispanic content as well– And appreciates brands that make
the effort to reach out to him in Spanish
• Skew male with higher incomes and education
– Partially Acculturated Hispanics• The largest segment• Half are Spanish-dominant• One third bilingual• Big social media users1/27/2010 Engaging Hispanics Online: A Preview20
Source: AOL Hispanic CyberStudy, 2006
Demographics
Hispanic Internet Users present a highly desirable but often elusive demographic profile
they are younger and have higher household incomes and education levels than the average Hispanic.
Source: Scarborough, The Power of the Hispanic Consumer Online 2009
E-Commerce
• U.S. Hispanics are early technology adopters and heavy users of consumer electronics– 11% of all e-shopping is done by Hispanics– Hispanic shoppers will spend $12.8 billion on e-commerce this
year
• 63% of online Hispanics purchase via the Internet, and spend an average of $100/month online
• U.S. Hispanics are as likely as their general market counterparts to purchase products over the Internet
• 62% of Hispanics with Internet access research electronics online prior to purchase (vs. 59% of general market)
1/27/2010 Engaging Hispanics Online: A Preview22Sources: Marketing Vox, 2008; ElectronicRetailMag.com, 2008
Obstacles to E-commerce
• Hispanics tend to prefer different payment methods other than using a credit or a debit card
• Demand for a cash-based payment option
1/27/2010 Engaging Hispanics Online: A Preview23
Internet Usage Influences Purchasing Decisions
51%
59%
63%
56%
61%
59%
63%
70%
74%
63%
69%
64%
68%
72%
72%
70%
75%
77%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Make Final Decision onBrand to Buy
Compare Prices
Learn Where Item isAvailable
Get Advice on WhichBrands to Buy
Learn About Features %Benefits of Specific Brands
Learn About AvailableBrands of Products
2004 2005 2006
Hispanics who use the internet are increasingly relying on it to make purchasing decisions
Source: 2006 AOL Hispanic CyberStudy
Hispanics and Mobile
• The mobile device is an important point of Internet entry for Hispanics– Hispanics are avid cellular
phone users. – They are more likely than the
typical adult to have a cell phone
– they are in the top spending brackets for cellular usage.
– They are also more likely to use cell phones for email or utilizing other Internet features.
Source: Scarborough, The Power of the Hispanic Consumer Online 2009
Hispanics and Social Media
• Hispanics spend more time on social media sites than their general market counterparts
Source: Felipe Korzenny, FSU, 2009
Why are Hispanics more Active on Social Media
• It isn’t only because they’re younger
• Main drivers:– Collectivistic value– Communication– Lack of relevant online content
Source: Felipe Korzenny, FSU, 2009
Opportunities
• Hispanics rely heavily on word-of-mouth for recommendations
• Hispanics feel more comfortable with one-on-one sales/customer service interactions
1/27/2010 Engaging Hispanics Online: A Preview28
THE ENGAGEMENT MODELEngaging Hispanics Online
A new marketing metric?
Traditional marketing funnel is becoming irrelevant because marketers no longer dictate the path people take,
nor do they lead the dialogue
The defunct funnel
The traditional purchase funnel is becoming defunct
The impact of traditional brand communications at the outset of the consumer purchase journey is decreasing
Source: OPEN Brand, 2007
Introducing the… fish
The funnel is becoming a fish
Prevalence and impact of consumer-driven activities, especially online, are changing the shape of the consumer journey
Source: OPEN Brand, 2007
Why a new metric?
• Complexity in the middle of the funnel– Rapid rise in word of mouth– Linear funnel is irrelevant
• The most valuable customer isn’t always the one that buys a lot
• Traditional media is weakening– Diminished trust in traditional media– Fragmentation of media (channels & consumption)
• Consumers force brand transparency– Social media proliferation– UGC– Networked customer
• Marketing complexity means that traditional metrics fail to capture the whole story
Engagement
Engagement =
the level of involvement, interaction, intimacy, and influence a customer has for or with a
brand over time
1/27/2010Source: Forrester Research, 2007
Elements of Engagement
• Engagement goes beyond reach and frequency to measure people’s real feelings about brands.
• It starts with their own brand relationship, and continues as they extend that relationship to other customers.
Four-Step Engagement Model
1/27/2010 36Source: Forrester Research, 2007
4 “I’s”
• Involvement - tracks site visitors, time spent, page views etc
• Interaction - measures the contributions to blogs, photo and video creation and uploads, transactions or other activations, etc
• Intimacy - tries to understand consumer attitudes, perception, and feelings about a brand through surveys or monitoring technology
• Influence - measures the likelihood that consumers will recommend or advocate products or brands1/27/2010 37
Source: Forrester Research, 2007
Involvement
• Reflects measurable aspects of an individual’s relationship with a company or brand.
• Includes actions like:– Clicks on an ad or calls to 1-800 #– like visits to a site or a physical store– time spent per page– pages viewed
Represents the first point of interaction an individual has with a brand and is the foundation for making the connections to other metrics
Interaction
• Interaction measures actions, activations, or events in which consumers:– request additional information– contribute content about a brand– provide contact information– purchase a product or service (often as a trial)
• These include– completed transactions– blog comments– social network connections– uploaded photos and videos
• Social media contributions increasingly play a role in calculating the value of a customer and are vital to tracking emerging behaviors.
Intimacy
• Intimacy measures the affection or sentiment an individual holds for a brand
• Intimacy includes consumers:– Opinion– Perspective – Passion
• Qualitative measure represented by the words consumers uses and the content they create– Intimacy is the critical new component that sheds light on
customer’s feelings about your brand (positive or negative
• Can be tracked in real time, providing ample opportunity to correct
Influence
• Influence measures an individual’s likelihood to encourage a fellow customer to consider or buy a brand, product, or service. – Understanding Influence is critical to building a forward-looking profile
of customers
• Qualitative measure that includes:– brand awareness– Loyalty– possibility of purchasing again– Net Promoter (NP) score
• You can measure influence through– opt-in surveys– Mailed questionnaires– customer service calls – phone surveys
Engagement means marketers must…
develop content that is immersive, participatory, and relevant in order to earn a place in the social web and consumer conversations
Engaging Experience Attributes
• Participation• Belonging• Immersion• Entertainment• Inspiration• Emotionally involving content and interactivity• Content is timely, topical and available• Brand message and media are worthy of sharing or
passing along
How to achieve engagement
• Interactivity is key to deepening consumers’ emotion connection with a brand
• Open brands must provide meaningful and engrossing experiences that foster consumer relationship online – and off
WHY ENGAGEMENT MAKES SENSE FOR HISPANICS
Engaging Hispanics Online
Hispanics have Larger Social Networks
• The average Hispanic household has 3.1 people while the average non- Hispanic household has 2.3 people.– Hispanics HH have 35% more people than non-Hispanic HH
• Hispanics have larger extended families / broader definition of kin– Concept of “family” extends beyond nuclear family to aunts,
uncles, cousins– Neighbors, second-cousins, God parents,
“comadres”/”compadres” are part of Hispanic extended families
• Mexican Americans tend to be very familistic in attitudes and behaviors, using kin for social and emotional support (Mindel, 1980)
• Once in the U.S., most Hispanic immigrants live in densely Latino communities.
Source: 2007/2008 Nielsen and Simmons Market Research Bureau Source: Center for Reproductive Health Research and Policy, Department ofObstetrics, Gynecology and Reproductive Sciences / The Institute for Health Policy Studies, UCSF
Hispanics have Organic Social Networks
• Latinos were social and talked to each other when “tweeting” was something only birds did
what else do you call vecinos, hermanos and parientes?
• social media is second nature to Hispanics
Hispanics over-index on social media usage
• They spend more time on social networks than all other groups
Source: Felipe Korzenny, FSU, 2009
The Network Effect and Social Media
• Social networking sites are prime examples of the network effect – the more people register onto a social
networking Web site, the more useful the web site is to its registrants
• Since social media functions well as a low-cost communications tool, it has enjoyed a direct network effect with Hispanics– e.g. When an initial group of Hispanic begin
using Facebook, the fact that they have larger “offline” social networks drives exponential growth along these pre-existing networks.
Powerful Hispanic “network” effect
• Larger “organic” or offline Hispanic social networks results in a larger Hispanic network effect on social media platforms– When a Hispanic mom comments on a new product
on Facebook, it will be read by a larger group or network of familia, amigas, and comadres
Hispanic “Influentials”
• There exists within the Hispanic community a group of people who– Are promoters of brands– Possess an unusually high knowledge of certain
product / service categories– Have high social influence – Are effective communicators:– Enjoy new things and have a propensity to trial new
products & services– Have social networks 3-6 times larger than the general
Hispanic population
Source: Cayenne Global, 2009
Hispanic e-fluentials
• Influential Hispanic online consumers (”e-fluentials”) use the Internet to not only connect with friends and family but also share views about products and brands - in higher proportions than other e-fluentials– spend more time interacting with others online (30
hrs/week) compared with general-market e-fluentials (25 hr/week)
– Have more offline interaction in face-to-face conversations - 30 hours vs. 21 hours.
– Communicate in person, on the phone, or online with more family members, friends and coworkers each day - 58 people vs. 45. • Among female Hispanic-fluentials, the number
jumps to 68.
Source: Burson-Marstellar, E-fluentials Study, April 2008
Hispanic e-fluentials Behavior
• How they are more influential online:– Some 66% of Hispanic-fluentials forward product
recommendations by email, compared with just 28 percent of general-market e-fluentials
– About half (49 percent) of Hispanic-fluentials use blogs to tell others about product experiences; 39 percent of general e-fluentials do so.
– 84 percent are eager to warn others about problems with products and services (72 percent of general-market e-fluentials do so)
Source: Burson-Marstellar, E-fluentials Study, April 2008
HOW TO ENGAGE HISPANICSEngaging Hispanics Online
A Typical Problem for Hispanic Marketers
• A company, with an established presence in the U.S., has decided that they want to pursue the Hispanic market – a consumer market they had previously ignored
• U.S. Hispanics are generally unfamiliar with their brand and/or products and services but open to using them.
• They now need a Hispanic marketing consultant or agency to help them enter the Hispanic market.
The Bigger Problem
• After doing some research to understand everything about the Hispanic market vis-à-vis this company’s products or services, They arrive back at where they started:
– Hispanics are generally unfamiliar with the products or services because they did not use them in their home country
– No member of their large social network (family, friends) has recommended the product
The Hispanic “Vicious Cycle”
• The brand/product/service is in the conundrum of the “Hispanic vicious cycle.”
• Hispanics would be willing to try the product if recommended or used by a family member or friend,
• The fact that their family and friends are also unfamiliar with the product means that they will just continue to never purchase it.
Reversing vicious cycle into fortuitous cycle
• Breaking this vicious cycle can be difficult, but the results can turn the tide and result in a fortuitous cycle
• The Hispanic “Fortuitous” cycle– product usage by a small group of Hispanics is
amplified by word of mouth recommendations and advice
– results in a multiplier effect and potentially rapid growth in the market.
Turning the Tide
• So how does a marketer help their clients break the “Hispanic vicious cycle” and convert it into a positive fortuitous cycle?
Two-Part Approach: Trial + WOM
• Use the engagement model, applied as a two-part marketing and communications strategy that simultaneously emphasizes trial with word of mouth (“WOM”) activity.
• there are some general guidelines that can be used as an effective framework.
Involvement Interaction Intimacy Influence
Driving Trial Activity
• Numerous potential tactics:– online coupons– street-level hand-outs– direct mail – in-store trials
• The goal is to generate involvement that leads to Interaction
• More important than the vehicle for delivering the trial is providing a culturally relevant context in which to try to the product.
Involvement Interaction Intimacy Influence
Trial: Context is Key
• The context of the trial activation will have to be adjusted to cultural tendencies of the Hispanic market.
• This context will involve everything from the messaging on the trial materials, to whom, and when and where the trial is offered.
Involvement Interaction Intimacy Influence
Building a Word of Mouth (WOM) Campaign
• Simultaneously, to flip the Hispanic vicious cycle into a fortuitous cycle, an effective word of mouth strategy needs to be developed and executed.
• Effective WOM marketing starts with sparking conversations (or “Intimacy” and “Influence”)– Not simply driving awareness or even trial
• Getting people to talk about a brand, product or service.
Involvement Interaction Intimacy Influence
WOM: Start with Insights
• Identify the key insights that will get Hispanics to talk about the product
– uncover strategic insights that contribute to the idea – the sound, motivating, and relevant thought to be communicated
Involvement Interaction Intimacy Influence
WOM: Start with Insights
• Identify the key insights that will get Hispanics to talk about the product
– uncover strategic insights that contribute to the idea – the sound, motivating, and relevant thought to be communicated
• Insights will drive the messaging, but what and who will generate that spark – – The spark starts the real, invaluable conversation and fortuitous
cycle of Hispanic WOM activity
Involvement Interaction Intimacy Influence
WOM: Finding Influencers
• The “who” that is critical to igniting conversations are Hispanic Influencers
• People who:– have high social influence and are effective communicators– enjoy new things and have a propensity to trial new products– have social networks 3-6 times larger than the overall Hispanic
population
• Hispanic e-fluentials– Use research to create demographic profiles of them– Focus on “seeding” conversations with them
• But how do we reach them?
Involvement Interaction Intimacy Influence
WOM: Generating the Spark
• The best ways to spark conversations is with digital media, social media and experiential programs– Traditional, broad reach media should support (when
possible) in an “air cover” role
Involvement Interaction Intimacy Influence
WOM: Generating the Spark with Digital Media
• With Digital media we can target consumers with the type of precision that is necessary to pinpoint and reach Hispanic Influencers.– Think Hispanic e-fluentials
Involvement Interaction Intimacy Influence
WOM: Generating the Spark with Social Media
Social media tactics and programs allow Influencers, and then other consumers, to virally spread information at the click of a “POST.”
Involvement Interaction Intimacy Influence
WOM: Generating the Spark with Experiential Marketing
Experiential marketing provides the opportunity for one-to-one interaction with Influencers and closes the gap on technology usage.
Involvement Interaction Intimacy Influence
What the Fortuitous Cycle Looks Like
Trial• Proper Context• coupons• Free samples
(in-store / direct mail)
Word of Mouth• Insight drives
messaging
Word of Mouth• Identify
Influencers
Word of Mouth• The Spark• Digital Media• Social Media• Experiential
Using Engagement Model to Measure Success
Measure everything against 4 I’s
Trial• Involvement• Interactions
Word of Mouth – “Spark”• Intimacy
Word of Mouth – “Influencers”• Influence
IN SUMMARYEngaging Hispanics Online
Why is Engagement Relevant to Direct Sellers?
• You live and die off of the “network effect”
• Your business is unique in that your communications need to simultaneously recruit, build brand, and drive sales– Engagement model works well for
• For those of you without well known brands in Latin America, the approach I’ve outlined will undoubtedly generate the most “bang for the buck” and address major trust and familiarity obstacles
• The U.S. Hispanic market is an ideal market for engagement model, and you have a huge opportunity to take advantage– Most big U.S. brands are just coming around to this approach, so
you can compete and win now!
Summary
• The Engagement represents a fundamentally different approach in marketing that places equal (and sometimes more) emphasis on dialogue and advocacy and transactions/activations
• Measuring engagement is a new and evolving science– Combines established / commonly tracked metrics with
new ones
Q&A
Thank You
Jose Villa
Email: [email protected]
Twitter: @jrvilla
Blog: www.ThinkMulticultural.com
LinkedIn: www.linkedin.com/in/josevilla