The year was 2008, and I was invited to meet a few music industry executives from one of the top record labels. They were talking to a few marketing executives about an open leadership position at their organization and were looking for people without specific entertainment or music experience. The “state of the business” introduction was not very positive: revenues and profits were down for several years in a row, and they were very concerned with the disruption their industry was facing, challenged mainly by new models led by online music offers.
I remember listening attentively to their description of the challenging times they were facing; they were showing me tables and graphs to illustrate their point and, after probably 30 minutes of a string of bad news, they asked for my opinion and I said: “I know things look pretty bad right now, but I suggest looking at this from a glass half full type of situation. Despite the fact that your whole business model is under attack, some things are not changing: people still love music, they are still willing to pay for it, and this love will help the industry to reinvent itself and find a new balance.”
Today, while things are not (yet) back to the way they were before, the music industry hasn’t disappeared as some predicted. In 2017, U.S. music consumption grew 13% vs. 2016, marking the third consecutive year of growth after 15 years of decline, and while the industry is still below the peak level of 1999, last year’s growth rate represented the highest annual growth rate since 1919!
Today, Hispanic ad agencies face a similar situation, compounding an already challenging broader ad industry landscape. Similar to what I thought back in 2008, I refuse to give into the pessimistic perspective that sometimes feels inevitably contagious, I still carry with me an optimistic view of our industry’s future for three important reasons:
- The demographic trajectory of our country won’t change in the years to come.
- In this cluttered environment, brands need to find a relevant voice to stand out and grow their business more than ever.
- There are more research and ROI analysis affirming the effectiveness of Hispanic Marketing than ever before.
Hispanic population in the U.S. today stands at approximately 61 Million strong, representing almost 19% of the country’s entire population. Furthermore, the projection shows this population will continue to increase at a faster rate than non-Hispanic whites, making the absolute and relative number of Hispanics even larger in the years to come.
Besides, there are additional reasons to be optimistic about the segment. For the past decade, Hispanics have been graduating from high school and have been enrolling more in college at record levels – progress that is reflected in their household income. The bottom line is that Hispanics are growing in number and influence and spending power more, representing a large share of corporations’ current and future growth.
Moreover, Hispanics tend to stay connected to their culture. Just recently, the Pew Hispanic Center released a study showing that the overwhelmingly that first- and second-generation Hispanics are connected to their Hispanic culture, and that almost 80% of third-generation, along with the majority of fourth-generation Hispanics, also have a strong connection to their heritage. These results demonstrate that the relevancy of the Hispanic culture is strong and will remain even stronger for decades to come, despite perceived acculturation.
I recently attended an industry event where Tony Rogers, Walmart’s CMO, the company seen as the inventor of “Total Market” – an approach that has been used as an excuse to justify a “one size fits all” strategy by companies looking mostly to increase efficiencies at the expense of effectiveness – said that he was misquoted, misunderstood, and that he never intended to eliminate or even reduce investments in Hispanic marketing. As a matter of fact, he announced that he was, once again creating the position of multicultural marketing leader at his organization.
To my knowledge, this was the fourth major U.S. advertiser in the past 6 months that decided to reinvigorate their multicultural or Hispanic efforts, like Pepsi for instance.
Brands are starving for growth and, after years of trying the same formula based on reaching Hispanics via English media (instead of truly connecting with Hispanics) with one size fits all strategies and creative development (sometimes managed by General Market agencies that hired a few “Latinos” for their teams), maybe the time has come to recognize the failure of a model that denied CMOs of their most important role – to help their brands grow again.
It’s time to claim the end of the Total Market approach as we know it and bring Hispanic marketing plans back to the 21st century. It’s time to celebrate, once again, the Hispanic segment opportunity It’s time to use the power of marketing and advertising to grow businesses again. In today’s environment that growth should be music to CMO’s ears!