The U.S. Hispanic market has evolved into one of the most significant and dynamic consumer segments for American businesses. With over 63.5 million Hispanics comprising 19.1% of the U.S. population, the demographic is both large and influential. Beyond sheer numbers, the unique cultural values, preferences, and trends within this group offer businesses immense growth potential. ThinkNow's "Hispanic Market Today" report explores how the Hispanic community is reshaping the demographic landscape and creating new opportunities for companies across industries.

Download the report here.

A Young and Growing Population

One of the defining characteristics of the Hispanic population is its youth. The median age of Hispanics in the U.S. is 30, considerably younger than the 44.5 median age of the non-Hispanic white population. This makes them one of the youngest ethnic groups in the U.S. and positions them as a critical audience for brands targeting long-term consumer loyalty.

In addition to its youthfulness, the Hispanic population is growing at an extraordinary rate. Approximately one million Hispanics are added to the population annually, driven by both immigration and higher-than-average birth rates. In contrast, the non-Hispanic white population is shrinking by around 500,000 individuals each year. As the white population declines, businesses must pivot toward multicultural audiences like the Hispanic market, which represents nearly one-fifth of the U.S. population and is growing.

Rising Economic Influence

The substantial size of the Hispanic population in the U.S. correlates with its growing economic influence. In 2024, Hispanic buying power is expected to reach $2.3 trillion, up from $1.95 trillion in 2020. By 2026, this figure is projected to grow to $2.76 trillion, accounting for 12.1% of total U.S. buying power. Hispanic spending growth is outpacing the U.S. market, with an annual growth rate of 8.6% compared to the national average of 5.5%.

This increasing economic clout presents a wealth of opportunities for businesses looking to tap into a consumer base that is larger than the entire Canadian economy. Hispanic consumers are highly optimistic about their financial future, with nearly half expecting their financial situation to improve in the coming year. This optimism translates into greater consumer confidence, driving demand across various sectors, including housing, education, technology, and entertainment.

Cultural Values Influence Identity     

To successfully engage Hispanic consumers, businesses must understand the cultural drivers influencing their behavior. Family, community, and education are deeply rooted values that guide decision-making for many Hispanics. For instance, the emphasis on family unity can be seen in larger household sizes—an average of 3.8 people per Hispanic household, compared to the U.S. average of 3.2.

Education is another key value that resonates with Hispanic consumers. Although only 18.8% of Hispanics hold a college degree, pursuing education is highly prioritized. For marketers, messaging around educational opportunities and products that support learning and personal development can resonate deeply with this audience.

A blend of traditional values and contemporary aspirations also influences Hispanic identity. The report highlights that Hispanic Millennials, particularly, embrace themes commonly associated with American pop culture, such as freedom and equality. This generation is more likely to value the ability to pursue their dreams and believe they have control over their futures, reflecting a strong alignment with broader American values while maintaining a distinct cultural identity.

Language and Biculturalism in the Hispanic Market

Language plays a central role in shaping the Hispanic identity in the U.S. While 75% of Hispanics report being able to hold conversations in Spanish, 84% are also fluent in English. This bilingualism within the Hispanic market reflects the unique bicultural experience of many Hispanics, who seamlessly navigate between two cultural worlds. Many identify more with their country of origin (e.g., Cuban, Mexican) when interacting with other Hispanics rather than broad terms like Hispanic or Latino.

For marketers, this biculturalism presents both challenges and opportunities. Brands that can authentically communicate in English and Spanish while respecting the cultural nuances of the Hispanic community are more likely to be viewed favorably. Catering to both Spanish-dominant and English-dominant consumers will help businesses capture the diverse segments within this market.

The Future of Multicultural Marketing

As the U.S. population becomes more multicultural, businesses should be adjusting their strategies to reflect this new reality. ThinkNow’s report reveals that 41% of the U.S. population is now multicultural, and among those under age 20, this figure jumps to 50%. Hispanics make up a significant portion of this younger, diverse population.

This demographic shift is leading to increased investment in multicultural marketing. Two-thirds of companies plan to maintain or increase their multicultural marketing budgets in 2024, with 40% of those increasing their spend citing the economic power of multicultural consumers as a key factor. While the Hispanic market has historically been a priority for marketers, many companies are expanding their focus to include other multicultural segments, such as African Americans and Asian Americans.

The report also notes that 1 in 4 marketers have changed their approach to multicultural marketing in response to shifting demographics, revised advertising campaigns, and updates to diversity, equity, and inclusion (DEI) initiatives. As the Hispanic community grows in size and influence, businesses prioritizing culturally relevant marketing strategies will be better positioned to connect with this important audience.

Conclusion

The Hispanic market in the U.S. is not only large and growing but also increasingly influential in shaping the U.S. economic and cultural landscape. Businesses must invest in the knowledge to understand this demographic in order to tap into the market’s potential. By investing in multicultural insights, marketers can create culturally resonant strategies that help companies build lasting relationships with Hispanic consumers and thrive in an increasingly diverse marketplace.

Download the report here.

In this episode of The New Mainstream podcast, Mario Carrasco and Michael Roca, who currently spearheads the Cross-Cultural Center of Excellence at Omnicom Media Group, delve into the evolving landscape of multicultural marketing and media.

Multicultural has shifted from a niche segment to a central focus for many brands and agencies. This change reflects a growing recognition that diverse audiences are not just a part of the market but key drivers of growth and innovation. Understanding and engaging with these audiences can lead to more effective marketing strategies and expand market share.

Historically, companies housed multicultural marketing expertise in separate units. Over time, these teams were often folded into Total Market efforts. Doing so, however, diluted the specific focus needed to genuinely connect with diverse audiences.

As the U.S. moves towards becoming a multicultural majority, a nuanced understanding of the complex and multifaceted identities of diverse audiences becomes critical. However, many sectors underinvest in multicultural marketing and media despite the clear benefits. Brands must move beyond analysis paralysis and take actionable steps toward inclusivity. By incorporating these perspectives from the beginning, brands can create more authentic and impactful connections.

Tune in to the full episode of The New Mainstream podcast to gain valuable insights into the future of multicultural marketing and media.

Today's consumers are confidently embracing their authentic identities, and forward-thinking brands are following suit. Inclusive beauty giants like Ulta Beauty proudly defy gender norms, while others prominently feature same-sex couples and individuals with disabilities and promote body positivity in their advertising campaigns. On the flip side, some brands are succumbing to the fear of appearing overly “woke.” The increasing backlash against diversity, equity and inclusion has prompted a few to backtrack on commitments made during the peak of social unrest in 2020, leaving consumers feeling angered and confused.

Multicultural consumers, who represent almost 100% of the population growth in the U.S. and are on track to become the majority by 2050, seek genuine connections with brands. Central to this is a brand's ability to authentically understand its audience and allow that authenticity to drive consumer engagement.

Brands that bridge cultural divides are the ones that thrive. By genuinely connecting cross-culturally, companies seamlessly align DEI with their bottom line. Inclusivity isn't optional – it's the fuel for long-term success. From diverse workforces to inclusive marketing campaigns, a focus on inclusion strengthens every aspect of a brand.

Understanding multicultural consumers means appreciating their commitment to holistic well-being. Black women prioritize mental health, while Gen Z seeks a shift from the “grind” to self-care and mindful living. Brands that tap into these trends resonate with a broader audience.

In this episode of The New Mainstream podcast, Will Campbell, Co-founder and CEO of Quantasy, shares his perspective on the state of multicultural marketing and how young, diverse generations are driving wellness trends.

The past year has been a roller coaster ride for multicultural marketing practitioners. From the recent Supreme Court ruling on affirmative action to increased scrutiny of diversity, equity and inclusion (DEI) initiatives, companies are carefully assessing how these factors will impact their multicultural marketing budgets. ThinkNow shares this curiosity and has recently surveyed corporate decision-makers in multicultural marketing and multicultural consumer research, aiming to understand how they are strategically navigating the current landscape.

Download the report here.

The short answer? Budgets are increasing.

Multicultural marketing budgets are on the rise. Two-thirds of respondents plan to maintain or increase their multicultural marketing budgets in 2024. The driving force? Opportunity. Recognizing the economic power of diverse consumers and demographic shifts, companies see multicultural marketing as a key growth strategy.

Among the reasons cited by the 31% of respondents who plan to increase their budgets are identifying new business opportunities, acknowledging cultural influence on their business, and a desire to better represent and impact diverse audiences.

• “Audience business opportunity, cultural influence, growing audience representation and impact.”
• “More budget available to multicultural marketing. Hispanic has historically been a priority. We're on the journey to increase focus with African-American and other cohorts.”
• “Growing diverse consumer impact on business and sales.”

Additionally, respondents highlighted the importance of staying ahead of cultural trends and consumer behaviors to remain relevant and effective in their marketing efforts. This includes understanding the nuances of different cultural identities and tailoring messaging and campaigns accordingly. Companies recognize that cultural relevance is not only a matter of inclusivity but also a strategic imperative for engaging and retaining diverse consumer segments.

Interestingly, nearly 40% of respondents intend to maintain their 2023 budgets, indicating a continued commitment to multicultural marketing. This demonstrates a continued recognition of the economic significance of multicultural consumers and the importance of targeting this segment effectively.

Challenges and Cautiousness

However, amidst the optimism surrounding budget increases, there are challenges and instances of caution. Eighteen percent of multicultural marketing decision-makers plan to decrease budgets, citing general cost-cutting measures and clients shifting towards broader "general population" strategies. Among the reasons given by the minority who stated they’re reducing their budgets were:

• “Budget cuts across multicultural marketing efforts and an increased desire from clients to hit 'wider' audiences; e.g., Gen Pop.”
• “Less clients trying to target multicultural clients.”
• “Lower post-COVID budgets.”

Moreover, there is a growing emphasis on accountability and measurement in multicultural marketing efforts. Companies are increasingly leveraging data and analytics to evaluate the effectiveness of their campaigns and ensure they are resonating with diverse audiences. This includes monitoring key performance indicators such as brand awareness, consumer engagement, and sales lift among multicultural segments.

Adapting Multicultural Marketing Strategies

Still, 1 in 4 companies are adapting their approach. The cost of “getting it wrong” has increased in recent years. No one wants to be in the position Budweiser was in after boycotts erupted in response to their partnership with a trans influencer. In response, some companies are taking a more cautious approach, while others are conducting more research before launching new campaigns.

Key Takeaways:

• Multicultural marketing remains a strategic priority for many companies.
• The economic power of diverse consumers is driving budget increases.
• Uncertainty and cost-cutting pressures are impacting some budgets.
• Companies are adapting their strategies to navigate the changing landscape.

What does this mean for the future? While challenges exist, the prevailing sentiment among many practitioners is that multicultural marketing represents a pivotal avenue for growth. Companies adept at strategically maneuvering through these changes and placing a premium on comprehending diverse consumer demographics will undoubtedly find themselves poised for success.

Multicultural marketing has emerged as a critical strategy for brands seeking to reach and engage a broader audience in today's interconnected, global marketplace. However, the days of generic, one-size-fits-all campaigns are long gone. Today's discerning consumers demand authenticity and cultural relevance, and it's up to brands to rise to the challenge and meet their needs.

Specificity promotes diversity and increases representation.

Specificity is the cornerstone of effective multicultural marketing. While targeting broader ethnic or cultural groups represents a step forward from the general market, it still fails to address the inherent diversity within these groups. Instead, brands must delve deeper, understanding the nuances, subcultures, and unique experiences that define each audience segment.

Latinx audiences, for instance, are often stereotyped as abuela-focused or reduced to Spanglish catchphrases in hastily translated general market ads. But these tired tropes do not account for the rich diversity, lived experiences and varied levels of acculturation within Latinx communities.

Consumers crave genuine representation and identify with advertising that mirrors how they see themselves and how they live. Whether it's language nuances, celebrating cultural traditions, or portraying diverse family structures, brands that avoid stereotypes will pull ahead.

Consumer scrutiny of DEI remains high.

The rise of multicultural marketing coincides with escalating calls for social justice, particularly in the wake of the murder of George Floyd in 2020. Since then, companies have woken up to the importance of diversity, equity and inclusion (DEI), creating executive-led initiatives to drive change within these organizations.

However, recent trends suggest that the corporate focus on DEI may be waning. Layoffs within DEI departments and pending lawsuits suggest a decline in DEI efforts, which could impact multicultural marketing strategies.

Despite the corporate ebb and flow, consumer scrutiny of diversity and inclusion efforts or the lack thereof remains steadfast. Consumers are increasingly aware of companies' DEI commitments and hold them accountable through their purchasing decisions.

A recent ThinkNow study found that 72% of consumers are more likely to purchase from brands that demonstrate genuine commitment to diversity and inclusion. This sentiment is echoed across all demographics, including multicultural consumers.

Multicultural Marketing and DEI have a symbiotic relationship.

Effective multicultural marketing is inextricably linked to a deeply ingrained culture of DEI within an organization. When DEI is embedded in the corporate DNA, it fosters a culture of empathy, respect, and inclusivity, empowering the people behind the brands to create authentic and culturally relevant marketing campaigns that, in turn, reinforce DEI efforts.

The future of marketing is multicultural.

As the election cycle heats up, issues of race and ethnicity are poised to dominate public discourse. Now more than ever, companies need to demonstrate their commitment to DEI.

The future of marketing is undoubtedly diverse. By fostering empathy, understanding, and respect for these audiences, brands will forge stronger bonds, drive growth, and emerge as leaders in multicultural marketing.

Multicultural consumers, accounting for over 120 million people or 38% of the total population and more than $3 trillion in buying power, are a growing and vital segment of the U.S. population.

Given their significant cultural and economic impact on the market, multicultural consumers are more likely to be concerned about their privacy than White consumers due, in part, to several factors, like discrimination, language barriers, and lack of awareness of consumer rights.

Therefore, it is crucial for businesses collecting and using zero-party data from multicultural consumers to have a robust data governance process that demonstrates a commitment to protecting consumer privacy and using data responsibly.

Data Risk Factors for Multicultural Consumers

Here are a few specific data risk factors that highlight the importance of data governance for multicultural consumers:

• Multicultural consumers may be more likely to be targeted by fraud. Fraudsters may assume they are less familiar with the English language and societal norms, making them vulnerable or less likely to report fraud because of fear and other external threats.
• Technology use among multicultural consumers is on par or slightly higher than White consumers, which makes them more likely to be impacted by data breaches. Multicultural consumers over-index on mobile and social media use, which are often targets of cyberattacks.
• Multicultural consumers may have unique privacy concerns driven by cultural beliefs, which may differ from White consumers. For example, some cultures have taboos about sharing data with medical or government entities and resist it due to fears of how that data could be used against them.

Data Governance Best Practices

Businesses can show their commitment to data governance by taking the following steps:

• Be transparent about how data is collected and used, and make it easy for multicultural consumers to access, manage, and delete their data. Keep consumers in control.
• Use data responsibly, respecting the consumer and their right to privacy. Just because consumers are on the internet does not mean their data is up for grabs. This means avoiding fraudulent practices and using data to improve the customer experience, not to exploit it.
• Businesses should also educate multicultural consumers about their data privacy rights and how to exercise them, making that information easily accessible. That information should also be made available in various languages to reduce barriers to access.

By taking these steps, businesses can build trust with multicultural consumers and demonstrate their commitment to protecting privacy. Data governance is essential for companies that want to succeed in the increasingly diverse U.S. marketplace.

This blog post was originally published on MediaPost.

Programmatic media buyers know that multicultural audiences are a rapidly growing and vital market segment. However, advertisers also know that targeting these audiences can be challenging, especially for those lacking cultural competence. Cultural competence is essential for programmatic media buyers aiming to reach multicultural audiences effectively while avoiding costly mistakes. 

What is Cultural Competence?

Cultural competence is the ability to understand, appreciate, and interact with people from cultural backgrounds, values, and beliefs different from one’s own. While necessary for companies and brands aspiring to reach and engage multicultural audiences meaningfully,  cultural competence is essential for programmatic media buyers who rely on data-driven strategies to target their ads.  

The absence of cultural competence in the multicultural data era can have negative consequences for marketers, so it’s important to remember the following: 

• Data can be biased. The data that programmatic media buyers use to target ads is often collected from various sources, including social media, search engines, and online surveys. However, this data can be biased, reflecting the biases of the people who collected it and the systems they used to collect and analyze it. For example, a social media dataset might be biased toward younger users, or a search engine dataset might be biased toward people interested in specific topics.  

Advertisers unaware of these biases could end up targeting ads to the wrong people or using offensive language in ads, risking the company’s brand reputation and alienating the target audience. 

• Different cultures have different values and beliefs. What's considered acceptable in one culture might be offensive in another. For example, direct eye contact is considered rude in some cultures, while others assume that those who avoid eye contact are rude. It is important to be aware of the cultural differences between the target audience and advertisers to avoid causing unintentional harm that jeopardizes brand health.
• Multicultural consumers are more likely to trust culturally competent brands. A study by ThinkNow found that 63% of multicultural consumers are more likely to trust brands that create ads that reflect their culture. When ads are culturally competent, they signal to the target audience that the advertiser understands them and respects their culture. This builds trust and loyalty, which can lead to more sales conversions over time. 

Programmatic Media Tips 

Wondering how to employ cultural competence when using programmatic media to reach multicultural audiences? Here are a few valuable tips:

1. Be aware of your own cultural biases. We all have cultural biases, even if we're not always aware of them. So, the first step to becoming more culturally competent is awareness. To do this, consider taking a cultural bias assessment or talking with someone from a different cultural background. Then, embrace accountability.
2. Research the target audience. Once you have acknowledged your cultural biases, thoroughly research your target audience. Delve into their culture, understanding their values, customs and belief systems. This can be accomplished by immersing yourself in books and relevant articles, conversing with people from the target audience and participating in cultural events. 
3. Use zero-party data from a cultural research company. Zero-party data is voluntarily shared with companies and organizations by customers via surveys, online forms, applications, polls, etc. Cultural research companies can collect zero-party data from multicultural consumers that deliver insights about their culture. This data can inform programmatic media plans that result in culturally responsible advertising. 

By following these tips, advertisers can use programmatic media to reach and engage multicultural audiences respectfully and effectively.

This blog post was originally published on MediaPost.