Ethnicity Highly Influential to 1st Gen Hispanics’ Brand Decisions

March 30, 2012

yahoo-ethnicity-brand-decisions-hispanics-march2012.jpgEthnicity plays a vital role in influencing the brand decisions of 1st generation Hispanic Americans, although it has a much lesser role among later-generation Hispanics, finds Yahoo! Insights [pdf] in a March 2012 report. 70% of 1st generation Hispanics say they notice products and brands that make the effort to reach their ethnicity through advertising, while more than 3 in 5 are more likely to try such a product or brand, and be more trusting of it. This compares to 40% of later-generation Hispanics who notice products and brands blending ethnicity into their advertising, and less than one-third who are more likely to try that product or brand, and be more trusting of it. The report notes per US Census Bureau data, 41% of Hispanics are 1st generation, 29% are 2nd generation, and 31% are 3rd generation or later.

Interestingly, although later-generation Hispanics find ethnic marketing to be less important, they are also much less likely than their 1st generation counterparts to feel that ads do a good job of speaking to their ethnicity (26% vs. 69%). At the same time, 1st generation Hispanics are twice as likely as later-generation Hispanics to feel that many ads targeted to Hispanics are offensive (42% vs. 21%).

Ethnicity Important to Marketing Perception

Given 1st generation Hispanics’ attitudes towards brands and products that incorporate ethnicity into their advertising, it’s not surprising that many say that ethnicity is important when products are being marketed to them. In fact, a majority indicate that ethnicity plays either a very or extremely important role in marketing across a variety of categories, including travel and food (58%), apparel and home goods (64%), CPG and grocery (68%), health and medicine (66%), entertainment (65%), and automotive (63%). On all counts, later-generation Hispanics find ethnicity less important, with the proportions ranging from 25-38% across these categories.

Recent research from the Association of Hispanic Advertising Agencies (AHAA) confirms the importance of reaching Hispanic consumers: results from the AHAA study [pdf] indicate that among CPG brands, the share of overall marketing resources dedicated to the Hispanic segment explains about one-third of their overall revenue growth between 2006 and 2010.

Generations Agree on Role of Diversity, Though

Meanwhile, data from Yahoo! Insights’ “Ethnodynamics” report shows that the gap between generations narrows drastically when it comes to attitudes towards diversity in advertising. More than 3 in 5 Hispanics from both groups (1st generation and later generations) say that diversity in advertising is the best way to reflect the real world, that ads would be much better if they showed larger diversity, and that they prefer ads that show diversity rather than a single ethnicity. At the same time, roughly half feel that most ads are targeted towards Caucasians.

Other Findings:

  • Almost two-thirds of 1st generation, and 3 in 5 later-generation Hispanics, say that avoiding obvious ethnic stereotypes is important or very important when it comes to advertising. 1st generation Hispanics are much more likely than their later-generation counterparts to see importance in ads that make their ethnicity look good (71% vs. 51%) and make them feel proud of who they are (76% vs. 52%).
  • 4 in 5 1st generation Hispanics will talk about an ad that speaks positively about their ethnicity.
  • Later-generation Hispanics do not frequently visit Spanish content online (~20%), although a majority of 1st generation Hispanics do.
  • 1st generation Hispanics are much more influenced by ethnicity when it comes to their choices of news, culture, variety, shopping, and food website content.

About the Data: The Yahoo data is based on a survey of 603 Hispanics and Latinos, with data weighted to represent the 2010 Census. The AHAA study was commissioned by the AHAA Research Committee and executed by the Santiago Solutions Group, a growth strategy consultancy with methodological review by Dr. Cristina Garcia, professor of statistics at USC. AHAA analyzed all 35,000 U.S. advertisers and their allocation trends to Hispanic media for five years between 2006 and 2010. Each parent company was matched to the available published financial revenue data, and calculated 2006?2010 compounded annual growth rates. Various regression analyses were applied to identify any correlation between the percentage of advertising allocation dedicated to Hispanic and the company’s compounded annual revenue growth rates. Companies which did not have consistent published financials such as venture capital firms, companies which had restated their earnings, non?profit organizations and companies which grew on acquisition sprees rather than consumer driven growth were eliminated from the final regression set.

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