Hispanics and high-technology: a new chapter

Hispanics and high-technology: a new chapter
Joseph Kim

The particular relationship between Hispanics and digital media in the United States is not a new revelation. Companies like Universal Pictures already understand the importance of serving this section of the American consumer base through the success of its Latino YouTube channel, which hosts videos that garner millions of views (and counting), and the popularity achieved after its intercultural marketing for the Despicable Me 2 film release. However, an already massive area of marketing is developing further, with both the Googleplex and the U.S. startup sector turning the spotlight on the Hispanic market even brighter in mid-2014.

Now Google is even interested
Anyone subscribed to Google’s “Think with Google” newsletter will be aware of the headline above last month’s edition: “Your Next Big Opportunity: The U.S. Hispanic Market.” While it might seem like Google has tuned in late—unthinkable for a Google brand that promotes itself as the cutting edge hub of the corporation’s “research and insight”—the reason for the recent attention is two-fold: the affinity that American Hispanics have with technology and Google’s observation that American Hispanics remain underserved as digital consumers. The situation this year is despite the 2010 Nielsen results that valued the overall buying power of the U.S. Hispanic population at US$1 trillion.

Google’s Vice President of Americas Marketing drew heavily from Nielsen’s research results for the Think piece and the data is indeed striking. In February of this year, Nielsen published the “Digital Consumer” report, declaring in the introduction: “Hispanic Consumers Are Digital Trailblazers.” The global consumer research company devotes an entire section of the report to the results gathered from Hispanic participants and includes comparisons with the broader U.S. population. For a segment of America that Nielsen expects to contribute 60% of population growth over the next three years, the research shows that 12% of mobile shoppers are Hispanic, 1 in 5 users of social media mobile apps are Hispanic, and Hispanics exceed all other American demographics in areas such as smartphone adoption rates, data usage, time spent viewing online videos and tablet upgrade rates.

Google was compelled to conduct its own research. Google’s Think team gathered a panel of senior marketers and surveyed them about the extent of their Hispanic focus and also spoke with the brands that have already adopted such a focus. While the majority of panel members acknowledged the significance of the Hispanic market, most of the marketers also stated that they had not devised a corresponding marketing strategy and were advising their own clients to either marginally invest in Hispanic marketing, or to not bother at all. As for the brands, the key takeaway points were: target online video and mobile; offer both English and Spanish as language options; and develop intercultural awareness before proceeding (Universal Pictures’ representative asserted: “Culture is the new language”).

Southern neighbors
The subject then moved in a southeasterly direction at the start of this month with TechCrunch’s feature on the increasingly healthy Texan startup scene that is growing in partnership with Mexico. Again, the high-technology developments in both Texas and Mexico are not new: the Texas Emerging Technology Fund (TETF), which has allocated more than US$205 million to early stage companies since inception, was founded in 2005; and the World Bank ranked Mexico as the top Latin American nation for high-technology exports for the period 2009-2013. However, in the words of El Paso hi-tech CEO Alan Russell: “For the first time in modern history the lines have crossed where China is no longer the obvious option—you have to look at Mexico.”

Russell’s company Tecma Group operates 20 manufacturing facilities in Mexico for production in a range of fields, including aerospace, medicine and electronics. Alongside Russell is Austin-based entrepreneur Anurag Kumar, who is the CEO of an IT solutions company—the majority of his employees are located in Guadalajara. Kumar, who believes that there are around half a million IT professionals in Mexico, provided TechCrunch with a list of benefits gained from Mexico’s IT sector that included geographic proximity, strong infrastructure, governmental support and bilingual expertise in the Latin American market.

Tipping point
Although some analysts might have predicted a shift toward Hispanic consumers prior to 2014, the passing of time has proven otherwise; however, in the search for a name that can generate attention and momentum, Google could possibly be the best option at this stage of the 21st century. The hi-tech giant found that queries for common Spanish-language “question words” on its ubiquitous search engine nearly doubled between 2011 and mid-2014, which corresponds with an ethnic group that is expected to make up 30% of the U.S. population in 2050. With nearly half a million Hispanic-owned businesses, with receipts worth US$61.99 billion in 2007, Texas may be responsible for leading the way—in partnership with Mexico.

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