Horacio Gavilan of HMC: The 2020 Census is a wake-up call for brands

Much is said about diversity and the element of change in the multicultural population. And with its concrete results now in, the 2020 U.S. Census has confirmed the immense growth of the Hispanic population. As Horacio Gavilan, executive director of the Hispanic Marketing Council (HMC), put it: “Just over half of the total growth in the U.S. Census was a result of the increase in the U.S. Hispanic population, which reached 62.1 million, or 18.7 percent of the total in 2020, compared to 16.4 percent in 2010 and 12.6 percent in 2000.” Regarding this matter, Gavilan went on to say there are already many brands that target Millennials or Gen-Zers, but that “too many” fail in their attempt to lump these diverse consumers into a single homogenous group: “They erroneously think their general market efforts will reach them. By doing this, brands ignore the importance of culture and the strong sense of identity among these generations and especially vast age segments that identify as ‘people of color’ (POC).” With vastly outdated marketing models and meager investment in Hispanic marketing, brands risk applying ineffective marketing plans with low or no ROI from their campaigns. “By understanding cultural nuances and values,” he said, “brands have a significant opportunity to engage in authentic conversations and differentiation.”With the new racial and demographic map, brands should look beyond the numbers. “While the data shows growth,” Gavilan said, “it doesn’t reflect cultural identity and the critical role it plays in purchase decisions and everyday life. Race and ethnicity are more essential to multicultural identity than ‘being American’ is for non-Hispanic whites.” Based on extensive research by the Hispanic Marketing Council, Gavilan offered these tips: Avoid mono-cultural marketing bubbles, as they are culturally dangerous feedback loops. Culture matters. In-culture content remains strong, and Spanish as a cultural thread continues to transcend reliance. Marketing efforts within “in-culture” environments pay off with heightened engagement, brand trust and a likelihood to buy by a measure of 60+ percent for both Hispanics and Blacks ages 13 to 49. Know your audience. For example, fashion and lifestyle influencers drive purchase — Hispanic, non-Hispanic Black and non-Hispanic white teens all follow mostly multicultural influencers. Brands cannot take calculated cultural risks if they are unsure of their own brand’s cultural values and those of their customers. Hire in-culture marketing experts to drive the strategies — not as an add-on or a piggyback effort to “general market” campaigns. Spend the right amount for the opportunity. $1.9 trillion in Hispanic buying power is worth a lot more than the 2-5 percent that brands currently spend. Brands must invest intentionally and responsibly in the Hispanic market. DEI efforts do not replace multicultural marketing — both are needed and both require significant investment. The 2020 Census is just one more wake-up call for brands, Gavilan concluded. “While cultural relevance is critical, it also comes down to having responsible and intentional budget allocation.” Brands today allocate a mere 2 to 5 percent of their budgets to multicultural marketing, whereas the Hispanic segment alone represents nearly 20 percent of the population. “There is a vast and unacceptable gap between 5 and 20 percent, despite countless ROI studies showing that allocations of between 15 to 20 percent are needed to drive real bottom-line growth” in the Hispanic segment. The vast majority of people, to the tune of 53 to 72 percent, have abandoned a culturally illiterate brand. “With consumers demanding more from brands and leaders, brands have a social and business imperative to make responsible and intentional investments in all multicultural audience segments in their marketing AND increase their investment to levels that are in line with the percentage of the business that these audiences represent, the HMC executive added. “However, this investment cannot be a shell game where brands move money around their multicultural marketing budgets instead of allocating higher percentages to engage every multicultural consumer actively and intentionally. Too many brands are ‘robbing Peter to pay Paul’ by shifting budgets from Hispanic to Black to Asian efforts without ever expanding the size of the investment. The 2020 Census will hopefully spur brands to action.”