$1 + $1 = $3 Hispanic Marketing ROI

A “dolar” is a “dollar” no matter what we call it.  Except, for some reason, when it comes to budgeting for Hispanic.  Even though Hispanics over-index on the usage of many categories, and even though they demonstrate higher LTVs on many services, the market does not command marketing shares of budget commensurate to its share of the population.  Never mind the demographics, it does not get its “fair” share marketing dollars for its demonstrable share of “addressable market” in any category.  Why is that?

Traditional media planning and buying focus on the delivery of a message, and measures impact by TRPs. As precise as this trade has become – at best it only allows us to measure the delivery or distribution of our messages.  At the risk of sounding a little combative, the trend toward Total Market Planning over the past decade pretty much ensures that general agencies are keeping their clients focused on the expense side of productivity, rather than true performance.  

Any Total Market approach almost by definition minimizes Hispanic audience projections by diluting their respective Costs-per-Thousands (CPMs) in order to bring in Costs-per-Points (CPPs) and other buying metrics.  This approach only factors in actual costs not opportunity costs.  The latter involves the recognition of the true drivers of revenue for any product or service that indexes high for Hispanic, regardless of language.  General media agencies would rather live above the line, not in the bottom line.  

Budgeting for performance, on the other hand, is by definition all about the measurement of a specific result. We tend to think of DRTV and performance media in terms of 800#s and CPAs. But speaking as a true practitioner of performance media; our discipline in metrics and sourcing apply to retail, branded DR, lead gen, and drive to web as well.

In the end – it is the end that matters. All marketing is about generating demand to buy or believe something. But it is all ultimately about sales. Marketing does not build brands alone. Conversion (i.e. sales) builds brands too. This is where the budget modeling potential of Hispanic DRTV comes in.

The payoff for clients is a “found market” of 15MM+ households, comprised of over $62MM television responders and high index consumers shoppers at all of the mass and general merchandise retailers. How are these two related? In our experience, for every unit converted on television, our clients sell eight or more units in store. It bears repeating that Hispanic DRTV allows marketers to forecast and optimize the ROI of a Spanish-language media budget – for virtually any brand, in any category.  These marketers just need to be honest about the “dolares” that are coming back to them in sales.

The account planning and budgeting challenge many companies contend with is that Hispanic DRTV, retail and drive-to-digital campaigns, when compared to their general market source campaigns, will in all likelihood be driven by the same metrics but in a different way. The typical Spanish-language campaign generates more calls and clicks but results in fewer conversions.  But wait.  Although Hispanic campaigns appear not to perform to well in the middle of the funnel; Costs-per-Calls (CPCs) and Lifetime Value (LTV) metrics more than make up for it in the bottom line.

We know that 1+1=2.  Except that budgeting for Hispanic does not need to be a zero-sum process. Comparing general market and Hispanic metrics is like comparing apples to “manzanas.” Our path to profit may be different, but ROI is ROI. Patient and thorough marketers know this and almost always find that most measured response campaigns can ultimately be managed to exceed ROI goals. In fact, successful DRTV marketers know that adding Hispanic to a media mix means that 1+1=3.

It seems that some clients would rather be “right” than strategic. They would rather focus on the total market, as opposed to the resolving the challenges that the Hispanic campaign may pose at the outset of a test. Successful performance marketers know that we rarely get it right the first time.  They recognize the need to budget for success, not first time trial.

General market tests can last months and involve the fine-tuning of pricing, offer structures, creative, telemarketing scripting and other important elements of a successful campaign. Why would it be any different in the Hispanic market?

We need to be better at getting our clients to focus on their goals and business objectives, as opposed to the means to those ends. The path to profit in the Hispanic marketplace is often different from that of the general market. But math and metrics, like any science, are the great equalizers of all language and culture. ROI is all about metrics.

At d2hispanic we call our approach “Parallel Planning.” Meaning that we manage to general market metrics and objectives but adjust tactically where necessary. We think of budgeting effectively in terms of two rails on one track. Success in Hispanic DRTV is not a question of “if,” but “how” we execute and deliver with a measurable ROI? And what tools do we need to get there?

We should no longer wait for demographics to make our case. We are now on the eve of our fifth U.S. Census, waiting with bated breath for that “aha” moment when every marketer in America will convert to our cause. What will be different this time? Look to Hispanic DRTV as a means to prove to clients that ROI is ROI and “manzanas” are apples.  More to the point “dólares” are dollars too.

For more about the Budgeting for Hispanic check out the infographic in our BUZZ section and vlog – Speaking2Hispanics.

Marcelino Miyares, Jr.- Managing Partner – D2H Partners, LLC – 2019