Hispanic Boom's Here to Stay

3/16/2003 7:00 PM Eastern

In January, the U.S. Census Bureau released information that was welcome news to programmers, marketers, advertising agencies, demographers and researchers trying to reach and measure the Hispanic community.

As of July 1, 2001, there were an estimated 37 million Hispanics in the country, more than any other ethnic group. The Census indicated that with 4.5 percent growth from data it released in April 2001, Hispanics had surpassed blacks, whose ranks grew 1.5 percent over the same period to an estimated 36.2 million, or 12.7 percent of the nation's population.

Although the surge may have surprised some, those in advertising and research knew this day was coming.

"Those in the business were aware of the long-term trends, but I don't think a lot of people saw it as real. CEOs at big companies now have to be saying to their officers 'This group is 13 percent of the population. What are we doing to tap this segment?' " said Jose Abyar, vice president, managing director of media services of New York-based Wing Latino Group.

"The Census of 2000 was probably the biggest piece of data to jump-start marketing to the Hispanic segment," added Tom Morrison, vice president of Simmons Market Research. "Now with these recent statistics, it's impossible to ignore. These numbers will have a major impact on corporate America."

Joe Schramm, president of Schramm Sports & Entertainment, a New York marketing company that specializes in reaching the multicultural community, can already attest to that. "There was a clamor with the 2000 Census data and this new information. I think this will serve as a wake-up call for those who haven't analyzed opportunities with the Hispanic community," said Schramm. He noted that there had been "an upsurge in inquiries over the past six months. Almost all of our new business is Hispanic."

But Howard Horowitz, principal of Larchmont, N.Y.-based research firm Howard Horowitz Associates, offered a more measured response to the Census update: "I'm not sure it's particularly important. The fact is that Hispanics passing blacks remains within the margin of statistical error."

Horowitz, instead, pointed to the trend toward multiculturism.

According to the Surveys Unlimited division of Horowitz Associates, urban markets are expanding and minorities represent a significant portion of the population therein. In New York, Los Angeles, Chicago and all cities with populations of 50,000 or more, 49 million, or 45 percent identify themselves as black, Hispanic or Asian.

This trend is already being felt by America's youth, relative to music and entertainment. "Among the younger members of the general market, Hispanics and blacks are a fabric of society today, especially in urban areas," said Morrison. "They are becoming much more mainstream."

Schramm said that process has just begun. "In 2010, there will be more 13-year-olds than at any time since 1970, the height of the baby boom," he noted. "The Latino population and its influence on culture will be huge."

Gap widening

Overall, the gap between Hispanics and blacks is expected to widen throughout this decade. Some observers believe unstable economic conditions in Latin America will continue to lead to immigration, while Latino birth rates exceed those of blacks.

To that end, a number of cities have experienced a huge surge in the number of Hispanics over the past generation. Data from the Pew Hispanic Center and The Brookings Institution show that cities like Raleigh, Greensboro and Charlotte, N.C., and Atlanta were home to a exponential growth between 1980 and 2000 (see chart).

Those gains come on top of those made in such fast-growing Latino hubs as Austin, Texas and Stockton, Calif., and complement the top-10 Hispanic markets: New York, Los Angeles, Miami, Houston, Chicago, Dallas, San Francisco, San Antonio, Phoenix and San Diego.

All told, Census projections call for the Hispanic population to grow to 39.3 million in July 2006, en route to 43.7 million in July 2010.

Eye on assimilation

Population increases are not the only trend to keep an eye on. Assimilation by Hispanics is leading to more college enrollment and better and higher paying jobs, not to mention increased home ownership. "Fannie Mae is receiving more mortgage loan applications from Latino head of households" than other groups, said Schramm.

And despite wielding increased financial clout —Hispanic Business
magazine estimates annual spending power at $540 billion — Abyar said that only 2 percent to 3 percent of ad spending is currently being allocated against Hispanic households.

Although he said it's unrealistic to expect budgets to match the group's population base of 13 percent, be does foresee an uptick in the offing. "Companies do reach third- and fourth-generation Hispanics through English media," Abyar said. "A more reasonable expectation over time is somewhere between 6 percent and 8 percent of budgets."

Morrison concurs, noting that Hispanics' bilingual nature and cultural pride will keep marketers deploying schedules that reach both new arrivals and established households.

"I believe that language and cultural sensitivities will remain part of this market," he said. "I'm not certain that's going to change over the next 10 to 15 years."

Which is why the growing Hispanic population will continue to present challenges and opportunities for those trying to reach them.

Latino Hotspots
The following is a list of metro areas that have been home to significant population gains by Hispanics from 1980 through 2000. The geographic diversity represented here underlines the notion that Hispanic enclaves are cropping up throughout the U.S.
Market Population % of Population % Growth 1980-2000
Source: Pew Hispanic Center/The Brookings Institution
Raleigh, N.C.72,58061180
Greensboro, N.C.62,2105962
Charlotte, N.C.77,0925932
Orlando, Fla.271,62717859
Las Vegas322,03821753
Nashville, Tenn.40,1393630
Ft. Lauderdale, Fla.271,65217578
Sarasota, Fla.38,6827538
Portland, Ore.142,4447437
Greenville, S.C.26,1673397
West Palm Beach, Fla.140,67512397
Minneapolis-St. Paul99,1213331
Fort Worth, Texas309,85118328
Providence, R.I.93,8688325
Tulsa, Okla.38,5705303

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