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Direct Response Marketing

Multicultural Mix: Finding Recession-Proof Households

1 Feb, 2009 By: Marcelino Miyares Response

New year, new president … new woes? Not necessarily.


Believe it or not, some segments of the market are virtually recession proof — or, better put, economic agnostics. They are mostly unaffected, or minimally impacted, by macroeconomic trends, such as credit crunches and market downturns. I am not talking about the super-rich. I am describing mass multicultural consumer segments like the Hispanic market.

Marcelino Miyares
Marcelino Miyares

Think about it. Many DRTV players have yet to test the Hispanic market because of false perceptions about its access to credit cards. Inbound conversions — of 50 percent or more on some campaigns — clearly suggest otherwise. Many marketers have already realized that the market has grown beyond the critical mass of credit card and debit card penetration required to make Spanish-language campaigns work.

Many more marketers, however, still rationalize their way out of targeting this segment. For those of you who still believe the market is COD (cash-on-delivery) dominant, then the credit crunch has little to no effect on this segment.

This is not to ignore the trickle-down effect of an overall negative economy. The reality is that the cash-exclusive consumer is extremely vulnerable to his or her employer's liquidity. If this dries up, everyone is affected. But I would argue that the Hispanic market in the United States is liquid. It may be even more liquid than its general market, credit-maxed cohort.

Let's imagine DRTV consumers on an income bell curve. On the far left tail are those consumers who can no longer buy on impulse. On the far right tail are the consumers who likely don't buy from us anyway. Our sweet spot, from a disposable income perspective, is middle-class America.

Some would take it a step further and argue that lower-middle-income-America is the true DRTV market. This economy may be shifting our bell to the left. This "shifted bell" is where the Hispanic market has always lived and is driving demographic growth. More to the point, Hispanics drive disposable and liquid income growth in this slice of our general population.

Hispanics constitute the fastest growing segment of the U.S. population. At the risk of over-generalizing, Hispanics are rushing to the front door of financial "viability." More importantly, unlike their general market cohorts, they begin to feel more, not less, empowered as they reach lower-middle to middle-income brackets.

The Latin DRTV shopper is among the lowest hanging consumers out there. If Hispanics constitute 17 percent of the U.S. population, they then constitute an even larger percentage of the second and third income quintiles. This sets up a pair of interesting questions: How much business am I leaving on the table today by not selling to Hispanics? And what if the economy does not, in fact, improve for 18-24 months?

We could debate ad nauseum the psychology of DRTV shopping — it feels good, it serves as immediate gratification, it makes us feel like we are doing something about a problem, it allows us to gift ourselves, and the products are getting better all the time. If all this is true, consumers need DRTV more than ever to satisfy all of these needs.

If necessity is the mother of creative thinking, there are more than a few indicators that Hispanic DRTV buying is worth taking a look at. For starters, media rates mostly held up through fourth quarter. At best, holiday discounting on Spanish-language channels was a fraction of the general market discounting that DRTV budgets needed to stay profitable.

In a previous column (Response, September 2008), I demonstrated that the larger the Hispanic share of budget, the greater the positive contribution to overall media efficiency ratio (MER). For a number of marketers, this has led to an "MER rush" to enter the Hispanic market.

In the past month at my agency, the number of marketers running in-language shows has doubled and spending has increased threefold. These are meaningful gains on already substantial metrics and contributions to our clients' overall performance.

Where will you find more and more DRTV shoppers every week? Watching Spanish-language TV, while everyone else watches dismal economic news.

Marcelino Miyares heads Mercury MultiCultural. You can reach him via E-mail at mmiyares@mercurymedia.com.


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