Author: Nataly Kelly

It’s been a good summer so far for Univision. The Spanish-language network hit the number-one spot in the sought-after demographic of television viewers aged 18 to 49 in July. It beat out channels like Fox, NBC, and CBS. It’s the third summer in a row the network has bested its English-language counterparts.

Univision’s success comes as little surprise. The Hispanic market continues to grow in importance to the future of American businesses — especially in the domains of advertising and marketing. A compilation of the latest findings we prepared at Smartling shows that the Hispanic population currently accounts for 16.7% of the U.S. population, or 52 million people, and will have $1.5 trillion in purchasing power by 2015.

Plus, the Hispanic market is young. The “youth demographic” is desirable across platforms and brands and generally represents the next generation of customers. By 2050, Hispanics will account for at least 30 percent of the total U.S. population — even if there are sharp declines in immigration.

Advertisers continue to take note. Many companies are changing their strategies to remain competitive and better reflect the ethnic and linguistic realities of this evolving consumer base. Target recently launched a popular bilingual television ad, featuring a version of the song, “If You’re Happy and You Know It” in both English and Spanish. Kraft Foods now has an entire Spanish-language site designed specifically for the tastes of Latinos, featuring a noted Latino chef, a range of recipes with familiar ingredients from home, and party planning tips for quinceañeras (birthday celebrations for 15-year-old girls).

Marketers don’t necessarily need Spanish to reach all Hispanics — many, especially children of immigrants in the U.S. — are English-dominant. However, most brands prefer to build brand loyalty with Hispanics early — in their home countries and among first-generation immigrants. With that in mind, providing content in Spanish has become a best practice.

The Hispanic advertising industry is now worth more than $5 billion, and is outpacing all other sectors of advertising, with four times the amount of growth. As of June 2012, ad spend growth rates had increased by 20.7% for the Hispanic market compared to just 1.7% in the non-Hispanic market. Companies like Procter & Gamble, McDonald’s, AT&T, Verizon, Toyota, General Mills, and General Motors spend tens to hundreds of millions of dollars each year in Hispanic advertising. Savvy advertisers are able to build two-for-one brand loyalty, reaching both customers living in Latin America and Latinos who reside in the United States.

The landscape is changing fast on this issue and there are a few new trends worth watching:

The upscale Hispanic market is booming. Makers of luxury products are beginning to turn their attention to the Hispanic market. Nearly one quarter of all U.S. Hispanic consumers are now defined as “upscale consumers,” with an annual income of $75,000 or more. By 2015, their buying power is estimated to be worth $680 billion.

The Hispanic market also matters for marketing to business buyers. B2B advertisers are beginning to turn their attention to the rising number of businesses owned by Hispanics in the U.S. In 2007, Hispanic-owned businesses generated $350.7 billion in sales, a trend that stands to grow with time.

Hispanics are more mobile-savvy than other segments of U.S. consumers. Hispanics are 28% more likely to own a smartphone than non-Hispanic whites. One study showed that 47% of Hispanics used a handheld device to go online, compared to just 28% of non-Hispanic whites.

Every business needs to understand its customers well. As these trends show, it may no longer be a viable option to put off a strategy for marketing to Hispanics until mañana.

A few months ago, Microsoft announced the release of Windows 8 in a language that many tech analysts found to be a surprising choice — Cherokee. Just a decade ago, this Native American language had no speakers under the age of 40 with conversational fluency. Today, it has a speaker base of around 16,000 people.

In a similar vein, Google announced last year that it was supporting the Endangered Languages Project, an initiative to allow people to share resources and information about languages on the verge of extinction. Of around 6,500 languages spoken today, approximately 3,000 are considered to be endangered. Google has a history of launching products in languages that fall outside of the mainstream. Its flagship search product has been available in Irish Gaelic for many years, even though the language has only about 133,000 native speakers, all of whom also speak English.

Why do organizations like Microsoft and Google care about languages with so few speakers? Without a doubt, providing members of linguistic minority groups with access to technology in their native tongues is very important. It empowers these communities, enabling their languages to survive and thrive in the digital age. However, before we jump to the conclusion that Microsoft and Google’s efforts are solely altruistic, let’s consider some important facts.

Back in 2003, Mark Davies carried out an important analysis of gross domestic product (GDP) by language use. He found that speakers of English and Chinese had the most purchasing power, followed by other languages used within major world economies, such as Japanese, Spanish, and Russian. However, the amount of spending power represented by the remaining thousands of languages was significant — accounting for 12.5% of the world’s GDP. In other words, according to his analysis, $12.5 out of every $100 corresponds to someone who does not speak a major world language.

More recent data from Internet World Stats displays a similar trend. Of nearly 2 billion internet users estimated in 2010, 82% spoke one of 10 macro-languages — English, Chinese, Spanish, Japanese, Portuguese, German, Arabic, French, Russian, and Korean. And the remaining 18%? They speak one of the world’s remaining 6,500 micro-languages.

Less common languages might not seem that important individually, but when you take them collectively, they pack a powerful economic punch. What’s more, their force only stands to grow stronger as time goes on. Meanwhile, the relative importance of English in the world is set to decline. According to research from Brookings Institution scholar Homi Kharas, the global middle class will double in size, from 2 billion people today to 4.9 billion in 2030. The European and American middle classes currently account for 50 percent of the global total, but by 2030, will account for 22 percent. Asia, where more than 2,000 languages are spoken, will account for 64% of the global middle class.

Much of that growth will come from people living in China and India. China has 292 living languages, many of which have millions of native speakers. You might never have heard of Uyghur, for example, but it has 10 million speakers, or about three times the number of residents of Chicago. In India, where 415 different languages are spoken, there are 30 languages that each has more than a million native speakers, such as Kannada, with 38 million speakers (or 12 Chicago’s).

It might seem baffling for us to consider that English may no longer dominate in commercial and online worlds. Yet, a prominent British linguist, Nicholas Ostler, highlights the same trend. In his book, “The Last Lingua Franca: English Until the Return of Babel,” Ostler examines the conditions that led other languages, like Latin, to fall out of widespread use, arguing that English and its global dominance are currently in decline.

This phenomenon also echoes the findings of the business writer and entrepreneur Chris Anderson, who wrote about the growing importance of niche markets in his book, “The Long Tail: Why the Future of Business is Selling Less of More.” Eric Schmidt commented that Anderson’s insights “influence Google’s strategic thinking in a profound way.” That influence apparently extends into Google’s view on the long tail of languages and targeting niche linguistic markets, especially as more people around the world come online.

Companies like Microsoft and Google care about less common languages, but not out of charity alone. If you want to maintain your status as a market leader and secure it for the future, one of the savviest options is to develop the market itself. This involves not just taking your product or service into a new market with known demand, but creating conditions that will enable demand to emerge in the first place. One of those conditions? The ability to offer your products and services to people directly, and in a language they call their own.