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The Virtual Immigrant: The Economics of Digital Goods

There is no doubt that social networks have made the diasporas closer to home. I remember when I first came to this country as student 12 years ago. At that time, I had to buy phone cards every week to call my family. Now, I connect with them for free almost on a daily bases through social networks or Skype. Furthermore, I keep in touch with friends across the world.

New media has empowered immigrants to go beyond a simple phone conversation. Now, they are in social networks and are sending pictures and videos via smart phones. Their families and friends at home are also consuming digital goods from the US.

This new dynamic has created a virtual immigrant: an immigrant who is not physically in their home country, but continues to consume culture, ideas and digital goods from home. I wonder what is the impact of this immigration? Are people more connected to their home countries? Are these virtual immigrants also consuming digital goods and ideas from abroad, by watching videos online, reading US newspapers, blogs, or downloading US music?

In 2008, eMarketers estimated a total of 23 million Hispanics online, which represents about 52% of the total US Hispanic population. We can break this number into three groups based on their levels of engagement online: Heavy, Medium and Light. According to a ComScore 2008 survey on Hispanic consumers online, the Heavy online users are predominately male, young, foreign born and prefer to speak Spanish in the house. The Medium users are generally young and more likely to be born in the US. They typically speak both English and Spanish at home. Finally, the Light users tend to be the oldest of the three groups. They are more acculturated and often prefer speaking English in the home.

The segmentation helps us understand the economics of digital goods for immigrant populations. While general market media through traditional channels is generally sufficient for reaching and engaging the Light users, there are unique opportunities for Heavy and Medium online segments.

If the Heavy online segment (HOS) represented countries rather than people, these countries would be considered net importers from their country of origin. They consume more digital goods or content relevant to their home countries than US content, e.g., Mexican telenovelas and newspapers,. To market to this group, we need to connect culturally to their home countries.

The Mediums online segments (MOS) are a hybrid. They are likely to be net exporters on balance though still importing many forms of media. I think media channels such as mun2, which targets 2nd generation Hispanics, hits the sweet spot. The channel features domestic US content but with Hispanic influence, such that it can be also exported abroad.

The MOS group is still proud of its Hispanic identity, but considers itself American. What makes this group even more relevant is that it is already big and expanding: 47% of Hispanic adults are US-born. They are also influencing other consumers abroad through sharing videos, photos, and games. Thus, they are connectors who share digital goods and content with their friends and family abroad. Marketing to this group can be very valuable, as engaging the MOS base can create a halo effect abroad.

In summary, virtual immigrants have changed the market for digital goods. Brands are becoming truly global as content is rapidly changing across countries. Net Importers such as the HOS are consuming more content from abroad. Net exporters are consuming tailored content and exporting to other countries.


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